Health Insurance is like the Soda Pop industry?

All this talk about price increases with your current health insurance and how much it will cost to pay for Obamacare got me to thinking... Health insurance is a lot like the Soda Pop industry, isn't it?

Take a walk through the refreshment aisle of your local supermarket and just look around. You will see Coke, Diet Coke, Coke Zero, Cherry Coke, Diet Cherry Coke, Coke in 8 oz. glass bottles, 16 oz. and 24 oz. plastic bottles, 12 oz cans in 12 packs and 24 packs, one liter bottles and two liter bottles. And lets not forget those awkward 8 oz. cans. Have you ever noticed how the smaller the container, the more expensive the product seems to be? And I haven't even talked about Pepsi, Mountain Dew (regular, diet and EXTREME), RC and Diet Rite, plus the ubiquitous 3 liter barrel of house brand soda for 89 cents per bottle.

Next, check out 7-Eleven. There you will find an endcap display of Coke products for $1.89 per 2 liter bottle right next to a Pepsi display for 99 cents per bottle. Turn around and look in the refrigerator case. There is a 20 oz. bottle of Pepsi for $1.59 and a 1 liter bottle for $1.69. (For those of you who are metrically challenged, 1 liter is a little more than 33 oz.) Of course, you can get a 44 oz. Super Big Gulp for around $1.39 (refills are 99 cents each.)

Now, how much do you think it costs to make these drinks? I would bet that it costs more for the packaging than it does for the water, fizz, caramel coloring, natural (and unnatural) flavoring and high fructose corn syrup (or aspartame for the diet variety.) Any way you slice it, it costs mere pennies to make this stuff and people part with a lot more money than it costs every single day and they do so quite cheerfully.

What does this have to do with health insurance? Look at the variety of types of health insurance available. My company just went through a torturous process of picking insurance and if you have not been involved in something like that, believe me when I tell you there is a mind-numbing array of choices within carriers and between carriers. What's the end result? That's right: you get health care. What's the big difference between all of those plans? Cost. Pure and simple. It is the difference between what YOU pay for out of pocket and what SOMEONE ELSE pays for out of their pocket.

I read a piece today on the web about the price of health insurance going up to cover items mandated as of September 23, 2010. Some of the comments after the article were similar to this: "You people can't stand to see a few dollars of your monthly pay go out to help children with pre-existing conditions get health care, can you?"

Well, isn't that precious? Throw out the "C" word and make everyone feel guilty. Except, now, your 25 year old daughter living at home, maybe with a child or two of her own, may have to be covered on your insurance. Who pays for that? And who wants to think that any person with pre-existing conditions shouldn't be able to have their maladies remedied? How are the greedy insurance companies going to be able pay for all of this newly mandated coverage without raising premiums?

(Funny how many of the same people that want businesses to make no profit and 'give back' to the community, somehow want their retirement fund to be invested in these very same companies and to make double digit returns each year. Sorry, Charlie, it doesn't work that way.)

For another aspect, let's look at value for a moment. Take colas. Sure, there is a difference in taste. Coke tastes different from Pepsi. Pepsi and Diet Pepsi have nothing in common, taste-wise, just like Coke and Diet Coke. I drink Diet Pepsi, but honestly, I prefer the taste of that 25 cents per can Sam's Diet Cola you get at Wal-Mart. Seriously. My point is that neither Pepsi nor Coke tastes five times better than Sam's Cola, yet we pay five times as much every day and these guys spend a pant-load of money on adverts and promotions to keep us coming back for more and guess what? It works!

When you go to the baseball game, or the concert at the big venue, you are going to pay over $4.00 for a watered down, ice-laden cup of name-brand soda. You may cringe, but you pay the money (don't get me started on their $11 beers.) Is it any better tasting? Are you any thirstier? What makes you spend the money and more important, why aren't you saving that money to pay for your health care? After all, isn't your health the most important thing to you and your children?

Health care costs are rising every year. Most doctors are making less money. Don't get me wrong. They still make decent money, but less of it than in years past. Come to think of it, the docs that do elective procedures... you know, the kind that insurance does not pay for, seem to be doing the best, AND the price for their procedures are generally trending downward.

Show me ANY person in business, from the guy that mows yards in his neighborhood to the president of Exxon Mobil, who doesn't strive for greater profitability and higher income, and I will show you a businessperson that will soon be looking for another career. Insurance company executives are no different.

"Wrap it up, OK?"

OK. Here's the moral of the story as I see it. When a consumer is presented with an array of choices, he or she will make a buying decision based upon how much they want the product and how much they are willing to spend. If it costs them next to nothing, they will likely choose the most expensive one, but not necessarily the best one. If Pepsi was free, who wouldn't stock up on it? Like sodas, there are good values and bad values in health insurance, but there are enough buyers to make all of the choices viable and you won't see a Coke executive or an Blue Cross executive worrying about where his next meal is coming from.

When it comes to health care, every consumer should have some skin in the game and NONE of it should be free to anyone. FREE HAS NO VALUE. We can do better.


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