The announcement of a large spike in health care premiums for school and town employees is generating a lot of concern among taxpayers, and for good reason. But the reasons for the hikes are not so good. Insurance companies are raising our premiums because they can’t make any profits from investing the money we pay them since Wall Street trashed the financial system. Take a look at your savings account since 2008 and you’ll see the problem.
Insurance companies can do this because citizens don’t have the expertise to comparison shop for doctors, hospitals, medications, or treatments the way we might for a car or computer. We can’t pay for major care out-of-pocket, so we must rely on insurance, thereby losing the final say in what to buy or how much to pay for it. Markets work only when consumers have the power to say no if the price isn’t right. It’s pretty hard for anyone to say no in the case of things like end-of-life care or brain surgery, let alone childbirth or infections.
Because the market is not free, insurers can raise our rates whenever they need to to guarantee their salaries and profits. All we can do is pay... for now. But if we hold our legislators’ toes to the fire and make them follow through with a real single-payer health system, all that will change.