Discuss the current system of using private insurance to pay for health care within the United States. Explain the major drawbacks to this system

Question

What will be an ideal response?

Answer 1

Part of the reason that the cost of fee-for-service health care in the United States

escalated rapidly beginning in the 1960s was the expansion of private medical

insurance programs at that time. Third-party providers began picking up large portions

of doctor and hospital bills for insured patients. With third-party fee-for-service

payment, patients pay premiums into a fund that in turn pays doctors and hospitals for

each treatment the patient receives. Critics argue that third-party fee-for-service is the

main reason for medical inflation because it gives doctors and hospitals an incentive to

increase medical services. Patients have no incentive to limit their visits to doctors or

hospitals because they have already paid their premiums and feel entitled to medical

care.