Dear Dave: Why is health insurance so expensive?

http://www.twintierfinancial.com — Sat, 06 Mar 2010 09:13:07 PST

Health care reform seems to be one of those topics that keeps coming up these days. That's understandable due to the fact that Obama is hell bent on having health care reform. With all of of the many voices on Washington, in the news media, and probably even at your own workplace offering so-called solutions to the problem, what is really being ignored is the history of the problem. It's amazing that anyone would try to solve the problem without first understanding it...but that is exactly what is happening. This problem is really a problem of Government intervention into the economy. There is a LOT of history behind this. Much more than most people are even aware of. I've blogged about the problems with the Blue Cross model before and Government intervention that causes an increased cost of health care, but I want to address a specific aspect of the problem that contributes to ridiculous cost overruns in the health insurance side of the equation. Health insurance today, in many respects, is not really insurance. When you buy a policy from Aetna or Blue Cross, you are-most of the time-not really buying insurance as much as you are purchasing a prepaid medical care policy. Of course we call it insurance, because what else would you call it? Health "insurance" doesn't operate on traditional insurance principles, for the most part. It is a "pay as you go" system. That means that premium dollars come in and are paid out as benefits...

A Revolution In Financial Planning

Dear Dave: Why is health insurance so expensive?