It’s time for us to have an honest discussion about health insurance.
We need to abandon misnomers like “marketplace” when describing President Barack Obama’s health care law, which we found out this week will be subject in 2017 to skyrocketing premiums and fewer choices in the health care, ahem, marketplace.
But it’s not really a marketplace, is it? Marketplaces are subject to market forces and lack influence from governments and government subsidies—a centerpiece for the 2010 law.
Insurers are leaving the exchange to shield their bottom lines as customers benefiting from the law are sicker and more costly to insure than they had expected.
Those benefiting most from subsidies may not feel the worst of the pinch from rising prices, but for them, fewer insurers also means limited options for health care providers.
For instance, Lexington Medical Center currently has no agreement with BlueCross BlueShield of South Carolina on the exchange, according to a report by Columbia television station WLTX.
It’s no mystery why health care and insurance was so expensive even before so-called Obamacare took effect. Taxpayers subsidized health care for low-income and disabled patients, and patients 65 and older. Hospitals were required to treat anyone walking through the front door, regardless of their ability to pay.
We can have a separate discussion on the morality of these forces, but they are not market forces. Still active today, they are government forces that obscure the marketplace, forcing prices up. The Affordable Care Act fix hasn’t changed that.
We can’t know how a health care industry devoid of government intervention would look in the short term. But we can make an educated guess.
Insurance is designed to hedge against risk. While health insurance isn’t set up that way, car insurance is. Insurers don’t cover flat tires and oil changes, and the layers of government intervention bolstering health care don’t exist among auto insurers.
And the result is a still expensive, but mostly affordable, predictable and stable hedge against risk.