Health insurance in America is completely different from any other insurance industry. This makes American health insurance one of the most difficult things for the average person to navigate. To understand health insurance in this country, you need to look into the root of the industry, and see how we got here. Only then can you truly know what that means for you.
The Beginning
Almost a century ago, health insurance existed in a similar manner to other forms of insurance. You would pay a small premium, and in case there was a major medical catastrophe, the insurance would pay out for your medical bills. Routine visits to the doctor, however, were simply handled as a transaction between doctor and patient. Health insurance wouldn’t get involved any more than auto insurance does when you go to the mechanic. However, in 1929, when the stock market crashed, a doctor named Justin Ford Kimble devised a plan to help poor patients get to the hospital, charging 50 cents for 21 days of care in his hospital–and health insurance was born.
Rapid Expansion
Early participation in health insurance wasn’t too extensive, but in the 1940s, private health insurance exploded, largely correlated to increases in wealth in post-war America. Directors of various hospitals were starting to realize the benefit of private health insurance; if they could remove the actual payment from the moment the patient needs care, they could charge more through insurance, and make more money. After all, no patient can afford to say no or shop around at hospitals when they need immediate care. More and more people got on board with the idea of health insurance, and by the 1950s, almost anyone with adequate means had it.
Bargaining
Once big health insurance companies had a near monopoly on providing coverage for patients, they started approaching hospitals for discounts. Since they were providing large majorities of the patients for their local hospitals, they argued that they should be due a bulk discount. Hospitals couldn’t actually afford the overhead when giving these discounts, so instead, they raised the price of services, and then charged the insurance companies fractions of the new price. The hospital made enough money from services, and the insurance companies got a discount.
What This Means for You
Individuals like you simply don’t have the bargaining power to demand the sorts of discounts that insurance companies do. This means that if you go to the doctor without insurance, you will be hit with a bill that is much larger than the actual cost of your services. In order to get the fair cost for the healthcare you need, it is vital that you have health insurance. Fortunately, more and more high-quality, local insurance companies are rising to compete with the bigger companies that created this situation. In St. Augustine, try local insurance companies before turning to one of the statewide organizations.
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