• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • John Stossel Takes On The Health Insurance Industry

    Car insurance doesn’t pay to fill up your gas tank, why does health insurance pay for your flu shot? ABC’s John Stossel explores how third-party payments are driving up are nation’s health care costs:


    Obamacare would only make the status quo worse. Heritage scholars Bob Moffit and Nina Owcharenko explained how when Obama first unveiled his plan last year:

    The current structure of third-party payments—which Senator Obama wants to pre­serve—creates serious problems in the delivery of care. In this system, insurers and medical profes­sionals have little direct accountability to individu­als, either as consumers of insurance or as patients. The existing financial and insurance arrangements compromise both the interests of consumers who demand health insurance that meets their individual needs and the interests of patients who demand the best and highest value of medical services. Insurance may encourage either too much or too little of cer­tain types of care. As many prominent economists have suggested, the best policy response to that problem is to restructure the market to align the incentives of insurers, doctors, hospitals, and patients to ensure the delivery of value to patients.

    The better policy approach is consumer driven health care. Heritage scholar Ed Haislmaier detailed six key principles of reform that will bring sanity to our nation’s health care system:

    1. Individuals are the key decision makers in the health care system. This would be a major departure from conventional third-party pay­ment arrangements that dominate today’s health care financing in both the public and the private sectors. In a normal market based on personal choice and free-market competition, consumers drive the system.
    2. Individuals buy and own their own health insurance coverage. In a normal market, when individuals exchange money for a good or service, they acquire a property right in that good or ser­vice, but in today’s system, individuals and families rarely have property rights in their health insur­ance coverage. The policy is owned and controlled by a third party, either their employers or govern­ment officials. In a reformed system, individuals would own their health insurance, just as they own virtually every other type of insurance in virtually every other sector of the economy.
    3. Individuals choose their own health insur­ance coverage. Individuals, not employers or government officials, would choose the health care coverage and level of coverage that they think best. In a normal market, the primacy of consumer choice is the rule, not the exception.
    4. Individuals have a wide range of coverage choices. Suppliers of medical goods and ser­vices, including health plans, could freely enter and exit the health care market.
    5. Prices are transparent. As in a normal market, individuals as consumers would actually know the prices of the health insurance plan or the medical goods and services that they are buying. This would help them to compare the value that they receive for their money.
    6. Individuals have the periodic opportunity to change health coverage. In a consumer-driven health insurance market, individuals would have the ability to pick a new health plan on predict­able terms. They would not be locked into past decisions and deprived of the opportunity to make future choices.
    Posted in Obamacare [slideshow_deploy]

    33 Responses to John Stossel Takes On The Health Insurance Industry

    1. Roger D says:

      I wonder what kind of health ins. ABC’s John Stossel has. He didn't say.

    2. Keziah NJ says:

      Roger D who cares what insurance Stossels has?! Is that the only thing you can say in response to his article? I guess when you have no facts to back you point of view that is what you do.

    3. chucknfw says:

      It doesn't matter what John Stossel has for insurance. He is very eloquently and effectively reporting some of the major problems with the health care system. The report illustrates how the hmo style insurance system or a government controlled option are very inefficient and will lead to diminished care and increased costs. Well done John.

    4. Bobbie Jay says:

      I'm sure it's not government insurance.

      Thank you, John Stossel and Heritage.

      More people need to open their eyes and realize this is what the government intends no matter how they wrap it. It is a threat to our individual rights, liberties, freedoms and choices.

      Now what does this say EVERYONE, about the leaders of America! They went out of their jurisdiction to the people they serve, to steal our values, our principles, our livelihoods. They are corrupt and dangerous as we've come to know this administration to be.

    5. anonymous, Texas says:

      ABC’s John Stossel explores how third-party payments are driving up ["are"] nation’s health care costs:

    6. Pingback: John Stossel Takes On The Health Insurance Industry » The Foundry | Fitness Tips

    7. Pingback: » Financial News Update - 09/02/09 NoisyRoom.net: Where liberty dwells, there is my country…

    8. Bob, Portland, OR says:

      John makes some good points. We still do have the best system in the world but it could use some improvements.

      But not what Mr. Obama and his friends want.

    9. Ben Franklin, IN says:

      Rule of Thumb: follow the money. When someone buys something, they get to say how that something is used. Not only do we not buy our own health care (the insurance agency does), we don't even buy our own insurance (our employer does)… no wonder the system is out of whack.

    10. Van says:

      One question comes to mind. Why doesn't the Obama administration have journalists like Stoussel giving his own input on healthcare to help craft legislation instead of bringing in left wings cooks and socialists? Taking the profit out of healthcare (socialism) will lead this country into government run 3rd world healthcare in the end. Look at the Post Office, they are going broke. Look at Medicare, Medicaid and even Social Security. What makes anyone think it will be different with government run healthcare?

    11. Dub from Celina, Tex says:

      I also wonder what insurance Stossel has and how much he pays for it. The factor missing is "Where is the Tort

      Reform" limiting the trial lawyers free to do their damage.

      My doctors malpractice insurance is in the $l00 thousands and being afraid they will be sued by these Trail Lawyers, they ordered all the studies to protect themselves.

      Tort reforms would do a great deal in reducing costs to see your personal physician.

      Also, lets not negate our Rights as US

      citizens to deal protect our personal Rights. Follow the US Constitution and Bill of Rights and not Government intervention into those rights.

    12. Screw You says:

      Reagan’s legacy of Bankrupt GOP policies that destroyed the US !!! From Wikapedia

      The policies were derided by some as "Trickle-down economics,"[16] due to the significant cuts in the upper tax brackets. There was a massive increase in Cold War related defense spending that caused large budget deficits,[17] the U.S. trade deficit expansion,[17] and contributed to the Savings and Loan crisis,[18] In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion,[19] and the United States moved from being the world's largest international creditor to the world's largest debtor nation.[20] Reagan described the new debt as the "greatest disappointment" of his presidency.[19]

    13. G W Gump says:

      The policies were derided by some as "Trickle-down economics,"[16] due to the significant cuts in the upper tax brackets. There was a massive increase in Cold War related defense spending that caused large budget deficits,[17] the U.S. trade deficit expansion,[17] and contributed to the Savings and Loan crisis,[18] In order to cover new federal budget deficits, the United States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion,[19] and the United States moved from being the world's largest international creditor to the world's largest debtor nation.[20] Reagan described the new debt as the "greatest disappointment" of his presidency.[19]

    14. Dave, Bayfield, CO says:

      Stossel pretty much sums up the "Entitlement" we Americans have been taught to expect from health care. Good job.

    15. Dale, Cincinnati says:

      The present system was negotiated by organized labor. It moved out-of-pocket "living" expenses from the rank and file union members to the insurance policies (benefit packages) effectively providing and untaxed benefit that made normally non-deductable expenses now deductable. Businesses liked it because it reduced their payroll tax burden as well. For the most part insurance companies are acting as personal accounts payable clerks passing on the cost to the consumer. Unfortunately, it is now almost impossible for a small business owner to purchase a non-PPO type policy.

    16. Mimi, Corrales, NM says:

      John makes so much sense. Everyone should have a high-deductible health insurance policy and a Health Savings Account. That's what I have and I'm extremely careful of what I spend. No running to the emergency room for every little problem. Preventative care is covered 100%, but my policy costs less than $200 a month and premiums have not risen in 3 years.

      Of course, HSA's are on the chopping block by Obama and Congress even though they meet all of the goals stated as necessary. They just don't meet their unspoken, underlying goal of control of our lives.

    17. Mike in Missouri says:

      Stossel rocks!

      He is a Libertarian and is loathed by most inside the ABC News organization. However, he always shines the light of common sense on every issue he covers. Thanks John!

      Great reference point Heritage. Keep up the good work!

    18. ronaldo, Vermont says:

      Public education, health care and the home mortgage crisis all are "three-party" systems…And all lack direct accountability.

      Third parties simply complicate things… and raise costs.

      Accountability is unclear. Costs go up and service goes down.

      Teachers are not paid directly by parents. They answer to their union which in turn deals with government boards for pay and benefits. Parents are unable to hold teachers directly accountable.

      Doctors and hospitals use a third-party (insurance)to pay which in turn, charges businesses.Whether it's government, an insurance company or business, direct accountability is lost. in the shuffle. Patients have little incentive to "consume" carefully or providers to provide prompt service.

      Without direct accountability, the way is clear for all sorts of shenanigans.

      Insurance providers can and do press politicians to enact laws that protect their profits and enlarge their markets. Unions can and do use clout to force contracts with overly generous benefits. Corporate honchos can and do use excess profits to pay themselves huge bonuses. In every case, the consequences are the same: less choice, more cost, less service.

      History and common sense tell us that any constructive reform to three-party systems must first address the accountability problem. The first priority:reduce complexity.

      Yet President Obama's 1,000 page monster would steer us in exactly the opposite direction.

    19. G W Pyle says:

      GOP are fake conservatives. Reagan + Bush = Bankrupt US !!!!

      With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.

      It’s the biggest increase under any president in U.S history.

      On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That’s a 71.9 percent increase on Mr. Bush’s watch.

    20. Marsh says:

      Heritage can see the Ball!

    21. ronaldo, Vermont says:

      Point #2:

      Years ago, I tried to find out how much an EKG would cost. The hospital couldn't tell me. apparently, there's a monthly CD that hospitals subscribe to that lists "estimated" rates for all procedures.

      This databse could (should) be put on the internet. Then, force (Obama is surely good at THAT) hospitals to publish their rates online likewise.

      Point #3: Obama doesn't discuss that the "everybody get insurance" means that his YOUNG supporters will have to PAY something for their insurance.

      That would hurt him politically.

    22. paul anderson reddin says:

      As well as shifting toward "consumer driven" insurance there is a need to tie health care costs, not just premiums, more directly to the consumer. Instead of fixed dollar deductibles, what about differing percentages of coverage? Instead of $10 or $20 deductibles have a choice of 1%, 2% deductible of total costs, so all expenses, from the smallest to the largest would impact the customer more directly. Self interest is always the best driver to competition. If we can find $1000 for emergency car repairs we can just as well find $1000 to repair our own bodies when we need a $100,000 operation.

      And instead of the horrendous current process of negotiating health coverage in advance through programs such as Medicaid for those who cannot afford coverage, replace todays approach with a methodology to apply for assistance after the fact for those truly in need. This would get us past the problem with those in need who do not apply, the changing circumstances of people who are in and out of the system that cause so much unnecessary paperwork, and would give health care providers reasonable assurance of getting paid one way or the other.

    23. Tim Az says:

      Can't we call this government run health care what it is HEALTH CONTROL. Anything offered by the left under the guise of health care can safley be refered to as Health Control. And as far as trickle down economics goes it was hugely successful unless you were a welfare redipient. Now we are trying Mao-Bama's trickle up poverty. HOw's that hope and change working out for you?

    24. Lynn B. DeSpain says:

      I was born and raised an American. I was raised with the values that you pay for you and yours. That to accept Welfare in any form war the last choice before death and only done to save the children. Charity was not a handout but a payment due down the road for another in need when their time came.

      I was raised that once you ever took anything from the Government, the Government owned you from that day forward. That was that payment. I was raised and taught that all lawyer were liars, because they could argue both sides of the argument with the same effect! I was taught that those who can do, do. Those who cannot do, teach. Those who cannot teach, teach teachers. Those who cannot teach teaches, administrate. Those who cannot administrate, legislate. As for lawyers, the better the liar, the higher the position! And in all cases, the Government is never there to help you! Just ask an Indian.


    25. Ben C, Ann Arbor says:

      The article G W Gump cites is so far left it might even come full circle. Finding the truth is always a challenge and certainly "just because it is in print" doesn't make it valid. The Reagan / Bush bashing article fails to portray the complete picture and all the consequence of their policies – both good and bad. It is articles like the one referenced that fueled the fires for the Obama campaign. Now that "conservatives" are voicing their concerns loudly in public forums the "left" is falling back on their Frankfurt School of thinking. Interesting.

    26. Bob Raemore, Indiana says:

      One of the real problems with this brand of "Health Care" is that it does not provide for adequate compensation for hospitals and doctors. Since these loons are basicially anticapitalists, they cannot conceive that hospitals and doctors acutally have to make some kind of a profit to continue to bring foreward the ever increasing technology to treat their patients. When hospitals cannot afford to buy new equiptment because of no profit, the companies who supply this equiptment will not be able to afford providing this equiptment and completing the technological research for better treatment, all advances in better care will cease.

      We all want the best but to do so we will have to pay for it….PERIOD….

    27. Jim - Utah says:

      RE: G W Pyle — Not sure whether you are trying to incite, or you really believe all you are saying, in either case, it is wrong. A little thing happened early in President Bush's first term, America was attacked. Why was this? For one thing, our defenses were gutted by Clinton. When we did have to respond, we had to build back up what was gutted at great cost in new dollars. Isn't it time we stop all this and abide with one of our Federal Government's limited items in the Constitution, and provide for a national defense? Yes, that means the United States standing tall, even with a chip on her shoulders, if necessary. Only a fool will try to attack a superior defensive force. Whether you like it or not, you need to take a hard look at the person running this country now and ask yourself, "Am I living in the greatest country on earth"? If the answer at this time is no, we need to take steps to get back to that answer – whatever it takes.

    28. Lynn B. DeSpain says:

      Anyone of reasonable intelligence can tell that cash is always less than insurance or credit and certainly far less that any form of Government pay, because of built in reduction cost's additions!

      Any fool who still believes in any of Obama's programs, or promises, is just that, a fool.


    29. Pingback: Retail Politics - Blog Watch

    30. Pingback: Intertubes Roundup: Commie Truther edition | PAWaterCooler.com

    31. KO says:

      Just read Lynn B. DeSpain. He hits the nail on the head everytime. Stand up now and stop the looming socialists and Marxists from taking over our country. It is happening right before our eyes. Better stop it now.

    32. lora marek wisconsin says:

      Where will this all end ? It seems a day does not past that americans are not having something force down our throats. HR 3200 , Card check, and the list gets bigger and more frighting every day. His latest plan to address our school childen is right out of the Saul Alinski play book. Next he will have them spent the summmers in Youth camps , which has already been tried on a small scale but I think that was a sample of what is yet to come.

    33. KC, Michigan says:

      This did not address any of the real problems with the health care system in America. The new health care bill will ensure everyone gets coverage. John was only talking about those who already have insurance. If those who don't have insurance can stop going to the emergency room for common problems because they now have coverage then that's a plus and our rates will come down. Think about it people don't just let talking heads give you sound bites to repeat!

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.