You first have to understand what insurance is first. Simply you and I put a few dollars a month into a jar. If either of us get sick, we pull form the jar. If we both get sick, then we have to find someone who is not sick to contribute to our jar and it goes on.
Insurance Companies Negotiate with providers to come up with what they are willing to pay for an aspirin, for example. That is also based off of what the governments will pay for welfare care. Indigent care is also included. So, based off of that, the insurance company has agreed to pay UP TO $1 per pill in this case, the provider will always charge the maximum they can get. Try for yourself. If you have spent the night in the hospital, you will always see a charge for $9,999 for misc. - to include aspirin. Why? This is the maximum charge the insurance company will accept without the charge being itemized.
Insurance companies bring in Premiums, then may re-invest those premiums back into the market and usually try to find safe and short investments. Why the government
had to bail out AIG, they had too much premium invested in a failed market - example, they owned airplanes that are leased to airlines and make a safe return on that investment.
So, with the new healthcare laws, do you see that as getting better, or worse?
You point out a great example of why things like HSA's are better ways since if we had to go from Doctor to Doctor finding the best deal, we could probably find not only a better deal all round, but even cost us less than fully insured deductibles in some cases.
Areas of medicine that are allowed to be competitive such as Lasik, for example have come way down over time because the doctors are more competitive, get paid at the time of service
, and don't require entire staffs just to submit claims to either the Government
or Insurance Companies.
Dental is another example. Not too many years ago, it was thousands for an implant, now it is hundreds. Again, find anything that is set by insurance, Medicare, etc. that you can say the same about.
Drugs are another item. When a drug company comes out with a new drug, they charge a fortune for it until their patent expires and generic are allowed by other drug makers, then compete. Good and Bad. The drug maker has to develop the drug, test the drug, get approval for the drug, then market the drug. And the biggest - accept liability for the drug even after the patent has expired. Just watch tv late at night on any given night and you will hear of a class action lawsuit against any given drug maker.
I have insurance, but my primary care doctor does not accept any insurance. The cost to go to him is $10 more than my copay, but get right in at anytime. So, why am I getting better service
and care from a Doctor that ultimately gets less money
to see me?
Now, your insurance company would be happy if you went to a facility that only charged $700 for something they were billed $4700 for and a lot of employers pay companies to do the research
for you... Yes, your employer (if you are insured through where you work) has a stake in the game
too. Your claims affect their premiums, so they want to keep you healthy and going to doctors that charge less for the same services.