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Intellections Discussion

Temporary Fix, Permanent Cost: Why Health Insurance Is Expensive

How can we bring down the cost of health insurance?


Making the cost of healthcare visible to the user would help bring down the cost. If you go to the hospital, you will have no idea what your costs are or who will be charging you until weeks or months after you get out. Some users might choose different lower cost options first if they understood the costs of their procedures, etc.

When the ACA passed, many lauded the new option for small businesses to join the "exchanges" in their state. However, exchanges are community rated and happen to be the most expensive option - with the fewest benefits. The ACA does not allow small businesses to band together and create a better risk pool unless they are in a trade organization. This means that small business costs for healthcare have grown at a higher rate and they are unable to offer the same kinds of benefits as larger businesses - thus making an unequal field for recruiting workforce. If the regulations allowed small businesses to band together and form pools - say at a Chamber or other association - then this would bring the costs down as risk is spread across that larger pool.