Nobody in the media talks about the basics of health care insurance. Of course, if you know the basics of economics, you have to start asking some difficult questions, and the media don't like difficult questions.
At the heart of economics is the transaction. You have a buyer, a seller, a product or service, and a medium of exchange. The seller gives the buyer an item or does something that benefits the buyer; in return, the buyer gives the seller money. The seller wants to charge as much as possible, but he knows the buyer can go to other sellers, who may have lower prices. The buyer also knows that there are other sellers, so he attempts to find the lowest price among them.
Almost too simple, right? But you can't even fit insurance into this model. How much does a policy cost? It depends on your age, your medical history, and other variables that they won't disclose. Once you have a quote, what are you buying? You don't really know, because they can rewrite the policy or drop it at any time, for any reason or for no reason. Once you have a policy, what is it worth? When (not if) you get sick, you don't know what they'll cover and what they won't, because they'll do anything to avoid paying a dime to the people who treat you. How does one policy compare to another, so that you know you've made a good deal? Well, you can't be sure of the cost, or the value, or even if you'll have a policy when you need it, so you'll never know if you got the best price. You can't make an informed decision about your purchase when you don't really have any information.
It gets worse. When you have health insurance, what exactly do you have? Nothing but a promise that, when you need medical care, someone else will pay the bills. Insurance is not a product or service in itself. The medical care you receive is a service, but you don't have the option of shopping for it, and you never really know what you paid for it. Insurance companies routinely force medical providers to take a lower fee for the promise of getting more customers. In another industry that would be called a kickback.
It gets worse. You've heard horror stories about people losing coverage, so there's no need to go into that here. If it happens to you, what do you do about it? In the classic transaction, if the buyer is cheated, he knows not to buy from the same seller again, and he will tell all his friends about the bad seller. The seller knows, even if he makes a short-term profit from cheating someone, his bad reputation will mean a long-term loss. If the insurer cheats you, though, where can you go? When your employer provides your coverage, you have no choice. It would be nice if your employer gave you some money and let you pick the insurer, but in some states that's illegal.
Suppose you could go to another company? Well, in most states, you only have one other major player. In 39 states, two insurers control more than half the action, and in Hawai'i the top two control 98 percent! You see plenty of ads for car insurance; you don't see many ads for health insurance because there's no point. In another industry that would be called monopolizing the market. The insurance companies write their own rules, though, so it's not only legal, it's mandatory.
Can it get any worse? Oh yes. We all know that the price of insurance is increasing much faster than inflation. Where does that money go? Before HMOs, and even as recently as 1995, about 96 cents of every premium dollar went to medical expenses. That's what you pay the premiums for, right? Today that number is closer to 80 cents. The difference goes, not into profits for the insurance companies, but into overhead and reserves. Insurers, as a matter of course, refuse to pay benefits. You have to dig up papers, fill out forms, make phone calls, all to get something you've already paid for and were promised you would get. They're wasting resources, you're wasting resources, and we're all paying for it. We pay twice as much for health care as civilized countries, and that's one big reason.
Another reason we pay more is because government tilts everything in their favor. Congress tried to pass a law requiring them to pay out a minimum percentage of premiums. They made sure it died.
The other expense is reserves, that is, money put aside to pay future claims. But insurance companies literally have so much money they don't know what to do with it.
There are two bottom lines. Economically, if you consider your health as an asset, you have to pay to maintain it, just as you would a car or a house. Here is the root of the problem: the term "health insurance" doesn't make sense. You buy insurance, not to maintain an asset, but to replace it. You can't replace your health. If you can't afford to maintain your house, then eventually it collapses, and you're left with nothing. If you can't afford decent health care, if you can't maintain your health, it will collapse.
Here's the other bottom line. If America considers itself religious at all, if we believe that human life is important at all, then we have a moral imperative to make health care available for everyone. Jesus didn't tell people to work harder and buy things, he healed them. People who support the current system either refuse to see how broken it is, or believe in an amoral capitalist system, or blindly follow demagogues who are profiting from disease and death.
Health insurance as we know it is inefficient, unfair, opaque to consumers, and basically a criminal enterprise. There is no free market.
What ya gonna do? The whole point of insurance is to pool the risk. A small but predictable fraction of people will need huge amounts of resources to deal with serious illnesses. A small fraction will need next to nothing. Everyone else will need occasional treatment and checkups. If everyone pays into the same pool, the payments are as small as they can get, and the risk is minimized. That is known as the single-payer system, but it was never seriously considered when they "reformed" the system in 2009-10.