How does the presence of insurance factor into healthcare? Are costs higher because it exists?


How does the presence of insurance factor into healthcare? Are costs higher because it exists?

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Yes. All healthcare would crash to low prices if people actually paid for it directly.

Insurance hides the costs form the consumer, so you end up with people demanding all manner of “healthcare” they don’t need, because they aren’t directly paying for it. And hospitals and doctors have unnecessary procedures and tests just to increase profits.

This, of course, rises costs for everyone, because you have an additional layer of profit motivation at every level, billing, insurance, deductibles, etc.

I mention this, because I just recently got a hospital bill for $158,910 for a recent stay.

With insurance, it “cost” me far less, but the charges for minor things like aspirin or a pain med was astronomical. Want a stool softener? that’s a few hundred. Want an applesauce? $600. Everything is a la cart and they won’t tell you what anything costs when it’s “ordered” for you or you ask for it. They’ll keep the costs rising endlessly.

Absolutely, for several reasons. For starters, the insurance systems means there are those who are uninsured, but laws say they have to br treated for life threatening conditions. You can’t refuse treatment to a stroke victim because they don’t have insurance. How do the hospitals recoup the costs of these uninsured patients? By charing more for the patients who do have insurance. This effectively means insured patients are also covering the bills for uninsured patients, and uninsured patients can only be treated for life-threatening conditions and not treated proactively.

Secondly, the profit the insurance industry makes, as well as their overhead costs, are expenses added to the healthcare system that don’t have to be there. The presence of an insurance industry GUARANTEES that healthcare prices are higher because of its existence.


Insurance companies profit by collecting more money from customers than they pay out for medical care. Cigna, for example, made $5.4billion in 2021. That’s $5.4billion that they collected in payments from their customers which they did NOT give to doctors or nurses or hospitals.

For-profit insurance companies exist specifically to make the healthcare system inefficient, because that inefficiency is how they get their profits.

I remember reading a report that explained why prices are more expensive due to health insurance. They did this by comparing dental costs to medical costs. Since less people have dental insurance their costs haven’t risen as dramatically. Basically what the report said is that insurance raises the pool of money so prices go up to meet the pool of money. Without insurance you are limited to what an individual can afford to pay.


Proof of this is cash-only doctors who charge much less for a visit and don’t have to have full time staff to handle insurance paperwork all day, just a receptionist. I went to one, he was fantastic, billed in 15 min increments, and charged about the same as a decent plumber.

In one town I lived in, there was a place that did lab-work that didn’t take insurance. You could get lots of oddball stuff checked, cholestrol, thyroid, testosterone, etc by just checking a box and opening your wallet.

Now there are even cash MRI places like [this]( popping up all over the country.

It definitely depends on the general healthcare system, regulation and mandates.

If everyone is required by law to be insured, the insurance companies get leverage for negotiations. And prices won’t change much and be more expensive than real cost only by profit margin.

If (part of) insurance is optional, there is less leverage and insurance will lead to generally higher costs

These are two simple examples in a reasonably regulated medical sector.

Having multiple private and public health insurance increases healthcare costs.

* The proof is that healthcare is more expensive in the US than anywhere else, by a lot
* Insurance companies take money to give to their CEOs, employees, and stockholders
* Doctor’s offices need more clerical staff in order to navigate the rules of billing insurance, which is slightly different for each insurance company. And those clerical staff need to be paid
* Patients are less likely to shop around for lower costs if they are not directly responsible for paying, so there is less competition to drive down prices
* Higher prices from the above causes decreases the amount of people who get preventative medicine, meaning more people get more expensive care for emergencies
* Insurance companies make doctors fill out prior authorizations, which takes time, and doctor time costs a lot of money
* Insurance-company-related paperwork increases physician burnout, which reduces the amount of doctors. Decreased supply leads to increased demand and higher cost