What Startups Need To Know About Health Insurance in 2013

Canada is indeed undergoing a debate on how to fund and deliver health care, but what is not under debate is whether it should it be kept public. It is also worth noting that the current government slashed taxes upon taking power and is now trying to cover the deficit by reducing social services. In this way it is a classic right-wing "starve the beast" tactic, wherein you take in less money and then say "Hey we can't afford these things anymore so we have to cut them" even though you could have paid for them without the tax cuts.

Most of the things the article talks about amount to adding efficiency to the public system, something that no one would protest. Nowhere in the article does it talk about the public system collapsing and serious discussion over switching to a private system. As far as public debt goes, Canada's debt is not great, but it is certainly nowhere near most other Western nations, so the whole "public health care is a recipe for inordinate amounts of public debt" doesn't seem to be true either.

Start-up with kids and no spouse providing health insurance is basically a no go. My friend had a baby last year, and they had a few month health insurance gap between graduating school and their starting their jobs. In the meantime, the baby fell off the changing table, and they faced the choice of either hoping he was fine, or going to the emergency room and paying thousands of dollars just to check for a concussion.

Issues with private health care:

1) Private health insurers haven't been able to run anything efficiently as long as I've been alive. My premiums go up by double digit percentages every year because "costs" keep increasing, but at the same time, insurers' profits go up by double digit percentages every year. It seems like this is simply a money transfer to health care executives.

2) The more private companies run our lives (especially something like healthcare), the more they will be able to dictate our choices (what we eat, risky behavior etc). Oh wait... corporations already do dictate what we eat, what sort of medicine we use, where we work, how we communicate, how we move around, what we wear...The only difference between corporate control and government control is that we actually have some say in how the government controls us because at the end of the day we control the government.

3) I haven't seen on person that supports privated health care tell me the downside. I know they exist and we need to know the risks and talk about them openly before we stick with such a horrible system.

But anyways, the downsides to public health care: cafeteria health care (i.e., standardized treatments) which is good for most patients but not for the few who have nonstandard variations of ailments; higher taxes; less personalized care as a consequence of standardized treatments; potentially reduced choice of health care provider(s) (but if the entire system is UHC this may not be the case); potentially longer waits for medical treatment that cannot be handled in a day (i.e., anything that cannot be handled outpatient or by nurses or nurse practitioners).

And the downsides to private health care: all of the above, plus: risk of claim denial for valid claims (though admittedly less of a risk now as a consequence of numerous state and federal laws cracking down on claim denials); double-digit increases in premiums every year despite no corresponding increase in costs (this is actually happening, and has been happening, every year for the past decade); reduced choice of health care providers (which is actually the case now, i.e., in-network vs. out-of-network); ruinous medical bills; unnecessary tests and treatments; private health information being shared with "business partners"; inadequate medical facilities as a result of lack of capital investment due to premiums being redirected to marketing or executive retention.

It turns out the downsides of a private health care system outweigh the downsides of a public health care system, since you have all of the same downsides but the additional downsides that come with a profit-seeking business. And as history has amptly demonstrated, cost-cutting is not one of the benefits of a private health care system (costs are cut in a way that benefits the insurer's profits, but in ways which are detrimental to the insured).

I would recommend Kaiser coverage to anyone thinking about switching from one of those plans with big increases. Their doctors don't get extra money for performing extra procedures as is the case in a lot of plans, so there is more incentive to just do what's necessary.

I far prefer the Singapore model to Canada's. Have you informed yourself of the variety of different public healthcare models out there? UK and Canada seem to have issues with very long wait times and bad options for private care for niche conditions (private care was illegal in Canada not too long ago)

Singapore has good health outcomes, low health expenditure, and a high quality of care. They use a forced-savings model with a public backstop, giving consumers market incentive to conserve healthcare and keep costs down (unlike the US all-you-can-eat model). It's very effective and not too far from our current system for political feasibility.

There are economists who have been studying the problems and benefits of various universal public healthcare for years. Are you aware of their arguments?