Why is health insurance so unaffordable?

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Honestly, I have never been a big fan of insurance. I am not much of a gambler, and paying for insurance feels like betting on my own misfortune. I have never purchased insurance for a cell phone or appliance. I would rather save the money and make an effort to take care of my possessions. I reluctantly have car insurance, homeowners’ insurance, disability insurance, life insurance, and health insurance. The only insurance I have ever used is health insurance, and that’s because health insurance is not actually insurance.

Typically, insurance works by charging a large number of people a low fee to protect against an unlikely catastrophic event, such as a house fire or a totaled vehicle. Health insurance was previously used this way. Patients paid their doctors directly for medical care and turned in their own insurance claims when needed. Routine medical care was affordable for most, and doctors would often write off bills for patients in need. Insurance was used for major surgery, hospitalizations, or cancer treatment.

Health insurance has morphed into a comprehensive pre-paid health care plan with unaffordable premiums. Many families spend over $20,000 annually on health insurance premiums and still pay out-of-pocket for all of their medical care due to high deductibles. Insurance is meant to protect against financial catastrophe, but in the case of health care, insurance is the financial catastrophe. Patients do not realize that their doctors are receiving ever lower reimbursement and are spending over half their time engaged in meaningless insurance paperwork to get paid and to get the appropriate treatment for their patients. They cannot understand why their health care quality continues to drop as they pay more and more.

Imagine if your car insurance worked like your health insurance. You would be forced to pay $1,000 per month for car insurance, but it would cover gas, oil changes, car washes, tires, windshield wiper blades, regular maintenance, and repairs.

Of course, the prices for all of these services would increase dramatically, and you would have no way of knowing the price until months later. Also, you would pay a $20 copay for all services and would be responsible for the first $3000 of costs each year. However, after paying that first $15,000, all costs associated with your car would be free! Keep in mind that you would need to stay in-network. You may have a habit of swinging into the Wawa every morning on your way to work, but one day you learn that Wawa is now out-of-network, so now you are responsible for paying $250 for a tank of gas. Of course, you could drive 15 miles out of your way to get your tank of gas covered at 7-Eleven, after you pay the copay and deductible. Also, you have to go inside, wait in line, show the gas station attendant your car insurance card and fill out five pages of paperwork prior to filling your tank.

Americans have been brainwashed to believe that our current health care system is the only way to pay for health care. Of course, this is not true. The main reason that health care is unaffordable is because of the health insurance companies and all of the administrative middlemen who profit off this system. The only way for this system to change is for doctors and patients to demand better. If doctors stopped billing insurance and instead offered affordable cash prices for medical care, patients would not need to purchase these expensive prepaid health care plans and could opt instead for affordable catastrophic plans or for health-sharing plans, such as Sedera for as low as $136 per month. In my direct primary care practice, patients get all the primary care they need for $75 per month, and I help them navigate the system to find the best prices on screening and diagnostic testing, medication and other treatments.

Emily O’Rourke is a family physician.

Image credit: Shutterstock.com

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