Why America is Worse Off: Part 3- Medical Insurance

In this installment of my 50 part series called: Why America is Worse Off, I discuss problems with medical insurance, and insurance in general.

The core reason that we have insurance is a good idea: we all pay a little to a company so that when a rare disaster strikes that company can pay for a replacement or get things fixed. It makes sense that I should have to pay insurance for a house so that if the home burns down I don't lose all my savings, and the bank doesn't lose money on my mortgage.

The problem is when we buy insurance for things that we really should be able to pay for. A good example is medical insurance. The reason that I say this is because we all at some point will need to use medical insurance (assuming that you have it). Since we all will use the insurance the insurance company has to charge us all more than what we would normally spend so that it can make money. Also, since we use medical insurance so much companies have started to include medical insurance as a benefit for working at the job. This causes another problem because now people who do not work at a place with medical insurance must pay for their own medical insurance. And why does everyone have to have medical insurance now? Because companies have raised the prices of the medicine and the services because the insurance will cover alot of the costs and people can afford to pay more.

So now people that do not have insurance are screwed twice, once because they are not covered for major and rare problems. And again because now everything costs so much because of the way that everyone else uses insurance. To make this problem even worse is that since we use medical insurance so much it costs alot to get it, so somebody who is looking to get medical insurance outside of a job has to pay so much that sometimes it is not worth it. And then they go uninsured.

So what is the solution? Well, some people have suggested having the government provide free health care. This is a bad idea except for cases of extreme poverty or an extraordinary need. The cost to the government would be way more than what is reasonable. If we have a problem with government spending now just wait for them to pay for our medical bills. Another problem that government based health care has had is that they can not keep up with everyone. It has gotten so bad in the UK that the doctors are talking about not taking smokers, obese, or even the elderly, to lighten the workload.

No, I think the solution is to not get insurance for things that we know we are going to use. For example, it is within reason to say that at some point I will need to use my auto insurance from being in a wreck. But for State Farm to make money from me I must pay them more money than I will get back from them. This is stupid. I probably already have paid enough for another car with just my insurance checks. If I didn't have insurance then I would have enough money now to buy another car when it is needed (plus I would get interest on the money now while it is in the bank). I know that sometimes insurance is for the "other guy" and that is ok, and it is also ok to have insurance for disasters. But really we need to stop having insurance for things that we know we are going to you the insurance for. It really doesn't make sense.

...Of course when I look at a job offer one with a good benefits package is always a plus... I'm not going to turn down free (or greatly reduced) insurance. :)

Why America is Worse Off: Part 1- The Stock Market

Sometimes when I feel like posting on my blog but I don't know what to talk about I just open up a new post and start typing about the first thing that pops into my mind. That is how my last post about 50 things that make America worse off came about. Now after letting the post stew for a couple of days I think that the items that I listed would make good set of topics to post about. So I present to you the first post in a 50 part series called Why America is Worse Off.

1. The Stock Market.
I don't think that the stock market itself is a bad concept. I think that companies that need to get capital are using a viable option when they offer public stocks. I also don't think that it is bad for people to buy stocks. Personally I have a couple of mutual funds. And I bet overall mutual funds make a major component of trading in the stock markets.

The problem I have with the stock market is what happens to a publicly traded company. For the most part people that own stock in a company really don't care personally about the company, besides the fact that it will make money. If it makes burritos or party hats or burrito party hats it doesn't matter. As long as the company continues to grow at a good pace it doesn't really matter what it does. However when there are troubled waters on the horizon the ugly face of the public stocks rears it's head. And a conflict grows.

On one hand the people that run the company want to stay true to their products and their customers, on the other are the shareholders that want to make money. And when push comes to "the stock price is falling" the shareholders win. This means that the company will be forced to cut its workforce, cut corners, and cut ties with their loyal base. The product suffers, the customers who had made the company seem so promising get fed up and the devil does a little jig. The only winners are the shareholders who made the changes that would level off the stock prices enough to be able to jump ship without risk... well I guess the devil wins too, if he like to do jigs.

So what is the solution? I don't think that there is a good and simple one. I guess companies should be very careful when they go public, and shareholders should care about more things than their own bottom line. But that being said I personally would like to see my mutual funds to continue to grow, and if that means that Huffy has to switch to a cheaper brand of bolts, well so be it. I don't really care about what Huffy makes anyway.