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Does insurance, as an unintended consequence, drive up the cost of goods and services

Does insurance, as an unintended consequence, drive up the cost of goods and services


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radcen

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Does insurance, as an unintended consequence, drive up the cost of goods and services?

Shoot, maybe even as an intended consequence.

Generically. Can be auto, health, whatever.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Yes insurance is a racket. Similar to gambling, some win some lose but the house always get thier cut.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

It is not an unintended consequence. It is a cost of doing business.

Companies have insurance for nearly everything, and factor it into the cost of their goods or services. The last thing a large business wants is a single incident to wipe out their business and will have insurance to cover that possibility. Employee health insurance is a different issue as it is part of employee compensation but again is factored into the COGS
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Does insurance, as an unintended consequence, drive up the cost of goods and services?

Shoot, maybe even as an intended consequence.

Generically. Can be auto, health, whatever.

Yes. But it is not unintended. Insurance is a methode of hedging against business risk and so a normal cost of doing business.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

When Insurance becomes the direct means of paying for that service, then yes absolutely... like in healthcare... healthcare Insurance isn't really a traditional insurance... it's not used as a worst case scenario protection, instead it's an every case scenario thing...
This de-incentivizes the customer to try to get a good deal... to enable competition to work in order to drive prices down. Doctors can end up charging for tons of unnecessary things and the customer won't care... because they aren't the ones paying for it.
 
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Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

The money for that insurance has to come from somewhere.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

When Insurance becomes the direct means of paying for that service, then yes absolutely... like in healthcare... healthcare Insurance isn't really a traditional insurance... it's not used as a worst case scenario protection, instead it's an every case scenario thing...
This de-incentivizes the customer to try to get a good deal... to enable competition to work in order to drive prices down. Doctors can end up charging for tons of unnecessary things and the customer won't care... because they aren't the ones paying for it.

The last thing anyone wants to do is shop around for the best deal on health care costs when their sick. I've said it before, the ACA addressed ONE problem with health care which was the access. It never addressed the outrageous costs that the actual health care providers (i.e. hospitals, dr offices, etc.) charge. Until that gets addressed WITH the cost of access we will have a doomed system.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

I answered 'sometimes' as in Medical malpractice cost passed on to patients.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

It is not an unintended consequence. It is a cost of doing business.

Companies have insurance for nearly everything, and factor it into the cost of their goods or services. The last thing a large business wants is a single incident to wipe out their business and will have insurance to cover that possibility. Employee health insurance is a different issue as it is part of employee compensation but again is factored into the COGS

I was thinking more in terms of businesses being able to raise prices "covertly", or add nice but not really needed extras, because the consumer is artificially shielded from the actual cost. For example, you need auto body work after an accident. Most consumers don't pay attention to what is done or how much is costs, all they care about is their flat-rate deductible.

Health insurance could be the same way. Does the consumer really care if a blood test is $75 or $90, or if an extra test or two is thrown in "just in case", as long as their co-pay is still $30 regardless?
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Yes, just look what Obamacare did to the industry.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

The last thing anyone wants to do is shop around for the best deal on health care costs when their sick. I've said it before, the ACA addressed ONE problem with health care which was the access. It never addressed the outrageous costs that the actual health care providers (i.e. hospitals, dr offices, etc.) charge. Until that gets addressed WITH the cost of access we will have a doomed system.

You cannot have what you want without sacrificing something... and no ACA did not address that problem... I had the ACA last year and I was so limited to where I could go and what doctor I could see. I was forced to go to the hospital and had to pay 2k for an emergency room visit... because there was no hospital nearby that took my ACA insurance.

If you do not want to use the market to drive prices down... then you'll have to sacrifice quality... but there are laws against sacrificing too much quality, so you'll have to change the laws to drive prices down.
Another way to do it is make it significantly easier and less expensive to become a doctor... which also arguably decreases quality.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

I was thinking more in terms of businesses being able to raise prices "covertly", or add nice but not really needed extras, because the consumer is artificially shielded from the actual cost. For example, you need auto body work after an accident. Most consumers don't pay attention to what is done or how much is costs, all they care about is their flat-rate deductible.

Health insurance could be the same way. Does the consumer really care if a blood test is $75 or $90, or if an extra test or two is thrown in "just in case", as long as their co-pay is still $30 regardless?

Most don't care or aren't aware of it. Healthcare is big business about big profits. Same as pharmaceuticals.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Does insurance, as an unintended consequence, drive up the cost of goods and services?

Shoot, maybe even as an intended consequence.

Generically. Can be auto, health, whatever.

No. Like any business selling a good/service they must cover their expenses and usually make a profit as well.

To say that adding a middle man is "driving up the cost" is like saying that paying a lawn service company to mow your grass is "driving up the cost" over hiring a neighborhood kid to do the job. Obviously, you would expect to pay the lawn service company more than they paid their own employee (per hour) to cut your grass. You would also expect that neighborhood kid is not charging enough to cover equipment purchase, maintenance and storage costs much less to cover taxes and insurance like the lawn service company is.

The same is true of insurance - they must collect more in premiums than they pay in benefits plus cover their own overhead.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Does insurance, as an unintended consequence, drive up the cost of goods and services?

Shoot, maybe even as an intended consequence.

Generically. Can be auto, health, whatever.

Absolutely. Look what's happened to,veterinarian costs with the advent of insurance. Dental costs same thing.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

Absolutely. Look what's happened to,veterinarian costs with the advent of insurance. Dental costs same thing.

In a similar fashion, college costs since the large scale expansion of student loans. Coincidence?
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

I was thinking more in terms of businesses being able to raise prices "covertly", or add nice but not really needed extras, because the consumer is artificially shielded from the actual cost. For example, you need auto body work after an accident. Most consumers don't pay attention to what is done or how much is costs, all they care about is their flat-rate deductible.

Health insurance could be the same way. Does the consumer really care if a blood test is $75 or $90, or if an extra test or two is thrown in "just in case", as long as their co-pay is still $30 regardless?

All cost to businesses are passed on to the consumer. Whether its insurance, higher wages, higher middleman cost etc. etc....its a fact of life and has been for thousands of years.

Believe it or not I can remember the price of gas at 25 cents a gallon and my first car cost less than $2K. My first house cost less than $15K. That same house would cost about $250K today. A job I spent 34 years at had a starting per hour wage of $2.37.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

The last thing anyone wants to do is shop around for the best deal on health care costs when their sick. I've said it before, the ACA addressed ONE problem with health care which was the access. It never addressed the outrageous costs that the actual health care providers (i.e. hospitals, dr offices, etc.) charge. Until that gets addressed WITH the cost of access we will have a doomed system.

Ive been saying that for a decade now, no one will listen
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

I was thinking more in terms of businesses being able to raise prices "covertly", or add nice but not really needed extras, because the consumer is artificially shielded from the actual cost. For example, you need auto body work after an accident. Most consumers don't pay attention to what is done or how much is costs, all they care about is their flat-rate deductible.

Health insurance could be the same way. Does the consumer really care if a blood test is $75 or $90, or if an extra test or two is thrown in "just in case", as long as their co-pay is still $30 regardless?

For that type of insurance yes it does as the consumer in those situations does not care about the cost of the product.

But in many cases the insurance companies dictate which suppliers the person can go to, with the expectation that the approved supplier is rather more cost aware and wants the repeat business. Does not apply so much in the health care industry but quite often for auto and home insurance
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

No. Like any business selling a good/service they must cover their expenses and usually make a profit as well.

To say that adding a middle man is "driving up the cost" is like saying that paying a lawn service company to mow your grass is "driving up the cost" over hiring a neighborhood kid to do the job. Obviously, you would expect to pay the lawn service company more than they paid their own employee (per hour) to cut your grass. You would also expect that neighborhood kid is not charging enough to cover equipment purchase, maintenance and storage costs much less to cover taxes and insurance like the lawn service company is.

The same is true of insurance - they must collect more in premiums than they pay in benefits plus cover their own overhead.

Actually it's more like the HOA saying you can only use thier preferred lawn service to have your lawn cut
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

It's not unintended. It's not even unexpected. Every layer of bureaucracy that you put between the service provider and the consumer raises costs because the people at that level need to get paid.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

In a similar fashion, college costs since the large scale expansion of student loans. Coincidence?

Of course not. Colleges know that the government is footing the bill so they can jack up rates as high as they want because they know that most students aren't actually funding their own education.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

The last thing anyone wants to do is shop around for the best deal on health care costs when their sick. I've said it before, the ACA addressed ONE problem with health care which was the access. It never addressed the outrageous costs that the actual health care providers (i.e. hospitals, dr offices, etc.) charge. Until that gets addressed WITH the cost of access we will have a doomed system.

A lot of those costs aren't that outrageous though, doctors and hospitals have huge expenses, especially malpractice insurance costs that might cost a doctor more than $100,000 a year in premiums, even if nothing ever happens. So long as those costs exist, they will be passed on to the consumer. If we didn't have such a ridiculously litigious society where everyone sues at the drop of a hat, those costs would be much lower. As with most things, if we killed all the lawyers, society would vastly improve.
 
Re: Does insurance, as an unintended consequence, drive up the cost of goods and serv

The last thing anyone wants to do is shop around for the best deal on health care costs when their sick. I've said it before, the ACA addressed ONE problem with health care which was the access. It never addressed the outrageous costs that the actual health care providers (i.e. hospitals, dr offices, etc.) charge. Until that gets addressed WITH the cost of access we will have a doomed system.
My personal opinion is that insurance should not be attached to peoples employer or the gov. Let individuals shop the market for products tailored to what they want and providers will create affordable policies for them

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