Why should we even have health insurance?
I agree that this [providers marking up their prices double and triple digits and that part of what health insurance sells is discounts] is a big problem. In addition to preventing price discovery, it makes insurance a requirement even for those wealthy enough self-insure. I’d like to see all providers be required to offer any service at only one price, which they must charge everyone. Then we wouldn’t need ‘insurance’ for its supposed discounts.
This brings on an interesting question. Let’s pretend that business gets out of the insurance business completely. All insurance becomes “individual”; you go on line or something and you buy your own policy. While we are fantasizing here, let’s even imagine that your company pays you each year all that they would have paid before for your health benefits. Let’s also imagine that providers start billing at something close to cost and that this billing is fixed like other services in the sense that everyone is charged the same rate for the same service.
Would we even need to have health insurance?
To me, health care benefits are a form of enforced savings (like Social Security), which is why we would need it even if the market for medical services was like the market for hamburgers. There are some people who don’t need to save because they are rich and can “insure” themselves. And it is true that for the most part, most people each year use fewer services than the premiums they pay out. But medical expenses can be severe when they hit (and they will for most people sooner or later). As long as we live in a society that, as a society, will not allow people to die on the streets, I think it is entirely reasonable to require people to have insurance (unless they have independent means.) This is the same rationale, in fact, as the requirement that we have Social Security.