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Medical Cost Trend - Scott Adams' Blog

Medical Cost Trend

In response to my math question from yesterday, some of you wisely pointed out that medical insurance costs have to plateau at the point where they become literally unaffordable.

This made me wonder about the trajectory of medical expenses. On one hand, you can imagine that technology will lower the cost of routine medical treatment. The cost of existing drugs will drop as they go off patent protection. And maybe gene therapy will, in time, end up being inexpensive relative to traditional medicine. One can hope.

On the other hand, scientists keep coming up with new and expensive medical procedures, and new and better drugs. For example, the surgery that gave me back my ability to speak is relatively new. So you can imagine a world where POTENTIAL medical costs rise indefinitely because science keeps coming up with ways to fix medical problems that might have otherwise gone untreated.

My prediction is that medical insurance will cover more and more procedures, but if you consider all of the things that can be covered, it will be a smaller percentage. In other words, if insurance currently covers 90% of what you might need, someday it will only cover 70%, because that’s all the public can afford. But that might represent far more medical procedures than your insurance covers today, so it might not seem so bad.

As some of you pointed out, a person’s health insurance should start out cheap when you are young, and increase every year as you age. So if you want to take a crack at yesterday’s question by altering the cost/year assumption, I’d be interested in that result.