Insurance Trap

Insurance should not be mandatory for everyone. There must be avenues available for one to live without insurance.

It took two thousand plus to fix a minor dent on my wife's car - a bender fender.If we were not covered, we had never spent 2K at body shop. No one will - doesn't make any sense. When I thought about it , I found myself comparing this expense with other regular works for example , timing belt change cost around $ 300 , battery replacement is less than 80 bucks. Why - coz these are not covered by insurance.

This means the services covered by insurance are far costlier than the ones that are not covered. Uncovered services has better automation hence a bigger bang for the buck. Its easy to realize if the spender doesn't want to control the cost , there is no way cost could be reduced. Insurance companies (even if they sincerely wish) just can't keep the cost down coz the cost of maintaining an infrastructure for reducing costs itself is so costly that its mostly counter productive.

The truth , however, is, the rising costs work in favor of insurance providers as it forces more and more people to come under insurance net and hence allow companies to add to their top and bottom.

So here is the hypothesis : If most of the population is covered (by choice or by law) with insurance , the cost of services will sky rocket. This will further force more people to take insurance which will further increase the costs until the model crashes

If one test above hypothesis in health care market of US, there is no need for further proof. As larger a larger percentage of population has adopted health care coverage , the cost of health care has become so prohibitive that the richest nation in the world can't afford it. I mean why should one pay $ 300 for a simple office visit. It doesn't really matter to people who have coverage but for the ones without it , falling sick is no more an option ..