Daily news announcements tell us that the health insurance system in the U.S. is failing. Democrats and Republicans argue over the “correct” way to pay for insurance for millions of Americans. Politicians at every level trample each other trying to give something to voters – ostensibly to satisfy some basic need but largely meant to win votes. What is often missing is any discussion or understanding of how health insurance developed, or what it is meant to do.
Health insurance was never meant to eliminate any personal obligation to share the cost of healthcare. It was designed to protect us from catastrophic expenses. Whether it is Medicare or employer-sponsored health insurance, the original plan was to prevent financial ruin from those dramatic medical bills that no one can afford. In 1960, individuals paid 60% of physicians costs “out-of-pocket,” whereas, by 2017, the out-of-pocket cost paid for physician expenses had fallen to 9%. Similar shifts occurred across the spectrum of healthcare; hospitals, nursing care, even dental where the shift fell from 96% to 41% being paid by the member. Of course, over those intervening 57 years, all healthcare costs have increased dramatically. Shifting of costs to insurers is a logical result as the dollars became harder to pay. My colleague, Craig Hasday, wrote about healthcare cost abuses in last Friday’s blog post.
The rise in costs isn’t the only issue. As in many areas of life, personal responsibility seems something that we’ve lost – many of us don’t want to take responsibility for gaining weight, reducing physical activity, failing to get enough sleep, refusing to follow physicians’ instructions or take medication as instructed… Along with this, personal attitudes toward health insurance have also changed as I’ve witnessed in my 38 years in the business. No longer is protection from catastrophic events what individuals want from their health insurance…increasingly, people want small – or no – personal obligation at all.
At the same time, employers have battled to design benefits that make employees happy and politicians have tripped over each other trying to curry favor – and votes – by assuring us that, if elected, they will cure all our ills; that everything is someone else’s fault and we’re blameless. Healthcare system abuses and rising costs are not to be taken lightly, but Americans need to acknowledge that our own lifestyle choices have a tremendous effect on the system and our collective cost burden.