December 07, 2016
The NYT had a column by Nicholas Bagley and Austin Frakt noting the problem that in the current insurance market, all workers at a company get the same plan, regardless of their income. The price of the policy is a much larger share of a low-paid worker’s wage than a high-paid worker’s wage, implying a much larger effect on their after-health care insurance income.
As the column notes, a big part of this story is the high price of new medical technology. It is worth noting this high price is the result of government-granted patent monopolies. If the research were paid for up front by the government (it could be done by private companies under contract) the technology would be cheap in almost all cases. The differences between the cost of the most modern scanning equipment and an old-fashioned x-ray would be trivial and new drugs would be available at the same price as generics. In other words, this is to a large extent an avoidable problem, although one that cannot be easily addressed because of the power of the affected industries.
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