Ominous Future of Health Care Spending

If Obama has his way, a health care reform bill will be signed into law by the end of the year.

Sadly, based on the way things look, this will greatly accelerate the costs of health care because it will do nothing to reform the system. The powerful interests groups are not going to let that happen. Special interest groups will gladly endorse new taxes on individuals and an individual insurance mandate so they can pass their bloated costs onto others.

This brings to mind anothe big lie that is going around:

1. If everyone is insured , costs will come down.

This reason this is a lie is that this only works with things that SHOULD be insured -- like low frequency, high severity, random acts of nature. It also should be pointed out that this does not lower the costs of medical treatment. It just lowers the average costs per individual paying into the healthcare / insurance system (because there are more payers).

The problem is that so much of our healthcare costs are not for low frequency high severity random acts of nature. The high costs are associated with high frequency, low severtiy, random and not-so-random acts of nature. Once one is required to buy an insurance policy, they will tap that policy to pay for these high frequency events otherwise they will feel they are wasting their money on the premiums. Costs go up like crazy.

Someone will then declare that "high demand" for medical services is driving up costs.
Go figure.