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Small Business Employee Benefits and HR Blog

Getting the money to the right people

July 8, 2009
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I want to follow up on something that I mentioned when summarizing Obama's speech from last week.  If there's one thing that everyone can agree on, it's that a country as rich asMoney to the right people America should be able to come up with a system where everyone can get basic healthcare.

The disagreements begin as soon as you try to discuss who should be paying for this basic healthcare.  It seems like about half the country wants health insurance to work in the free market just like everything else in America and half the country wants "free" and equal healthcare for everyone.

I'm sorry to be a boring moderate, but neither of these systems make sense if the main goal is to make sure every American has access to our top-notch healthcare system.

There's no such thing as free health insurance

I put the word "free" in quotes earlier because there's obviously no such thing as free healthcare.  If the government is paying for our care, that means we're paying the government that much more in taxes.  We're actually paying significantly more than the actual cost of the medical care because any organization as huge as the U.S. government is going to be wildly inefficient.

For those of us that are healthy and have decent jobs, the idea of paying the government for our health insurance is terrifying.  In effect, I'd be giving the government a dollar and they'd spend half of it in administrative costs.  Then they'd give the remaining 50 cents back to me in the form of healthcare.

It doesn't make sense for anyone that is insurable to get coverage from the government.  That basically just guarantees that everything will cost more.

But wait..

In a free market, sick people are left for dead

Insurance companies are businesses and they have no incentive to cover someone at a loss.  If someone has a preexisting medical condition, they won't be profitable to cover and so they simply won't be able to get insurance.

This is unnacceptable.  Whether you like the federal government or not, they're the only ones that can protect us from being abandoned by an unregulated insurance system.  And yes, we do need protection.

The question is...

Just like with every other political issue, most people aren't debating what really matters.  The question shouldn't be "big government vs. little government" or "socialism vs. capitalism".  The question should be, "How can we most efficiently get money to the people that need it (sick, poor, elderly) without wasting money on the people that don't need it?"

Someone that is already sick and doesn't have insurance needs government help.  If you disagree, I'm sure you'd change your mind if you got sick and lost your group coverage as a result.  Forget all the propaganda.  Our system more or less works for healthy people (emphasis on the less, but it's still not the big problem).  We currently have systems to redistribute wealth to the people that need it (Medicare, Medicaid, State Risk Pools) but they aren't financially sustainable.

So to recap, regardless of where you stand on the issue, the main topic that we as a country need to figure out is how we should subsidize insurance for the minority of Americans.  I realize I haven't actually said how I think we can do that.  I think I'll leave that for another post.

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