Imagine a pharmaceutical company comes out with a pill... a WONDERFUL pill "Xyz" that is GUARANTEED to extend life by 1 month with no side-effects that works on kids as well as adults. For every 1 of the these pills that are taken, 1 month is added to your life expectancy guaranteed. Doesn't matter if you have cancer, in a coma, suffering from a horrible infection, stroke, or you are completely healthy. One month added to your life expectancy for every 1 pill you take.
Catch is, this pill is very expensive. For ONE person, it is $5,000 per pill or $150,0000 per month or $1.8 million per year.In this hypothetical situation, should patients pay out-of-pocket for this treatment? Than only the rich will be able to afford such expensive treatment.
Should insurance pay for this treatment? Well, given the high cost, the insurance companies will raise premiums in order to afford to pay for this treatment... otherwise go into bankruptcy. With increase in premiums, more and more people as well as companies will not be able to afford health insurance.
In response, in order to make health insurance more affordable, insurance companies have increased deductibles as well as included riders that exclude the Xyz pill coverage.
• Increase in premiums
• Inability to pay for health insurance premiums
• Increase in deductibles
• Exclusion riders
All as a response to an increased cost of providing healthcare (via this wonderful "Xyz" pill).
Should the government pay for this treatment? The population in the United States is 312 million currently. The cost to government will be $562 million per year to provide treatment for every individual for one year. Given everybody theoretically could live forever while taking Xyz pill... nobody will die which means the population will increase. With population increase, the United States will eventually go into bankruptcy it it continues to provide treatment for everybody.
As such to prevent government bankruptcy, Congress passes a variety of laws that include cutting medicare/medicaid benefits, raising the United States debt ceiling, cutting back on education/military spending, increasing taxes, etc.
This story sound familiar?
That's because it is... though not because of the existence of the Xyz pill. But "expensive" healthcare exists due to new pills, new tests, new surgeries that keep coming out which are more expensive than prior healthcare interventions.
The insurance and government's responses are the same in real life as to the fictional response to the hypothetical Xyz pill.
So what's the answer???
I don't have one that will make everybody happy... Read more about the healthcare dilemma.