In the May 5, 2013, New York Times columnist Ross Douthat “What Health Insurance Doesn’t Do”, discusses a recent Oregon Medicaid experiment which shows that the Medicaid program improves health outcomes only slightly even though it does help people avoid huge medical bills. As Mr. Douthat goes on to explain, the Oregon result offers a valuable suggestion for how to make American health care overall much more efficient and less costly.
The problem is that our health insurance system does not function like any other type of insurance. All other types of insurance such as for house or car protect only against actual disasters like a house burning down and not routine maintenance repairs which affect all of us on a regular basis. In other words, health insurance could and should be restricted to very expensive treatments such as for cancer, for example. Routine health problems, which affect everyone over a lifetime, even including end of life care, can and should be paid for with mechanisms such as health savings accounts, which can be rolled over from one year to the next.
A more elaborate discussion of the inefficiency of American health insurance, and how to fix it, is provided by David Goldhill in the NYT on February 17, 2013 “The Health Benefits that Cut Your Pay”, and also in his new book on health care referenced therein.
Clearly the cost of health care is a huge fiscal and economic issue for our country. Health care entitlements, such as Medicare and Medicaid, are the main drivers of the national debt. The rapidly growing cost of Medicaid is also a huge problem at the state level because it is crowding out support for other essential major programs such as education and infrastructure improvements. The cost of private health care paid by employers holds back wage gains and is a major factor in the growing income inequality in American society.
It is time for Americans to demand action on health care costs from our national political leaders. It is a problem which affects almost all of us and therefore should be amenable to a bipartisan solution in Congress. We need to get this message out much more strongly!
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