Public or single payer health insurance is cheaper and more efficient than private options. That isn't something you'll ever hear its opponents admit, but it's the truth. Our current health insurance system is a bloated monstrosity. Not only would almost any systemic reform be superior, but the most economically sound of our choices involve the private industry the least. It's not as if America is covering new ground here - we don't have to guess what universal health care would look like. We can look at literally any other country in the first world and examine the systems they use, since we'd be the last developed country to implement universal healthcare.
As it turns out the American insurance system is a disaster compared to almost any other country's. Not only do we fail to insure about 43 million Americans, but we spend TWICE as much to do so. If we examine Organisation for Economic Co-Operation & Development (the OECD is essentially a international club for first world countries) data we can see that per-capita we manage to spend around $6,300 compared to an average of around $3000. Not only that, but about half of our spending is public, government cost. If you'll just let it sink in for a moment, realize that means the government is ALREADY SPENDING as much as "ultra-socialized" countries like France or Germany, in addition to private insurance and out of pocket expenses. Yet, spending about half as much as we do they manage to extend coverage to all their citizens.
You might have heard that the costs of health-care are rising and it's true, even worldwide. However, one single nation manages to stand out with the fastest increasing costs and you're living in it. Our health spending is increasing 51% faster than our GDP's growth. Somehow everyone but the most progressive Democrats in Congress stand up and spew drivel about how expensive and inefficient a government run system would be, when Medicare runs at 3-4% overhead (administrative costs and profit) versus private insurance's average of 25-30%.
What's going on is that there are several factors that incentive and drive care and insurance prices higher, while simultaneously encouraging the status quo. Co-pay, deductibles and generally high prices encourage poorer patients to avoid care for as long as possible. So instead of preventative care and early diagnosis we can get a full blown emergency procedure later, like a nice $30,000 heart bypass operation that could have been prevented by cholesterol medication and dieting.
Our current system also interferes with the ability of workers to change jobs, crucial to the operation of a free market. Since your health insurance is tied to your employment, this also may mean that you can't afford to quit and search the job market, locking you in your current position. Competition is also stifled, since most people are stuck using whatever insurance their employer provides.
Meanwhile, healthy free-market profit motive means that it's in the insurance company's best interest to not pay out if they can help it and charge high prices for everyone else. Since serious medical procedures are disastrously expensive, very few people are willingly able to forgo insurance, and are therefore obliged to pay the company's price. Very sick people are also very expensive and thus unprofitable people, so they aren't allowed to join the insurance risk pool (usually due to pre-existing conditions) or are forcibly revoked from their policy (via. rescission). Unfortunately for us, the ideal health insurance corporation is one that only insures healthy people. This is nice for the bottom line, but not actually useful for treating illness.
Other countries manage to avoid all this and provide healthcare efficiently to all their citizens using a few basic methods no matter what particular system they're using. First, the introduction of a public option forces private companies to compete with a system not motivated by profit, which means they have to drive down their overhead costs or go bankrupt. The government's public system can also achieve cheaper prices through collective bargaining. Their UHC system insures so many people that medical providers can't afford not to sell to them, which means the government can name their price. This is exactly how Wal-Mart offers low prices in America. In addition, a large universal program by definition covers everyone which means risk is spread amongst the broadest possible amount of people. Since a universal system can't dump sick people from the program it also has a very good incentive to provide preventative care.
I can't see our current system as anything other than a failure of the private option. Perhaps it's time we join the rest of the civilized world in realizing that for-profit insurance has long outlived its usefulness.
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