Amy Phillips tackles the question, Why is health care so expensive? She sites several factors, but focuses most of the essay on government mandates, including the requirement to pay for things as wide-ranging as oral contraceptives, in vitro fertilization, cosmetic surgery, and drug rehab. While all possibly meritorious, she notes,
The point is that all of these mandates for treatment that most people don’t need make insurance more expensive. These laws also make it more difficult for insurers to offer partial coverage at a cut rate, because if they’re going to insure against anything, they often have to insure against everything. That means that if you can’t afford insurance that covers reconstructive surgery after a mastectomy, you can’t have insurance against getting hit by a bus.
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The bottom line is that the more stuff that’s covered, the more expensive the insurance will be, because if a service is offered, someone will take advantage, the insurance company will have to pay, and they’ll take that money from all subscribers in the form of higher premiums. I’m sure that millions of uninsured Americans who worry about who would pay the bills if they had a car accident or a heart attack would be happy to forgoe coverage of toupees and wigs in order to get affordable coverage for routine medical care. And I think that insurance companies are perfectly capable of offering different coverage to meet the needs of different individuals and companies just like thousands of other service providers do. I’m not required to pay for a leg wax if I go in for a haircut. So why should I be legally forced to pay for infertility treatments I’ll never use just because I want to be covered if I get run over by a bus?
In any case, there’s good reason to believe that rising healthcare costs are not due to insurance company greed so much as they are due to bad government policies that are trying to help us and failing. I won’t go into how the entire healthcare system has been skewed by the tax incentives given to employers who offer health insurance that are not available to private individuals who buy the same insurance, but that’s another problem. Our insurance premiums rise every year at least in part because we’re required to pay for services we may not want, and in some cases, services we might think are immoral, or at least frivolous and unneccessary. Individuals should decide for themselves how much coverage they need and what they need coverage for. I don’t need the government telling me that I should spend my money paying for well child care when I don’t plan on having children any more than I need them telling me that I should wear a sweater because it might get cold outside. But beyond the freedom issue, there’s a basic economic fact: the more insurance costs, the fewer people will be able to afford it. If we’re really worried about the uninsured in this country, we should let them buy the healthcare they need instead of forcing them to pay for healthcare that other, more financially solvent people have the luxury of demanding.
Indeed.
Optional coverage packages are often rather random. For example, in almost all plans, lasik surgery to correct congenital nearsightedness is considered “cosmetic” and therefore excluded, yet getting cosmetic surgery to replace breasts lost during a mastectomy is considered necessary. And, while I favor decriminalization, why is help to quit committing crimes–i.e., injecting heroin into one’s veins–considered a necessary medical expense?
