Proponents of the current proposed health care reform legislation are stressing “consumer protections” measures in the bill, including:
• Prevent insurance companies from denying coverage for pre-existing conditions
• Cap the amount insurers may require policyholders to pay out of pocket in a given year
• Require all insurers to cover routine check-ups such as mammograms, colonoscopies, and eye exams.
• Prohibit insurers from dropping or "watering down" coverage for someone who has become seriously ill.
• Eliminate both yearly and life-long spending caps
Politicians seem to believe that insurance companies grow money on money tree farms and they’re simply too stingy to cover any and all treatments for any and all health issues that might occur. They also omit a small detail – having “insurance coverage” is not synonymous with “treatment”.
In fact, insurance companies must obtain resources to pay for health care for sick individuals by collecting premiums from the pool of policyholders. They are limited in the amount of coverage they may provide the sick because there are natural limits on how high the premiums they charge may rise before people start opting out of the pool and stop paying their premiums. It’s a trade-off. A large reason for the estimated 10 million young uninsured who make over $50,000 per year is that they don't find the expensive, mandate-laden coverage worth it.
If the insurance company must pay for all of this additional coverage and take all the additional risks imposed by legislators, it must also collect additional premiums. This can only mean that premiums for private insurance will either skyrocket, or insurance companies will soon be overwhelmed by claims and go bankrupt - or they will have to “water down” care and deny certain treatments.
Will government be able to do better? The government has a problem similar to private insurance companies – it must collect money in the form of taxes from everyone else to pay for the treatments it promises the sick. The only problem with that plan is that “everyone else” is a much larger voting block than the few sick people in our country at any given time. It is difficult to imagine that tax rates can be raised high enough to make good on government’s promise of top-notch coverage for all if they should be unfortunate enough to become truly sick. In fact, it already limits (“waters down”) treatment in its Medicaid program for cost reasons, as do all other countries with socialized medicine.
The bottom line is that there is no free lunch. There is no such thing as unlimited coverage coupled with cost controls. It’s one or the other. At some point, you will not be able to force someone else to foot the cost of your $40,000 treatment to give you a 5% chance at 6 more months of life. The difference between a government run health care system and a private system is who gets to decide what your life or limb is worth and who decides how much health insurance coverage you must purchase. In a private system, you have the option to pay out of pocket for the difference between what the private insurer won’t pay and what your life or limb is worth to you. In a government (or "public option")system, that decision is made entirely by the government.