“Insurance is designed for catastrophic events, not for low-cost events. We don’t buy Flat Tire Insurance, or Fan Belt Insurance. So why do we buy Primary Care Visit Insurance? – Don Pedro
By Ge Bai
#1. Inexpensive and frequent expenditures are not insurable because the administrative cost of processing these claims outweighs the benefits of pooling the associated risks.
#2. Hospitals and insurance companies have an incentive to acquire primary care practices to capture the profit margins generated by referred services. Once insurance coverage is off the table, many of these arrangements will be unwound. Independent physician practices will gain greater autonomy, fostering competition and expanding patient choice.
#3. Cash prices are routinely lower than insurer-negotiated prices. Price sensitivity, which has driven down prices for healthcare products and services not covered by insurance, will do the same for primary care.
Policymakers should allow catastrophic insurance coverage (low premiums) and broaden Health Savings Accounts (HSAs) eligibility and allow HSAs to receive government subsidies and tax-deductible contributions from employers, organizations, or other individuals.
