Health Care Needs to be About the Majority, NOT the Minority

While you might think that’s an odd thought – that health care needs to be about the majority of the people and not about the minority of people – it’s a well-known fact that roughly 20 percent of those in the health care system are responsible for at least 80 percent of the costs.

Consider this! If you ran a business where about 20 percent of your clients incurred about 80 percent of the costs to run your business, you’d be increasing your prices pretty quickly to make a profit. Now apply this to health insurance companies. This is the reason health care insurance premiums continue to go up.

You’re paying the freight for the 20 percent who use the system to the hilt. This isn’t to say that the whole 20 percent over use or abuse the system, but suffice it to say they certainly spend more time using it than those in the 80 percent bracket. Of course, sometimes those in 80% bracket shift into the 20% if we’re talking major catastrophic health issues.

This economic reality – the higher insurance premiums to pay for those who over use the system – is yet another reason for the increasing numbers of uninsured Americans who don’t want to, or can’t afford to pay higher premiums. In reality, they feel it isn’t worth spending the money because they would not be using the health care system much, and they would just pay for health care as they go. Now that’s a good idea and a bad idea.

It’s a good idea to pay as you go, but only so long as the expenses aren’t that prohibitive. If you’re talking a doctor’s office visit or an x-ray or two, then that isn’t too bad. If on the other hand you are talking about a broken arm or a brain tumor, it is entirely different. Health care insurance is for those moments when you need coverage and something to fall back on.

Here is something most Americans do not understand or appreciate. Most of the health care premiums you pay (about 80%) are for the actual health care services. This means it is not about profits or administration costs. So the 20% of people who rack up the most health care costs use about 80% of the amount spent on health services. You’re paying a premium so you have protection when you move from the 80% to the 20% during a time of need.

So what is the solution to this dilemma? Some would say more preventative medicine is just what the doctor ordered — a better lifestyle, health care practices, more exercise, wiser choices and regular check-ups. Of course not everyone would chose this lifestyle, and thus the cycle begins again.

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