Wednesday, March 4, 2015

Episode 155, How Much Should Health Care Cost in America?

It’s actually a good question: How much should health care cost in America? At the rate we’re going, we’ll never know.

Few Americans actually know what health care costs them, because they don’t pay for health care in the same way that they pay for food or other things they need.

Health care in America has been heavily distorted for years by government intervention.

Another problem is the way health insurance is used. Insurance is a risk management tool to guard against rare but expensive events. But health insurance policies generally cover routine care and medicine. That’s like using car insurance to pay for oil changes and gasoline.

The end result is that the healthcare "marketplace" is not a marketplace. Health care does not operate at all like a free market, so supply and demand, and their relationship to price, don't follow normal economic rules.

Health care should cost a lot less than it does in America. With a free marketplace, it would.

No comments:

Post a Comment