Friday, January 31, 2014

A Major Reason Why Obamacare Will Fail To Lower Health Care Costs

Obamacare was passed some years ago, and recently came into effect, in hopes that it would make health care more affordable.  Myself, and millions of other Americans, are extremely skeptical that it will accomplish this goal for a whole host of reason, however, one of the major reasons why it will fail has not been addressed by many health care reformers and detractors of obamacare.

Recently I went in for a physical and elected to have a comprehensive blood work tests done.  I recently have received my claim from my health insurance plan, a high deductible HSA, in regards to what I owe.  Below is the information posted directly from my account into this blog.

Service/ProductDate(s) of ServiceAmount BilledCopayDeductibleCoinsuranceAmount Paid By Your Health PlanYour Responsibility
Blood Draw1/14/2014$30.00$0.00$0.00$0.00$2.34$0.00
Lab Test: Blood1/14/2014$51.00$0.00$9.53$0.00$0.00$9.53
Lab Test: Blood1/14/2014$65.00$0.00$0.00$0.00$14.97$0.00
Lab Test1/14/2014$169.00$0.00$0.00$0.00$15.33$0.00

Amount that was billed: $ 315
Amount paid by insurance: $ 32.64
Amount I paid: $ 9.53
Total amount paid: $ 42.17
Percentage billed paid: 13%

Now think about this for a second, the lab that tested my blood billed for over three hundred dollars worth of work yet will receive a little over a tenth of what they billed. Why? Simply put, it didn't really cost that much.  Hospitals, doctors offices and labs often are over billing because they are largely dependent on whatever the insurance company is willing to pay, and each insurance company has different metrics for each item, and so they over bill because they do not have a reliable metric to use when it comes to determine the costs of their goods.  

Now, imagine if I had to pay for this out of pocket? I would have been over paying by over two hundred and seventy dollars.  Of course there are individuals who will argue that now that everyone has insurance this means that individuals will not be overpaying for costs anymore; I believe this is wrong and that costs are only being shunted around, but that isn't the point.  The point being that for all the rhetoric over the failure of the market in regards to health data above paints a different picture.  The inability for potential patients to shop around and make informed decisions or many doctors offices to properly price their products because of an informational barrier is a huge issue, and it is an issue that obamacare does not address.

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Seattle resident whose real name is Kevin Daniels. This blog covers the following topics, libertarian philosophy, realpolitik, western culture, history and the pursuit of truth from the perspective of a libertarian traditionalist.