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How Health Insurance failed

Updated on August 2, 2010

Introduction

This article is PART TWO of my discussion on the state of Health Care in America and finding out who is to blame. You can find Part One Here.

     In part one we talked about how hospitals, drug companies, and doctors are at the heart of the outrageous health care situation in America. In this part, we will talk about how much guilt really falls on the insurance companies and why.

Insurance takes all the blame

     The new, so-called health care "reform" bill tightens the belt on insurance companies. Since this is the only entity most of us deal with when it comes to paying for our health care, that seems to be the only one we notice. We don't see the hospital over charging the insurance company, or the drug company insisting the insurance company pay ungodly rates for you to have your drugs. We don't see all of that so it is very easy for us to blame all our health care problems on the insurance entity itself.

     Last time I showed you how health insurance providers are not the only greedy empire involved. I mentioned several times that they are the last link in the chain before reaching the consumer. In looking back over that article, I realized I was making sound as if the insurance companies were completely innocent. They aren't of course, and that is something I plan to clear up right now.

The Real Fault of Insurance

Insurance companies screwed the public in two ways; one obvious, the other less so. Let's discuss the obvious point first.

     I don't need to talk about this one too much. We have all heard of it. Insurance companies had become notorious for dropping coverage just when you need it the most, raising your rates again and again just because you had to use their service. All of these things were motivated out of greed. It has gotten to the point where they are basically telling customers that they want you to pay them, but they don't want to provide you with anything in return. They act more like the mafia collecting protection money. They want that money for nothing.

     The other blame they take is a little less obvious, yet fairly basic. The insurance companies screwed us over by being lousy consumers. Perhaps I should explain.

     Businesses can only charge what customers are willing to pay. If you over charge, people quit buying. The same goes for health care. The hospitals, drug companies and doctors have something to sell and the insurance company is the customer. Where it all breaks down is the insurance companies agreed to pay 40 bucks for an aspirin, 450 bucks for a short ambulance ride, etc.... Every time hospitals charged more, insurance companies wrote the check. On an on it went till we arrived where we are today. Granted, it is far more complex than that, but you get the idea.

Where we Go From Here

     So here we are. The government is going to oversee the insurance companies now and provide their own insurance to many. Do you think this is going to change our situation? With a little luck maybe we will actually get the coverage we are paying for and not be dropped at the first sign of trouble. Sure, that's a good thing, but what about the constantly rising premiums? You think that is going to change? Of course not. The government is going to do the same thing the insurance companies did. They are going to continue to write the check. As the rates go up, they will raise insurance premiums and we get stuck.

Health care reform is a good idea... and desperately needed. However, like one of my readers said in part one, the whole thing has gotten so watered down, it just doesn't do any good. Thanks for reading.

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