The Problem: Everyone agrees the cost of healthcare has gotten out of hand. The price of healthcare has continuously gone up faster than other things we pay for. People want the best healthcare at a better price. Also, when you change jobs, no one wants to pay for COBRA coverage which is very expensive compared to what you were paying before, if you had coverage.

Questions to Consider: Why is healthcare provided by so many employers? I mean isn't food more important than healthcare? Why isn't food provided by employers? We are responsible for our own food. There is no insurance, no co-pays. I can't go to the grocery store and get $150 in food and only pay $15 at the checkout and some insurance pays for the rest. Why is this? It is because insurance is supposed to be for the unexpected expense! Insurance is defined as, "the act, system, or business of insuring property, life, one's person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved." In other words we pool our money so that IF someone in the pool incurs the unexpected expense, they draw from the pool to cover it. The assumption is not everyone will incur this expense. It does not work if EVERYONE is going to incur the expense. That would be like having insurance to pay for your groceries.

Are we just looking for insurance to cover the unexpected, like a broken arm or cancer? Or are we also looking for someone else to pay all the rest of our medical bills? If we know we are going to get a checkup at the doctor every year and it is $150, should insurance pay for that or should we just budget for it?

How did this happen?: The price of healthcare is out of hand because we are no longer the customer. Many people get their healthcare from their job. They do not shop for it themselves, it is selected for them. This is the problem and the government caused it in the first place. It started in WWII. The government had wage controls on. Companies were looking for ways to attract good workers and they could not offer them a higher wage because of the wage controls. So they started offering some healthcare benefits as a way to get around the controls. After the controls went away the idea had caught on and job provided healthcare was here to stay.

When we access healthcare through these plans today, we only have to pay about $20 and we have no idea what the cost really is because we are not the customer. (Update: I had my annual checkup on July 28 and they had me pay my $15 fee upfront before I saw the doctor. I asked the girl at the desk how much this would cost if I did not have insurance and she said, "I don't know."...that made two of us.) There is no competitive pressure on doctors or hospitals to keep costs down so the major thing insurance companies do is try to keep costs down to them so they can stay profitable. The easiest thing for them to do is pass the costs to us in a higher premium. Our health is not their main concern, staying profitable is, as it should be for any company. When companies or someone else picks our insurance company, we are not the customer and they do not have to compete for our business.

My Car Analogy: If our car insurance was handled like our health insurance, everything would be paid for by the insurance company. Tires, oil changes, gasoline, hail damage, wrecks, etc. If I only had to pay say $10 for an oil change and my insurance covered the rest, I might get an oil change every 1000 miles and get the more expensive synthetic oil. Why not? Lets say you had to pay $50 for tires and the insurance company paid the rest. I would get Michelins every 20,000 miles. Why not? How about gasoline $4 a tank and insurance pays the rest. (Kind of like a weekly prescription) I'm going on long driving vacations several times a year in a Cadillac! Why not? Carcare costs would rise and the government would be promising a solution to bring costs down. The real problem would be too many people trying to get too much for free or for below market prices and for misuse of insurance.

The Right Solution: Insurance was invented to help people pay for the unexpected expense. It can never handle paying for the expected expense. We are supposed to plan for the expected. If I know I am going to have an annual exam, I should plan to pay for it and shop around for which doctor offers the best price for an annual checkup. Doctors who are in the business of offering annual checkups would have to compete for my business. Some doctors might even offer a special to get new clients, just like the local oil change place occasionally offers oil changes for $5 to get you to come in. The cost of preventative care would drop because we would be the customer. To help the poor, the government could issue them a voucher for a certain $ amount. They could shop for the best deal and if they have money left over, they could put it in a medical savings account for other medical expenses.

If companies want to provide insurance they should put the money they are spending on each employee now, in a medical savings account for each employee. The employee would shop for whatever insurance company they wanted, just like we do for our car insurance or home insurance. They would have to compete for our business which makes us the customer. (There would be Geico-like commercials for health care) Insurance would be reserved for the unexpected expense. Then the insurance company would make available an amount to pay for it. We shop around for who we want and if we find a better deal we keep the difference, just like we do when we have the roof fixed after a hail storm. If the insurance company does not do a good job we get a different one.

• The tax code should be neutral on how we finance our health care.

• We should be able to choose the coverage we prefer.

• We should own our own insurance coverage and take it with us when we change jobs.

• There should be a wide variety of service providers to choose from.

• We should know exactly what the prices are of the services we buy.

• Innovation and convenience should be encouraged and rewarded.

• Subsidies should be targeted only at people with special financial or medical needs.

The Wrong Solution: The President wants the government to control all healthcare by controlling the price of everything and ultimately rationing who can have certain kinds of healthcare. The government sets fixed prices. All doctors and hospitals would be paid the same. They would not have to compete for our business. We would not be the customer, the government would be. Result - wherever this has been tried in the world... quality and quantity decreases while demand skyrockets. Rationing and long waits. That is always the result!

Bruce Campbell
Updated: December 21, 2011

Ronald Reagan on Socialized Medicine
The Problems With Socialized Government Healthcare - video 7/29/09
Barney Frank: Yes, a public plan will lead to a government takeover of health care - 7/27/09