Letters to the Editor

Private health insurers don’t operate in free market

Private health insurers don't operate in free market

A letter last week ("Nurse supports changes in system," Oct. 19) complained that the free market system has not worked for health care, singling out insurance companies' practice of requiring "pre-authorization." My first question is, when have private health insurers operated in a free market?

Insurance premiums shoot up because Medicare and Medicaid, which account for 45 percent of all health care payments, set the rate of reimbursement to hospitals and physicians artificially low. Because hospitals and physicians cannot increase what they charge the government, they must increase their rates in the so-called "private market" to make up the difference.

Physicians barely break even under Medicare and Medicaid. Without the private market subsidy, most physicians couldn't even afford to practice medicine. Without private insurers, massive tax increases would have to be assessed on the middle class to keep Medicare and Medicaid afloat. Private insurers don't always get it right, but it is simply incorrect and naive to suggest they operate in a free market.

If the government eventually takes over health care, you might not have to get permission from an insurance company for your procedure. But under a single-payer system, you won't be able to get permission from anyone for costly end-of-life procedures or new drugs, because there won't be enough money to pay for them. The concept is called "rationing," and every government-run health care program in the world has had to resort to rationing and price fixing to control costs.

When you fix prices without having the private insurers to subsidize them, providers start to leave the system. Nobody wants to go to college, medical school, residency and then fellowship to end up earning $75,000 per year - cash poor and strapped with $300,000 in student loans. The physician shortage we are currently experiencing will get much worse, especially in rural areas.

The news program "60 Minutes" recently reported that $60 billion in payments are made by Medicare each year for fraudulent services. The enterprising thieves set up a store front, get a provider number, acquire a list of patient names and Social Security numbers and start billing government programs for $500,000 services and devices never delivered to patients. By the time the government catches on several months later, the thieves have started billing from a new location, using a different provider number.

If the government required preauthorization, it is unlikely that any of these payments would have been made. That $60 billion in wasted taxpayer money could fully finance the health care needs for America's indigent and uninsurable. But we wouldn't want to inconvenience thieves with preauthorization requirements, now would we?