Think Health Care Is Expensive Now? Wait Until It's Free

Recently I asked students how much it cost for a doctor visit. “My mother pays fifteen dollars,” said one.

“Fifteen dollars? I asked.

“Yeah,” he said. “That’s what she paid.”

“Okay,” I said, “But is that all it cost?” I pointed out that the average doctor visit costs between $95 and $265.

“She has insurance,” he said, “and they paid the rest. I didn’t know it cost that much.”

Many adult Americans don’t either and that’s our biggest problem with health care reform. I explained that people sometimes have a small “co-pay” and the rest comes from somewhere else. Those with insurance pay monthly premiums whether they get services or not. The poor, and people claiming to be poor, may have a small co-pay, and government uses our tax money to pay more, but it still doesn’t add up to the total cost of the visit - or the surgery, or the therapy, or whatever. To make up the deficit, providers charge patients with insurance more than the cost of their services, products or procedures - that’s why an aspirin can cost $13 at the hospital. Some doctors or dentists won’t take patients who won’t pay themselves or who don’t have insurance, because they can’t afford to make it on what government pays. Hospitals, though, have to take everyone. There’s no such thing as free health care, but more and more consider it their right.

It would be simpler if we all paid out of pocket, and that’s what 90% did before World War II when, according to economist Thomas Sowell, only about 10% of Americans had insurance. When government took over the economy during the war it imposed wage controls, so if a company wanted to woo an employee, it offered health insurance as a fringe benefit. That’s how employer-provided insurance caught on. However, many small businesses still can’t afford to offer it - especially lately. Huge, third-party government bureaucracies, and private ones too, add enormously to the cost of health care.

If we pay $95 or more out of our own pockets for doctor visits, it won’t be for frivolous reasons. We certainly wouldn’t pay $1000 for an emergency room visit unless it were a genuine emergency. However the poor, and those claiming to be poor, pay nothing for a such visits - or for an ambulance to drive them, so they’re much more likely to go for frivolous reasons like hangovers or gas pain, driving up costs enormously. Central Texas hospitals report that 82% of emergency room visits are people on “Medicaid or SCHIP.” According to the Austin American-Statesman:

Read it all here.