Wednesday, April 06, 2011

Why haven't existing medical plans held down the cost of insurance?

Paul Ryan's proposed plan to have individuals buy their own medical insurance claims to take advantage of the ability of buyers to drive better bargains when they have an interest in the negotiation. When individuals buy their own insurance, the claim goes, they will force providers to offer better medical coverage for less money.

If that's so why hasn't it already happened? Most medical plans contract with providers for the actual medical coverage. Why haven't insurance companies been able to force providers to provide more medicine for less money? Surely insurance companies have more leverage over providers than individual policy holders. If giant insurance companies can't keep the cost of medical insurance down, how can we expect individuals to do so?

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