Health Insurance is one of the most controversial forms of insurance
because of the conflict between the need for the insurance company to remain
solvent versus the need of its customers to remain healthy, which many view as
a basic human right. This conflict exists, in a liberal healthcare system, because
of the unpredictability of how patients respond to medical treatment; hypothetically,
if a large number of customers of a particular insurance company were to contract
a rare disease costing 100 million dollars to fight for each patient, then the
insurance company would be faced with the choice of either charging all its future
customers astronomical premiums (thus losing customers and going out of business);
paying all claims without complaint (thus going out of business); or fighting
the customers in an attempt to deny the costly treatment (thus outraging patients
and their families, and becoming a target for lawsuits and legislation).
Health Care Resources
According to The Cost Containment Research Institute, Nearly 46 million Americans are lacking health care insurance. Many uninsured sick people who are ill, can not afford potentially life saving drugs or other important health-related items. According to The National Coalition on Health Care, Americans spend about 1/8 of their income on health care, or $4,000 for every man, woman and child in the country. Health care costs have been rising at about twice the rate of income, and health spending is projected to double again to $2.1 trillion by 2007. Fortunately, there are several effective strategies for reducing or eliminating the cost of basic healthcare. Read more
Many countries have made the societal choice to avoid this important conflict
by nationalizing the health industry so that doctors, nurses, and other medical
workers become state employees, all funded by taxes; or setting up a national
health insurance plan that all citizens pay into with tax payments, and which
pays private doctors for health care. These national health care systems have
their problems, too, however; many countries have citizen groups which protest
bureaucracy and cost-cutting measures that delay medical treatment unduly.
In the United States, health insurance is made more complicated
by Federal Medicare/Medicaid programs, which have had the unintended consequence
of determining the price of medical procedures. Many suspect that these prices
are set independent of medical necessity or actual cost. A physician who refuses
to accept a Medicare/Medicaid payment will be banned from accepting any such
payments for a number of years, regardless of the reason for rejecting the payment
or the amount offered. In either case, this means that private insurers have
little incentive to pay more than the government does.
Some common complaints about private health insurance
Insurance companies do not normally announce their health insurance premiums
more than a year in advance. This means that, if you get sick, you may find your
premiums raised a lot. This defeats the purpose of having insurance in the first
If insurance companies try to charge different people different amounts based
on your health, people will feel they are unfairly treated. Some states require
that insurance companies cover all who apply at the same cost; this rule has
the effect (called adverse selection) that healthy people subsidize sick ones,
and thus only really sick people buy insurance and the premiums are very expensive.
By the time a claim is made, it is in the best interest of the insurance company
to use lots of paperwork and bureaucracy to attempt to deny the claim. Some percentage
of people will give up, leading to lower costs for the insurance company.
Health Insurance is only available at a reasonable cost through an employer-sponsored
group plan. This means that unemployed individuals and self-employed individuals
are at a big disadvantage.
Experimental treatments are generally not covered. This is especially criticized
by those who have already tried, and not benefited from, all "normal" medical
treatments for their condition.
The Health maintenance organization ("HMO") type of health insurance
plan has been criticized for excessive cost-cutting policies, the least popular
of which is having accountants or other administrators essentially making medical
decisions for customers by deciding which types of medical treatment will be
covered and which will not.