Susuto

“Insurance is always a subsidy, plain and simple. All insurance works by having the masses (the healthy) support the few (the sick). The larger the pool of healthy people, the less the plan can cost.”
That is a very bizarre characterization. First of all, a subsidy is something paid by the government to abet (i.e., *subsidize*) an existing private agency or industry. So, until the government is involved, it’s not a subsidy. If the government were involved, it would not buy insurance because as the only entity with an unlimited supply of funds, you would be in serious trouble if they needed to appeal to someone else to protect their financial liability. And when you subsidize something you are effecting to encourage it… the way you phrase things, are you talking about encouraging people to be sick?

Terminology aside, you misunderstand the function of insurance. First of all, sick people don’t get insured. You don’t go up to someone and say, “I need a $200,000 treatment, can I get that for a $400 premium?” So it’s not healthy people doing any service to sick people. It’s a bunch of healthy people getting together and deciding to distribute the risk for future unhealthiness.

Looking at it from an economics perspective, there is a certain expected value for your medical costs based on the probability of your incurring various ailments. Theoretically speaking, you would be better off skipping third-party insurers altogether and simply covering yourself for this expected cost. At least, that would work out best for *most* people. But there are the outliers who are put in some rare and expensive position. And meanwhile there are many people who wind up not using the money they set aside. But, the way averages work, if you pool everyone’s money together, then pooling the expected values will cover everyone for the minimum cost.

“The insurance companies, pharmaceutical companies, doctors, etc. have realized that they can basically charge whatever they want and people will pay it because it’s their lives at stake.”
I don’t think you have ever talked to a living actuary or medical physician about their pricing practices. If an insurer decides they’re going to jack their pricing policies they better have a good excuse for the feds.

But let me address your contention with an analogy, which is this: water is even more fundamental to life than reliable medical treatment. So, I should be able to charge anything I want for a glass of water, right? $100… $1,000… $1,000,000? Who wouldn’t pay that for their own life?

Of course, that is absurd, because I will not pay such a sum, even for something I desperately need to survive, provided I can get it somewhere else cheaper. And it is exactly the same way with medicine. As long as it is a true capitalism with real competition, then price will be pushed to down to the lowest that people are willing to provide, totally regardless of how much I would be willing to pay if I had no other choice.

The major problem with the American system is that it is not a capitalism. When was the last time you remember ’shopping’ for a doctor, or a treatment, based on price? But it is not socialist, either! It is a terrible hodge-podge of both that doesn’t really work for controlling prices (although it does at least attract good doctors/facilities/R&D).