The Cost of Insurance

The great majority of us have NO idea how much medical procedures actually cost. We're insulated from the cost by the insurance policy. I honestly couldn't tell you how much an X-ray costs; I have no Earthly concept. I can give you a rough estimate of what a bottle of Pepsi costs, though I don't buy bottled soda, because that price is posted in every store I visit. But an X-ray? No idea.

Insurance as an idea was intended, as auto insurance, to cover you in case of emergency. It was not conceived to one day cover birth control, cold medicine, routine eye exams, and so on (just picking a few things randomly here). But because the range of medical services covered by everyday policies has expanded exponentially in recent years, the associated cost of those policies has increased correspondingly.

The greater the likelihood of a claim, the higher the premium for the policy, plain and simple. It's true in auto insurance, flood insurance, and even life insurance -- non-smokers pay less money than smokers, because it's been determined that smokers are more likely to die faster, leading to faster (earlier) payment, and less money for the insurance company.

Anyway, in truth insurance policies don't have much effect on treatment costs; the doctors and hospitals administering the treatment will eventually be paid, by the government if not by the insurance carrier or the patient. Most industries use competition between different companies to keep costs low. You can't charge twice as much as your competitor, or you will shortly be out of business. Government interference has, for years, destroyed this line between 'competing' hospitals and, much like college, has caused a steep increase in price because of that interference.

When you know that the bill will be paid, by the government (if no one else), you can charge a LOT more money -- and so can your competitors.