The resources in the following comment, posted on this here blog (on this post), will help:
Your question regarding whether insurance “covering everything under the sun” is a product of the market or mandates is a good one. There have been studies on the impact of mandates by the Council for Affordable Health Insurance. The 2010 study says:
“The Council for Affordable Health Insurance (CAHI) estimates that mandated benefits currently increase the cost of basic health coverage from a little less than 20 percent, but may be much higher, depending on the number of mandates, the benefit design and the cost of the initial premium.”
The 2009 study says that, depending on state, mandates can raise basic insurance costs up to 50% more.
Note that not all mandates are the same so their impact on overall costs will vary between different mandates and between states which do or do not include them. The total mandate count for the 2010 edition is 2,156.
Also, government interference in healthcare is not at all a new phenomenon, its been going on for decades. Over time, people get more and more conditioned to having “everything under the sun covered” but this is a result of government interference.
A classic example of government interfering with individual providers and patients is from New York, NY where State Bureaucrats Fight Doctor’s $79 Flat Fee for Uninsured. The market is not allowed to work unless it fits in with the dictates of government. There may be many more of these entrepreneurial doctors, nurses practitioners, and others but they simply dont attempt to be creative like the doctor from NY bcause of the consequences from government.
Though SimpleCare and Minuteclinics are an attempt to get more market oriented by directly providing basic services for flat fees. Third party payer system naturally tends to increase costs. What do we care what it costs if insurance is paying or mandated to pay for it?
Some additional resources if you are interested:
100 Years of US Medical Fascism (this has a good history of American medical care)
What’s Really Wrong with the Healthcare Industry (a good summary)
Government tax policies have led to greater migration from direct to third party payments, helping to disconnect the individual payer with the physician. Out of pocket health care payments have decreased from 47% in 1960 to 23% in 1980 to 13% in 2004.
He later added:
In my opinion, truly free markets in healthcare would reduce overall dependence on insurance. Minute Clinics and SimpleCare type business would grow and thrive. Business where doctors directly treat people would expand. The AMA would no longer have its power to limit the supply of doctors and high skilled nurses could become more empowered to handle a greater amount of basic care that doctors currently must do. They could own their own practice, rent, or even work as part of Walmart (just like they have prescriptions, eye care, etc). I am not pretending to know it all, I am just speculating here. But without all the regulations and excessive paperwork with both government and insurance, it would certainly reduce costs (and wasted time) along with it becoming more competitive.
If insurance is only used as a catastrophic plan, It would be pretty safe to assume that the demand for medical services outside the scope of insurance will increase dramatically, creating more of an actual market with a greater direct connection between provider and patient (no third party). I think services would greatly expand in various ways. The greater the connection there is between the patient and the doctor financially (paying and receiving) the harder it is in our general humanity to turn people away or rip them off. The real money is with the masses. Sure, insurance could only be for the rich or semi-wealthy but they are missing out on a big part of the market. i would also expect that prices for policies for catastrophic care would go down quite a bit because people are not always trying to get everything they can out of them (shots, check ups, basic tests, etc). They will need to compete more for peoples business by lowering rates or offering greater options.
Markets do so much better in everything else. It can be hard to take the emotional part out of it though, I understand. Some examples; Lasik eye surgery and cosmetic surgery both have had prices have go down considerably. I believe Lasik is down at least 30-40% from 10 years ago. Thankfully, its not covered under insurance otherwise it would be 30-40% more expensive. Similar results with cosmetic surgery. They don’t have the same regulations (yet) and are generally not covered by insurance, yet prices have gone down and quality up… hmm. Just stuff to think about.