What about those who can’t afford health insurance?

A family member asked me this as we discussed health care.  This question that rests on the minds of many who are convinced that the government must do something about health care and even those who aren’t so sure, but emotionally they feel like we need to do something.

I think Republicans and conservatives could do a better job of answering it.

The answer I gave went sort of like this:

  1. If you believe that health insurance is unaffordable, consider that bad government policy has helped make it that way.  If so, it would be wise to remove such policies.
  2. Is it really unaffordable?  True health insurance (plans that cover costs after the first $2,500, $5,000 or $10,000) is much more affordable than people think, especially in states that have not gone overboard with bad policy in the form of state mandates.
  3. Understanding how government policy has caused high insurance rates in some states may change some minds about the perceived state of health insurance in our country.
  4. For those people where the cost of insurance insurance is still out of reach, why not use a targeted program like food stamps to put in their hands the resources to decide what medical care is best?

First, if you believe health insurance is not affordable, then consider that bad government policy is a big reason why.

Do me a favor.  Go to eHealthInsurance.com and get a quote for health insurance for your family in your zip code.  On a piece of paper, write down the rate for the policy that best matches the policy that you choose at your employer.  Next, get a quote for the same people in zip code 60451.  This zip code is in the Bronx.  Do you see any difference?  I did.

I can buy a policy with a $2,500 deductible in my area for $265/month.  A comparable plan in New York City costs $1,400/month.

We all know it costs more to live in New York, but this is not the main cause of the rate difference.  The main cause is that New York has different mandates than my state.  To learn more about state mandates, please read my post about Selling Insurance Across State Lines.

New York has two mandates that drive up the cost of insurance.  These two mandates prohibit insurers from denying coverage based on pre-existing conditions and setting prices based on age.

Because these mandates cause health insurance in New York to be so expensive, many people settle for plans that only cover the cost of hospitalization, not doctor fees.  eHealthInsurance.com lists such plans for New York and those cost about the same as the $2,500 deductible policy in my area.

Second, for those who still think insurance is unaffordable for some folks even at the lower rates available where I live and thinks government should help, I suggest considering a program like food stamps.

Food stamps is a targeted program that gives people who meet certain requirements resources to purchase food for their families.

Compare this to the current setup for emergency medical care.  The government has mandated that emergency rooms treat patients regardless of their ability to pay.

What would happen if grocery stores were mandated to give people food regardless of their ability to pay?

It’s not hard to imagine this would encourage some to not make arrangements to be able to pay for food since they could get it for free when needed.  Since stores still need to make money to stay in business, they would charge paying customers more to cover the costs of the food given out for free.

This is exactly what goes on in health care now.  There’s little incentive for those receiving care for free through emergency room visits to ration those visits or to seek a more economical alternative.  Consider if an emergency room visit cost 10 medical stamps while a visit to the doctor’s office cost 1 stamp.  This would encourage the owners of the medical stamps to make arrangements to visit to the doctor’s office, an urgent care clinic or one of CVS Pharmacy’s Minute Clinics for more minor ailments.

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2 thoughts on “What about those who can’t afford health insurance?

  1. Pingback: This would have been nice to know | Our Dinner Table

  2. Pingback: Round and round | Our Dinner Table

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