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Are You Really Worse Off if You 'Lose' Your Health Insurance?

The CBO has released its estimated cost of the new GOP health care plan and the numbers are getting some bad spin from the usual suspects.

The Congressional Budget Office (CBO) on Monday projected that the number of people without health insurance would grow by 14 million in 2018 under the Republican ­ObamaCare replacement bill, with that number rising to 24 million in a decade.

The Hill described the report as a "bombshell."

The Washington Post called it "cruel."

The New York Times said Republicans were anticipating an "almost certain to be a bleak accounting" of the plan.

The implicit standard in analysis of the health insurance system is that every consumer must have government-selected coverage. But why? This chosen paradigm doesn't take into consideration the most forceful motivation of human behavior, namely, whether a large expenditure of limited resources is in one's economic interest. This standard of "universal coverage" is as artificial as the government's bloated healthcare costs.

A young person with minimal health expenses is well served not to purchase one of these government-created insurance policies: his yearly medical expenses do not exceed the cost of his premiums and deductibles. With the rate that Obamacare costs are skyrocketing, that pool isn't just confined to young people anymore. If an individual or family has to fork out tens of thousands of dollars before seeing healthcare benefits, what's the point? Why not save that money and when services are needed, pay directly to the care providers?

Perhaps there are people who do not want the available insurance policies and prefer to handle their healthcare costs in their own way that best fits their individual or family situations. We are seeing a rise in concierge medicine, internet-based medicine, and free-market surgery centers. Insurance is a hedge against future risk; a young, healthy person might chose to cover himself with a catastrophic policy and pay out of pocket for the usual cold, flu, or ear infection. This makes economic sense.

If more people chose to pay routine, non-catastrophic costs with cash then more healthcare practitioners would compete for their business: doctors and companies would innovate new solutions to earn patients' healthcare dollars.  I offer the example of two healthcare commodities that are outside the insurance world and outside government cost regulation: elective vision surgery and cosmetic procedures. Both are not covered by insurance. The cost of these two services has plummeted since being introduced to the market. There are commercials, Groupons, and "deals" constantly competing for your business.

That kind of competition is missing from our healthcare market. If you see any advertisements for products in the healthcare industry, like medicine or hospitals, there is no emphasis on "value" because the consumer isn't picking up the cost. How much is a routine office visit to your doctor? Well that all depends on who is paying for it.