Here are some thoughts from 30,000 feet – as I am flying up to Sacramento for a quick trip to the State Capitol…
The real “hidden tax” in the health care arena is not this number that accounts for the costs of uninsured people who nevertheless receive health care services. Oh, that is a troubling situation to be sure, and we need to figure out a way curb the ability of those who choose not to have coverage to get services for free (“free” is code for “from other taxpayers”).
The real “hidden tax” comes from what John Graham, the Director of Health Care Studies at the Pacific Research Institute, refers to as “overinsurance.”
It is estimated that one-quarter to one-third of health care is wasted because almost nobody has the right incentives to use it wisely. Our third-party payer system takes away any incentive for patients with health care plans to be concerned with whether they “over use” their coverage. In fact, many do because there is an incentive to “get more” from their coverage.
According to Graham, this “hidden tax of overinsurance” in California is more than $6,000 per insured family, dwarfing the so-called hidden tax of underinsurance.
Only by empowering patients, as consumers in a market driven system, will we address this over-insurance problem. If we do, we will see the cost to consumers for health care insurance drop dramatically.
Don’t miss Graham’s column today – it’s the featured Golden Pen piece on the main news page!