Medary.com

I've thought for a while now that one of the biggest problems with health care is the concept of insurance--private or public (Medicare).

John Stossel:

America's health-care problem is not that some people lack insurance, it is that 250 million Americans do have it.

You have to understand something right from the start. We Americans got hooked on health insurance because the government did the insurance companies a favor during World War II. Wartime wage controls prohibited cash raises, so employers started giving noncash benefits like health insurance to attract workers. The tax code helped this along by treating employer-based health insurance more favorably than coverage you buy yourself. And state governments have made things worse by mandating coverage many people would never buy for themselves.

That's the root of our problem. No one wants to pay for his own medical care. "Let the insurance company pay for it." But since companies pay, they demand a say in what treatments are—and are not—permitted. Who can blame them?

Then who can blame people for feeling frustrated that they aren't in control of their medical care? Maybe we need to rethink how we pay for less-than-catastrophic illnesses so people can regain control. The system creates perverse incentives for everyone. Government mandates are good at doing things like that.

Steering people to buy lots of health insurance is bad policy. Insurance is a necessary evil. We need it to protect us from the big risks--things most of us can't afford to pay for, like a serious illness, a major car accident, or a house fire.

But insurance is a lousy way to pay for things. You premiums go not just to pay for medical care, but also for fraud, paperwork, and insurance company employee salaries. This is bad for you, and bad for doctors.

(Emphasis mine)

We need to break ourselves of the habit of paying for routine health care with insurance, and reserve insurance for catastrophic care and for serious chronic conditions.