Third-Party Payers Are Driving Unaffordable Health Insurance Costs
Source: https://www.facebook.com/americanspectator/. "Health Insurance Costs Are Soaring. Here’s Why | The American Spectator | USA News and Politics." August 31, 2026. spectator.org
The Gist
The author argues that health insurance premiums keep rising much faster than inflation because insurance companies and government programs (not the actual patients) pay for and negotiate healthcare costs, removing the normal incentive for consumers to shop around for better prices. He concludes that the only real fix is to eliminate these middlemen and let consumers pay directly and choose their own care, rather than relying on government price controls, which he says lead to shortages and stagnation like in socialist countries.
Conclusion
The best way to make health insurance affordable is to remove third-party payers from the healthcare financing system and return spending control to consumers.
Premises
- Health insurance costs have grown 6-9% annually over 25 years (versus ~3% inflation), more than quadrupling consumer costs.
- Government interventions like the ACA promised affordability but instead increased costs, with subsidies merely masking the pain rather than solving the underlying problem.
- In normal markets, buyers pay directly and shop for lowest prices, creating competitive downward pressure on prices.
- In healthcare, a third party (insurer/government) pays using other people's money and sets prices, removing the consumer's incentive to economize and insurers' need to compete on price.
- Without market forces (consumer economizing, seller competition) acting as a check, prices will continue rising indefinitely, akin to Newton's First Law of motion.
- Historical examples of central price control (USSR, Venezuela, Cuba, North Korea) show that government price-fixing leads to shortages, low quality, and economic depression.
- Therefore, free market forces, not central control, are the only viable solution to curb rising costs.
Assumptions
- Removing third-party payers would not create catastrophic gaps in access to healthcare for those unable to pay directly.
- Consumers, if directly responsible for costs, would have sufficient information and expertise to make cost-effective healthcare decisions.
- The health insurance market would behave similarly to other consumer markets (e.g., electronics, retail) if third-party payment were removed.
- Employer-sponsored insurance and government subsidies are primarily responsible for insulating consumers from price signals, rather than other structural factors like administrative complexity or drug patents.
- A free market in healthcare would not itself produce monopolistic or exploitative pricing due to information asymmetries or emergency care dynamics.