Make that a debate about misunderstanding

It was probably one of the more intelligent letters found in the Coeur d’Alene Press this Sunday 30 August 2009. But the author, Bob Shillingstad while very able to outline the vast price differentials of health insurance from one state to another, didn’t seem able to ask why there were such vast price differentials.  For example, any citizen in Kentucky could buy a good insurance health package for less than 1,000.  But in New Jersey, it is over 5,000.  Let us then ask why.  Can we blame insurance lobbyists for the vast difference in prices between Kentucky and New Jersey?  Can we blame state regulations on insurance that changes the pricing structure of the same insurance for different states?  How about over all health care costs?  Is Kentucky more efficient in containing health care costs as compared to New Jersey?  And therefore, insurance rates would be considered lower as a consequence?  How about the consumers?  Could they afford a pricier health insurance model as found in New Jersey in a state that is not known for being all that wealthy re Kentucky?  Let’s put it bluntly, that Mr. Shillingstad didn’t seem to have understood free market principles guiding health insurance all that well.

There are a lot of factors when it comes to the pricing structure of health insurance, or for that matter any kind of insurance.  I couldn’t begin to detail them all.  Is the area you work in heavily industrial?  What is the work based accident ratio?  What about survivor benefits?  Just how high could you expect health insurance to go  as it pertains to businesses or individuals where the aggregate types of jobs are industrial and accidents that can lead to permanent injury or death are too common?  I could imagine, that any such insurance policy could indeed reach a proportionate amount of 5,000 or more a year.  Is New Jersey more industrial based than Kentucky?  I believe so.  Just as any insurance for an industrial base in Michigan would be far higher than in Kentucky.

Try incidents of crime, or even incidents of car accidents?  What states would statistically have a higher crime rate that could lead to a higher health insurance premium?  Would say New Jersey have a higher crime rate than Kentucky?  How about auto accidents?  Would the statistical factor of auto accidents and in what way they occurred force my mother to pay over 2,000 in health insurance which is at least twice what supposedly any citizen of Kentucky has to pay?  How about general wellness factors?  Are Kentuckians more healthy as opposed to the citizens of New Jersey?  In short, a “Blue Shield” in Kentucky won’t sell the same type of insurance at the same price in New Jersey; even though it is the same company.  That ought to tell anyone opposing health care reform something.  Those much touted “free market principles” much preferred over the gvt run anything only means that people are at the mercy of those same insurance companies that decide for themselves how much you will pay, what they will cover or not and demand a measure of profit.

On what I would regard as a related “free market” argument; my sister lives in Wisconsin, Wisconsin would be considered an agricultural state.  You really can’t call her a “health nut” for buying organic since she has a mutation that produces a wheat allergy called Celiacs disease.  And her live in is has numerous food allergies.  When she came for a rare visit to North Idaho as much to visit my brother who had come up from down south for a class reunion as to visit my mother, she noted the vast differences in prices between organic foods sold in Wisconsin as opposed to Pilgrims here in Coeur d’Alene, Idaho.  In short, Wisconsin an ag state had far steeper costs in organic food production as opposed to Idaho where only portions of the state can be considered agricultural at all.  But do the same companies that produce organic foods that sell primarily to health food stores such as Pilgrims on a national level?  Then one could certainly ask, why are the prices for the same product from the same company far higher in Wisconsin than they are in Idaho?  My sister doesn’t have the options of “shopping for bargains” in other states and so must live with the fact that organic food will be far higher in Wisconsin than it is in Idaho.  Is Wisconsin a far wealthier state to Idaho that prices for food can be jacked up that much higher to that of Idaho?  Is Wisconsin not business friendly with loads of regulations on what can be considered “organic food” compared to Idaho?  How about federal regulations?  Shipping costs?  Storage costs?  Seems to me that Idaho would be much further away from any sort of central hub of shipping of any organic foods out there.  Seems to me that Idaho should have a far higher price on its organic foods than Wisconsin ought to.  Then again, how about demand.  If there is a heavier demand on organic food in Wisconsin then price increases on such food will be driven by demand.  Where demand on such food in Idaho is lower except for those people who must make such purchases because of food allergies; then prices will likely be lower too.

So, could the answer be that demand drives up the costs of insurance to the point of being unaffordable?  Could a fellow in Kentucky who is unemployed or underemployed afford a health insurance policy of under a thousand dollars any more than an average citizen of New Jersey could of a policy that costs over five thousand dollars?  Probably not.  But that doesn’t stop insurance companies from continually raising the rates of their premiums.

No Shillingstad, the “free market” will not let you have a good insurance policy for less than a thousand dollars sold in Kentucky to the citizens thereof.  Not if the insurance companies are going to craft an insurance policy to maximize profits designed for every state that they operate in.  And yes, you get that price of insurance that is sold to you in Idaho as opposed to anything sold in Kentucky.  Bargain shopping is not an option here either.

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2 Responses to “Make that a debate about misunderstanding”

  1. Big Wolf On Campus – The Geek Shall Inherit (2/3) | Geek or Unique Says:

    […] Make that a debate about misunderstanding […]

  2. exercise blog Says:

    Just always be sure to check with a doctor or an expert.

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