On 01/01/05 18:13 ET, ErikS said...
Gary,
I agree that insurance is not free, but part of
the overall compensation for the labor contributed.
However, the amount an employee would pay for
health insuance on his/her own compared to the
amount that is paid as part of a group plan(even
with only 5-10 members) is far more money for
the same type of policy.
This may have some truth at 10 employees but not at 5 and the real savings really begins at about 50.
I do agree that an MSA is a good plan as long
as you are rarely sick. If you are single and
never sick you can save on a lot of taxes. But
if you have a family of five that goes to checkups
and immunizations every few months it doesn't
work out so great. With high deductible insurance
that goes along with it, you end up paying more
for all the small things such as office visits
and the insuance benefits don't kick in until
you have a "catastophic" thing like major surgery.
It is good that it is in a tax deductible savings
account, but bad if you ever need the money for
anything other than medical expenses because it
becomes federally taxed as income and adds on
a 15% penalty tax on top of that.
If you take the time to do the math, you may be surprised by the outcome. If you look at what an MSA is you will find it is nothing more than the common sense way most of are parents (I'm 37) handled health care cost. They paid for doctors visits and medicine out of pocket and had insurance if something serious happened.
The evidence that optional services that people
pay direct for such as LASIK is a good example
that pooled insuance is bad is not true. As with
any cutting edge technology(look at DLP projectors
in particular)when it first came out, there was
a high demand for it and it needed to pay for
its own research and development so they could
charge what they wanted to. Now that it has been
out for several years it is slowly decreasing
in price. However there are new types of lasik
machines that produce far better results than
the first and second generation machines did(average
20/15 comared to 20/30) and the doctors charge
thousands for services with newer machines campared
to the discount eye center that will charge $4-500
an eye. I have 20/10 vision and you can take
a guess as to whether I went to the discount office
or the cutting edge office that may of charged
more.
Well it looks like in the case of LASIK the market has provided a choice. Like wise in DLP projectors we have choice, I could by a $1000 infocus or a $15000 Sim2 or any thing in between. So why do things like MRIs (once a cutting edge technology) continue to go up in price? It may be becuse there is no market pressure to drive them down.
