After the presidential election there will be no cheap health insurance


The Presidential campaign is entering the final stages but there are still no proposals from either Democrat or Republican candidate on how to control health-care costs. This is fundamental to producing a fair and accessible health service but the issue is not being addressed. What we do have is a proposal from Romney and Ryan to redesign Medicare as a voucher service. It’s faintly possible this might cover all costs for the first six months, but it’s certain a gap would rapidly open between the actual prices for treatment and the value of the vouchers.

The only way of bridging this gap would be for seniors to pay out of their own savings or buy private insurance. As it stands, Medicare does a good job of holding down costs. As a monopoly buyer for services, the prices have only been rising at half the pace in the private sector. Private insurers have no incentive to control costs. If they are not making enough profit, they simply increase the premium rates.

There is, similarly, very little enthusiasm from the Democrats to take on the medical lobby or the pharmaceutical industry, although there is, however, a move to more preventative medicine. Drug prices are shooting up and doctors refuse to accept an evidence-based approach to determine what treatments offer the best value-for-money to their patients. In a capitalist system, doctors and hospitals are for profit and not altruistic. So although the Affordable Care Act will have insurance exchanges in place for 2014, the competition will not of itself control medical costs. Premiums will be pitched at rates to pay the current costs and make a profit for the health insurance companies. In other words, the policies of both parties are fundamentally flawed.

For middle-class policyholder this will mean, sadly, that it is likely that there will be no cheap health insurance for them. There will, of course be subsidies for those on or below the poverty line, but the health insurance quotes for everyone else will continue to rise faster than the rate of inflation. In due course, this will make insurance increasingly unaffordable.

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