Artificially low health care prices

Did you know that health care costs are sky-high because prices are artificially low? That doesn’t sound like it makes any sense stick with me.

You see, most people don’t pay for all their health care. Their health care is subsidized by insurance, which means they get all grabby. Here’s McCain’s health care adviser Al Hubbard explaining it:

When a third-party pays for a service or product—we consume it as if it was free…It’s interesting, if you would think about, the employers rather than providing health care insurance they provided food insurance. So every time you go to the grocery store you just take out your food insurance card, you give it to the cashier, she scans it, and you’re outta there. Pretty soon, you would start buying caviar, expensive steak, and you start buying more than you need, and also pretty soon the supermarket would discover that you really didn’t care about price, so the supermarket would remove price, because it doesn’t affect your decisions about what to buy and what not to buy. [ Quoted in Of Caviar and Chemo. ]

You get it now, right? If we had to bear our own costs of health insurance purchases, we’d choose medical procedures more carefully. Like, instead of getting the luxury surgery in the clean room by the licensed surgeon, we’d elect to have our appendix cut out with a rusty steak knife by the local barbershop intern.

Ezra Klein does an excellent job explaining the difference between a luxury service and something you have to do to keep from being disabled or seriously dead. But the “food insurance” metaphor seems way off the mark.

If “food insurance” worked the way “health insurance” did, you’d go to the grocery store, take what everyone around to told you that you must BUY OR DIE. Or it’s “grocery store policy” because of “malpractice insurance.” You would have no clue how much what you were purchasing cost or whether or not it was actually necessary. And then two months later you’d get an indecipherable bill in the mail which either tells you that you owe nothing or they’ll be auctioning your house off next Saturday.

At least that’s how my insurance works, which is why I spend so much time worrying about it. What does Al Hubbard have? I’ll take that, please.