Free Clinics

It is interesting to hear the prognostications of economists when it comes to health insurance. They often talk about the cost of care as a compared to Gross Domestic Product. They say the country will go bankrupt if we do not get cost under control. Our legislature in Washington tried to attack this issue with a 2000+ page bill to control about 20% of the nation's economy. The people shut this bill down. Currently, about 90% of Americans have individual or group insurance and, for the most part, are happy with their coverage, but unhappy with the expensive premiums. Are these expensive premiums the result of how much it actually costs to buy insurance, or are these premiums more expensive in order to cover the cost of the inefficient Federal and State programs?

The cost of “health care” drives the cost of health insurance. If the cost of care was less expensive, the cost of insurance would be less expensive. This being said, the private sector reacts to the price of health insurance and health care. When cost increase, the public market reacts, by limiting coverage and raising deductibles. The problem is that government-sponsored programs, like Medicaid and a host of other State and Federal programs, are unaffected by higher deductibles. So a privately insured individual moving to a higher deductible plan has a point of diminishing return when the savings are being gobbled up by government plans and the social welfare network. The government does not pay claims at market rates. These artificially low rates create an imbalance, and the health care providers increase the cost to the private payers in order to make up for the low reimbursements they receive from the government plans.

The State and Federal plans need to get their costs under control. Government programs need to create local clinics where they can control cost. Some will complain this type of change will create a two-tier system of health care delivery. Perhaps it will, but is that so bad? At least we will have a good clinic system that takes care of the folks who cannot afford health insurance with fixed cost. A national clinic program will lower the cost of government-run programs, which will lower the cost of private plans because the fee for service system will be replaced by a cost controlled State and Federal clinic program.