There was a time when doctors were paid in cash or some form of barter exchange.
“In 1900, the average American spent $5 a year on health care ($100 in today’s money). No one had health insurance, because you don’t need insurance for something that costs $5 a year.” (NPR)
Women had their babies at home. Jimmy Carter was the first President to be born in a hospital. Hospitals marketed themselves as safe and clean places for women to deliver their babies.
Insurance, paying a little each month for future unplanned medical treatment, grew out of the Baylor University Hospital in Dallas that eventually became Blue Cross. The insurance was marketed to groups of workers like school teachers. A pool of insured people spread out the financial risk.
Employer-based healthcare developed when companies needed a way to attract workers. After World War II wage and price controls were placed on businesses. To get around the restrictions, free health insurance was offered.
“In 1943, the Internal Revenue Service ruled that employer-based health care should be tax-free. A second law, in 1954, made the tax advantages even more attractive.” The legal ruling made it appealing to companies because the expenditure could be written off as a business expense, and employees who did not have to pay taxes on the value of the insurance they were receiving.
“By the 1960s,” economic historian Melissa Thomasson says, “70 percent [of the population] is covered by some kind of private, voluntary health insurance plan.”
As “health care became much more effective,” it also became “much more expensive. Clean hospitals, educated doctors and real pharmacological research cost money.”
What if we dropped all the government mandates and people only paid for the medical care they wanted with no middle-man? Could it work?
When Art Villa found out, after one too many boating accidents, that he needed a total knee replacement, he began asking around to see how much it would cost. The hospital near his home in Helena, Mont., would charge $40,000 for the procedure, he says. But that didn’t include the anesthesiologist’s fee, physical therapy or a stay at a rehabilitation center afterward. A 2015 Blue Cross Blue Shield study found that one hospital in Dallas billed $16,772 for a knee replacement while another in the same area charged $61,585.
It was in the midst of this confounding research that Villa, who’s 68, heard about the Surgery Center of Oklahoma, whose business model is different from that of most hospitals. There, the all-inclusive price for every operation is listed on the website. A rotator-cuff repair for the shoulder costs $8,260. A surgical procedure for carpal tunnel syndrome is $2,750. Setting and casting a basic broken leg: $1,925. . . . The catch is that the whole facility is cash-based. It doesn’t take insurance of any kind. (TIME)
The price for a full knee replacement would cost $19,000. That price includes “everything from airfare to the organization’s only facility, in Oklahoma City, to medications and physical therapy. If unforeseen complications arose during or after the procedure, the Surgery Center would cover those costs. Villa wouldn’t see another bill.”
The price would be lower if there more centers so patients would not have to travel far.
A lot of critics would say that most people could not afford that kind of a layout in cash. That’s true. The same is true about buying cars, homes, taking vacations, etc. Just because some people can afford more expensive items does not mean they should be forced into a system controlled by the government that raises the cost for everyone.
By eliminating government control and mandates, doctors and hospitals would have to compete for patients based on quality of care and price. The same is true of insurance companies. Let them compete across state lines. Medi-Share, Samaritan Ministries, and Liberty HealthShare are options for many people that are available right now. Technically, they are not insurance. People share the costs of healthcare with no government interference. People choose their doctors and pay cash.
Why do healthcare costs keep going up when every other competitive commodity has gone down in price while the quality goes up? Think computers and mobile phones. Where would we be at this point in history if the government had decided to regulate the computer industry? Look what’s happening to the cable and satellite industries? At first, they competed with broadcast television that was regulated by the government, and now streaming video delivery from Netflix, Amazon, Hulu, and others are forcing the cable/satellite companies to adapt.
The American people should be permitted to make their own choices without the government mandating what should be covered.
Building a healthcare system on redistribution of wealth is not the answer. In time, you run out of other people’s money. When you are using someone else’s money to pay for something, there is little regard for cost.
Here’s the major problem: Government is involved in every area of our lives. The government lives on high taxes, unlimited spending, overregulation, a bloated bureaucracy, and a voting public that likes free stuff that other people pay for
Legalizes Inexpensive Insurance Plans:
- Ensures that Americans can purchase the health insurance coverage that best fits their needs.
- Eliminates Obamacare’s essential health benefits requirement, along with other restrictive coverage and plan requirements, to once again make low-cost insurance options available to American consumers.
Protects Individuals with Pre-Existing Conditions:
- Provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
- Restores HIPAA pre-existing conditions protections. Prior to Obamacare, HIPAA guaranteed that those in the group market could obtain continuous health coverage regardless of preexisting conditions.
Helps More People Save To Buy Health Insurance and Cover Medical Costs:
- Incentivizes savings by authorizing a tax credit (up to $5,000 per taxpayer) for individuals and families that contribute to HSAs.
- Removes the annual cap on HSAs so individuals can make unlimited contributions.
- Allows HSA funds to be used to purchase insurance, cover premiums, and more easily afford a broader range of health-related expenses, including prescription and OTC drugs, dietary supplements, nutrition and physical exercise expenses, and direct primary care, among others.
Guarantees Fair Tax Treatment of Health Insurance:
- Equalizes the tax treatment of the purchase of health insurance for individuals and employers by allowing individuals to deduct the cost of their health insurance from their income and payroll taxes.
- Frees more Americans to purchase and maintain insurance apart from their work status.
- Does not interfere with employer-provided coverage for Americans who prefer those plans.
Helps Individuals Join Together to Purchase Insurance:
- Expands Association Health Plans (AHPs) to allow small business owners and individuals to band together across state lines through their membership in a trade or professional association to purchase health coverage for their families and employees at a lower cost.
- Also allows individuals to pool together through any organization to purchase insurance.
- Widens access to the group market and spreads out the risk, enhancing the ability of individuals and small businesses to decrease costs, increase administrative efficiencies, and further protect those with pre-existing conditions.
Allows the Purchase of Insurance Across State Lines:
- Creates an interstate market that allows insurers who are licensed to sell policies in one state to offer them to residents of any other state.
Increases State Medicaid Flexibility:
- Enables states to fully exercise current flexibilities afforded to them through Medicaid waivers for creating innovative state plan designs.
- Allows non-economically aligned physicians to negotiate for higher quality health care for their patients.
- Amends the Internal Revenue Code to allow a physician a tax deduction equal to the amount such physician would otherwise charge for charity medical care or uncompensated care due to bad debt, limited to 10% of a physician’s gross income for the taxable year.
You can read the full bill here.
The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by EagleRising.com