The Thin Veil of Insurance

The Charlotte Observer might take the cake for displaying the most economic and policy illiteracy on the topic of health insurance:

For at least 450 people in the Charlotte region, though, faith-based charities are the only things standing between them and their doctor bills.

Sweet said she earns $150,000 to $200,000 a year. But her husband is a stay-at-home father and she said an insurance bill of more than $13,000 a year is tough to absorb. Sweet recently took her 6-year-old daughter, Emma, to the dermatologist. Emma was diagnosed with ringworm, an infection common in small children.

The visit resulted in a $110 bill and prescriptions totaling another $111. If Sweet were insured, she would have likely paid a $20 co-pay for the visit, and probably half of the total cost of Emma's medicine. But as members of Medi-Share, the Sweets had to pay out of pocket for both.

What the *&$%?

Just to clarify, this family IS insured and participation in Medi-Share is entirely voluntary.

If your insurance covers routine medical expenses, it doesn’t mean you don’t pay for them. You just don’t see the bill directly. Instead, you pay for it as an insurance premium. Expanding their coverage and lowering their deductible will not lower this family’s medical costs; it will only reduce the variance. Considering most costs like dental, optometry, prescriptions, routine doctor visits, etcetera are expected expenditures, it won’t even reduce variance.

I expect what this family really wants (or what the reporter told them they should want) is government to pay for their medical costs. That’s fine, but with $150K income this family won’t be getting free medicine. More realistically, they will be paying more than they do now. Part of the extra cost will be spent on an inefficient healthcare system that doesn’t respond to prices and part will be transferred to families who are much poorer and more deserving. A $13K medical bill is hard to swallow with $150K of income?!? Give me a *%&ing break!

What these faith-based insurance plans provide are EXACTLY what people should be purchasing: coverage for catastrophic medical expenses. All other medical costs SHOULD be paid out of pocket. Individuals who think insurance that covers routine expenses is cost effective are either (1) really frightened by the thought of medicine having a price or (2) not smart. By definition, that is not insurance; it’s just a thin veil to hide costs.

If people below a certain income/wealth can’t afford what is considered “adequate” healthcare, fine, give them money. But don’t pretend politicians have the recipe for a free lunch.