by Zach F

Created on: March 16, 2010   Last Updated: July 27, 2010

New Federal legislation cannot fix America’s health care problem.  The goal of expanding coverage to the uninsured, as well as lowering costs, is very difficult to achieve, especially through government programs.

Although the way insurance works is by risk pooling, this only goes so far.  By including a larger number of people in a particular pool or group of insured individuals, and using the law of averages, the idea is that the vast majority will simply require routine check ups, and occasional mild procedures or treatments.  These people, who pay in at the same rates as the seriously ill or injured, cover the costs of the procedures and treatments needed for the severely ill or injured patients.

This works in private sector insurance for several reasons.  First, the members of a particular “group” tend to, on average, have the same factors contributing to their overall health.  For instance, office workers have few environmental or occupational hazards contributing to poor health, while employees working for a manufacturing company would have more.  Thus, it is relatively easy to estimate, with a large enough group, the number and types of treatments and procedures which will be needed, and their cost.

Also a factor is that insurance companies are in constant competition.  This means that insurance companies, while trying to turn a profit, cannot charge so much for coverage that they risk losing customers to their competitors.

With the “public option” and mandate that Federal legislation would seek to impose, these two cost reducing factors are lost.  By adding the currently uninsured population to the “group” covered by insurance, the costs would almost certainly rise.  Unlike workers at a particular company, the population as a whole has no common factors determining their potential health, or the cost of providing coverage to them.

Also, the health of the currently uninsured is likely worse than that of those currently covered by private insurance.  Increasing the size of the “risk pool” by adding millions of relatively unhealthy individuals will surely add to the expense of insuring the general population.  Not only are these individuals likely to have more medical problems, there will almost certainly be an immediate surge in health care usage, and cost, as people who previously put off “optional” care, such as regular check ups, dental

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