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Intellections Discussion

What’s Wrong With Health Insurance in America?

How free is the market for health insurance in the United States?


The market is not free, with many providers of the same product at high cost.

It clearly is not free at all. Mandated coverage. Mandates that insurance must cover people with pre-existing conditions. It is hard to imagine a more centrally planned, inefficient mess than health care in the U.S. currently is.

I bought my own individual insurance for the first time this week, in order to be covered in 2017 (I previously had received insurance through my employer). In my state, I had TWO options to choose from, neither or which let me keep my current healthcare providers. This does not appear to be a free market.

It is restrictive, but politics are involved in that. Companies pulled out of certain regions or states and those decisions are not just economically driven. Sometimes its leverage. Still, prior to the affordable care act I couldn't get insurance at all. After COBRA expired in May 2010 no company, not even the company I was with, would insure me, except for one who wanted to charge $800/month. What was disgusting was that I only saw a doctor periodically to monitor my blood pressure, caused by a chronic condition which I contracted through no fault of my own.

As far as I understand the market mechanism is greatly hampered by the presence of health insurance. This happens when patients and doctors order care without being able to know the price. No price mechanism, no free market for health care. There is, of course, a price mechanism at work for health insurance, but that is too far removed from the process. You may be thinking that insurance companies can push down on healthcare prices by negotiating with health care providers. that's true, but not enough to counter the effect of spending without knowing price.