Health Care Blues and the Free Market

I've been having some health care issues over the last couple of months. I finally went to see my doctor, who ordered a test. I guess the test was inconclusive and he ordered another one.

Today, I received a call from the insurance person at the hospital who told me my co-pay would be $700. I was driving at the time and nearly drove off the road!

"700 bucks?!" I yelled.

There was dead silence on the other end of the phone.

"Hello? How am I supposed to come up with $700 by tomorrow morning?" I asked.

The woman told me there's a "bank" affiliated with the hospital which could underwrite a loan for me, predicated on me passing whatever credit check they require. Our credit isn't the best, so I know that such a loan would require usurious rates.

"So, are you planning to keep the appointment?" the woman asked.

"I don't know," I responded. But, in fact, I did know. We don't have $700 lying around to pay for a test that I can't be completely sure is necessary for my treatment and not simply designed to protect the doctor. "I need to figure out which arm I use least so I can cut it off in hopes of getting $700."

More silence on the other end of the telephone.

I genuinely felt sorry for this woman. For people with good insurance, they pay 25 bucks and have the test done. For the poor, they go to the county hospital and pay whatever the administration decides they can afford.

But I wonder about people like us. We aren't poor by any means, but we don't have company-sponsored insurance. It's curious to think that it is the upper middle class that could be so squeezed by insurance.

The odd part is that I've been reading John Lott's Freedomnomics, which does a fairly good job defending capitalism against its many detractors, including the authors of Freakonomics.

The book is interesting and an easy read at under 200 pages. Lott tackles a wide range of examples from gasoline prices (why do they spike before hurricanes?) to drug prices (should we use price controls?) to taxes and illegal immigration.

After my discussion with the insurance person today, I wondered what Lott had to say about the insurance industry. The answer is, he didn't. Lott doesn't discuss insurance at all, which makes me wonder what his opinion would be of our two-tiered system.