Why I Support a Single-Payer Healthcare System

At the Second Democratic Debate, Hillary Rodham Clinton demonstrated her total ignorance at how the Insurance Industry works. In a single phrase.

I was a licensed Health Insurance Agent in the before times. Here is a build-up to an equation I worked out.

The average cost to set a broken bone in the US is $16,000.00. Let's say that one has a broken clavicle with a torn rotator complicating healing. The cost jumps to an average of $25,000.00.

So, on a couple routine injuries, we have an average of about $20,000.00 (also to make the maths easier).

And - before I get started - let me shout a huge "NO" to a statement made some time ago by Rand Paul. The Law does not require an ER to treat those without money or Insurance, as Paul asserts. It only requires the ER to diagnose them.

INSURANCE COMPANIES are financial pools. People pay premiums, pooling their money together in case somebody has medical expenses. They are gambling that, within the six months someone is paying premiums before the Insurance sets in, nobody they cover will reach the point of requiring money for medical bills.

So, let's say we have ten people in a community and a single Insurance Company. Do the maths. How much will each individual need to pay in premiums over six months for the Insurance Company reach that $20,000.00 mark, in case someone needs it. Remember, we also have Overhead and Corporate Greed involved, but Corporate Greed cancels out later, and we'll get to the Overhead in a bit.

Now, we're a Market Economy, right? Competition is good for business, right? Supply and Demand will suggest this, as it should. However, let's add another Company.

Yes, our little Insurance Company now has competition in the area. Let's say that three people go over to the competition. 

Remember, there are only ten people in the community. So now, we have seven and three. Re-do the maths for each Company, accounting for this.

If you got the same answers I did in formulating this in my Insurance days, you'll see that, when the competition came in, the Premium cost - necessarily - had to raise, not lower. This is a phenomenon that I call Market-Opposite (it happens in rare Industries, but it happens). This is my term, and I am unaware if Economists have their own. If they do, please enlighten me. 

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It follows that, if Market Opposite is the case, the greater the competition, the greater the cost. Even when there are billions of customers and many, many Companies. Therefore, a Monopoly is in order, to reduce the number of Companies splitting the consumer base.

So, I have established that Insurance requires monopolization to keep prices down. But wait! A private monopoly would have to be heavily regulated to account for Corporate Greed. How much in taxes would we need to pay for the regulators? There is also, for the Company, the Overhead. Remember that? Office buildings. Agents. Can we say Premium Raise?

And then, there is a Single Payer system. Yes, we'll have some greed among the department heads (goes with the territory - this is why it cancels out). However, if the Government goes with it, it can be handled through existing Government bureaus. They already have the offices; no need to pay Overhead on them. They already have clerks to license as Agents. It's all in place already. And why pay taxes toward the regulation in addition to paying the Overhead in Premiums, when you can just pay taxes into the Premiums directly?

This is why I believe that a Single Payer System is the most cost effective way of handling Medical Insurance. The billions of people paying into a single Government Company would keep costs down (as per our Single Company in the Maths), and the lack of Overhead would take costs even further down.

And yes, I am enough of a Socialist to think that this would work for other Market-Opposite Industries as well.

And when Hillary asserted that more Competition would help lower Insurance Costs, I facepalmed hard. Yes, Conventional Market Wisdom says that it should (and in most Industries, it does), but Financial Pools are not Conventional.