Cheap Health Insurance–Why the industry needs regulation

The notion that the market will provide efficient, quality health insurance is a figment of the same imagination that brought us gimmicky mortgages, derivatives and credit default swaps.

Some horror stories in the Seattle PI (website paper):

“We read everything, and it looked like it was really good,”

“But a year later, his wife underwent surgery and Stewart was saddled with $20,000 in medical bills. He has been quarreling since with the insurance company, which said his wife had a pre-existing condition.”

“a Bainbridge Island woman sued her insurance company, alleging that it misled her into thinking she had comprehensive coverage only to later burden her with $135,000 in bills.”

Average consumers cannot fully understand the strengths and limitations of proffered policies. Asking them to do so opens the door to all types of abuses a noted above. Policies have contingencies that people don’t fully understand. Deductibles expressed as per cent of fees sound reasonable until one is confronted with $100,000 or more in bills.

Medicynical note: We need standardized policies with equal benefit structures. Companies would compete on the quality of services, amount of deductibles and copays, and the efficiency of their administrative services.

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