Are We Confusing Health Insurance with Healthcare, And How Do We Fix It?

A recent article in the Wall Street Journal highlighted what many Rhode Islanders already know firsthand: healthcare costs continue to rise, putting pressure on families, employers, and taxpayers alike.

Premiums go up. Deductibles climb. Employers struggle to maintain coverage.

Too many people delay care because they don’t know what it will cost or whether they can afford it.

After reading the article, a constituent who works as a health insurance broker asked me a simple but revealing question: Why do we insure our health at all?

That question gets to the core of the problem.

The Problem: We’ve Blurred Two Very Different Things

Healthcare and health insurance are not the same, but we’ve spent decades treating them as if they are.

Healthcare is the care itself: doctors, nurses, hospitals, medications, prevention, diagnosis, and treatment.

Health insurance is a financial tool.

It was designed to protect against rare, catastrophic events, not to sit between patients and every routine interaction with the healthcare system.

Just like insurance on your home, health insurance makes sense when risk is unpredictable.

Healthcare, however, is something everyone uses regularly and predictably over the course of their lives.

When we route everyday care through insurance, complexity explodes.

Multiple insurers. Endless billing codes. Prior authorizations. Appeals. Compliance requirements.

Entire industries now exist to navigate the system rather than deliver care, and rising costs aren’t accidental.

They’re the predictable result of a system that rewards complexity, paperwork, and volume, not simplicity, transparency, or outcomes.

At this point, it’s important to be clear about what this argument is not.

This is not a call for single-payer healthcare or a government-run system.

We’ve already tried large, centralized fixes, including the Affordable Care Act as it ultimately took shape.

Those efforts expanded coverage but failed to control costs or reduce disruption. Premiums rose, deductibles increased, and the system became even more complex.

Questioning the role of insurance doesn’t mean replacing it with another top-down model. It means being honest about what isn’t working.

And here’s another reality: we already pay for healthcare as taxpayers.

Medicare, Medicaid, veterans’ care, public employee plans and emergency rooms providing uncompensated care when people delay treatment.

Public dollars are already deeply embedded in the system, often paying the highest costs after problems become crises.

So the real problem isn’t whether taxpayers are involved.

It’s whether the system encourages affordability, transparency, and early care or whether it pushes costs higher for everyone.

The Solution: Fix Incentives Without Blowing Up the System

There isn’t one silver bullet, but there is a practical path forward that doesn’t require a grand redesign or ideological overhaul.

First, treat routine care like a service, not an insurance claim.
Insurance should protect against catastrophic risk. Routine care should be priced upfront, easy to access, and straightforward to pay for. When insurance is removed from everyday transactions, price discipline returns.

Second, enforce real price transparency.
Patients should know what care costs before they receive it. Transparent pricing allows comparison, competition, and accountability without government setting prices or micromanaging care.

Third, restore competition and portability.
Healthcare works best when patients and providers have choices. Coverage should be portable, flexible, and not tied to navigating layers of bureaucracy that penalize workers and small businesses.

Fourth, pay for outcomes not volume or paperwork.
The system should reward prevention, early intervention, and keeping people healthy, instead of incentivizing more procedures and more billing.

Finally, use public dollars more strategically.
Taxpayer money should support early care and cost-effective models, not simply absorb the most expensive failures after the fact. That’s not more spending; it’s smarter spending.

The Bottom Line

This isn’t about ideology. It’s not about attacking insurers, doctors, hospitals, or public programs.

It’s about asking whether the system we’ve built actually serves patients, families, employers, and taxpayers.

If our goal is better health outcomes and lower costs, we need to stop confusing the financial mechanism with the public good.

Insurance should protect against risk, not dominate the system. Healthcare should be accessible, transparent, and affordable.

That distinction matters, and getting it right is one of the most important challenges we face.