Greetings all, first time poster long time reader.
I'll just introduce myself, my name's J-F and i'm an insurance broker based in Montreal.
I see a lot of questions about the rise of healthcare insurance costs and the difference between free market systems and single payer systems, so I thought I'd try to shed some light on it. Bear in mind however that there might be a lot of differences between USA insurance companies and Canadian insurance companies so while my advice is very on point for Canadia, US citizens better take it with a grain of Nackle.
Let's start with a first question:
What are healthcare insurance costs based on
Like everything insurance, premiums are almost always based on actuarial tables. That is to say, some nerdy dude at the insurance headquarters takes hundreds and hundreds of demographic data based on your neighborhood, your city, and your age and crunches them together in order to come out with actuarial tables. These tables will posit an average expected refund per citizen per coverage on medical costs, then the insurance company works in a small margin of profit in the product, and rolls the dice, hoping you'll be less sick than their estimate. While we do have free healthcare in Canadia, most people also have a health insurance also to add coverage on top of the base government refunds (55% in my province, people usually like an 80% refund) or to pay for fringe benefits like dental and paramedical (acupuncture, massage therapy, psychotherapy etc.), so in effect we don't only have free healthcare, we also have a free market insurance. But the highest I've seen that insurance cost in a year (for a family plan for a 70 year old man) is 4500$ (and that was an almost 100% refund coverage).
That is because
increases in medical costs increase insurance premium if you have a regulated service provider (the government) who pays the first 55% of any medication, and 100% of surgeries and other urgent medical care
you control what these things cost and make sure it is affordable for everyone. Yet even with all that, inflation for medical costs in Canadia is 12%, mainly because while the healthcare system is regulated, the pharmaceutical industry isn't.
I urge you to watch this 5 minute video before going further, if you're still with me:
https://www.youtube.com/watch?v=CeDOQpfaUc8
I can't do it better than Adam so I'll just link him. As he very astutely describes here, the US medical system is stupid overpriced. Seriously? Seriously. Seriously??? Seriously!!! (yes that was a gray's anatomy reference)
So if you understand where premiums come from (actuarial tables) and understand that they factor in grossly bloated prices, is it any wonder premiums have gotten this ridiculous? And at that point, is it really the insurance company's fault? What the Us needs is to establish baseline medical coverage in order to assert
control over the system, and to insure
regulation of prices. As long as you do not have that in place and still believe in a free market competition to diminish prices then I am sorry but that is not going to happen because as far as the free market goes these prices ARE competitive, they factor in all costs and a very narrow profit margin.
As for mr. weinersmith, and this is HIGHLY speculative, but in Canadia collective insurance (which benefits from tighter pool based reductions) can be applied to any group that fills out the following conditions:
A- Is a group with clear guidelines and monetarily involved members
B- Everyone involved works more than 20 hours a week
C- Has a clear legal person to defer to
D- Is together for purposes other than group insurance
What I would suggest is to get those small business owners together and create the ''super duper awesome small business owner's association'' (Name can be modified) who's mission it is to ''increase profits through coordination of marketing events and business development fairs''. Go see a lawyer, have him register up a non profit in that name, elect an administrative board.
Then vote to offer group insurance to everyone and get a broker. Not an insurance rep from one company, a
broker.
His job, if he's even mildly competent, will be to find the best group insurance he can at the most affordable price, and then to help you keep prices low.
It's a bit of work but assuming similar legal basis, it will work.
My 2 cents people.