The Real Question: Why are we still paying Insurance Companies for HealthCare?
if 77% of americans want an alternative to paying insurance companies for medical care,
why is more than 77% of the televised debate time being given to industry mouthpieces that oppose it, and the screaming stooges that dont understand it?
i have yet to see a convincing argument for having insurance companies in the healthcare equation. the costs to our economy and the public health are now well known. so what is their value added?
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good question. Sometimes it helps to step back and ask the simple questions, the ones we take for granted.
"Why do we have private health insurance companies?"
I am still grasping to find an answer to that one.
August 22, 2009 5:27 PM | Reply | Permalink
i have yet to see a convincing argument for having insurance companies in the healthcare equation.
I don't know about convincing but the argument is simple enough. It is drawn from F. Hayek and can be seen in this Mises.org review of his 1944 Book The Road to Serfdom
Once you adopt this argument, which is really a faith-based belief system, every demonstration that a government program would deliver a service in a better more cost efficient way is just in the end a trick to induce you to take just one more step down the Road to Serfdom. That private insurance systems do not add value is no reason not to have them, they serve a conservative purpose all of their own.Hayek is said to have abandoned the strong form of this argument by the sixties, the proof of the success of the Social Democracies of post-war Austria and the Scandinavian countries made the Socialism=Gulag equation obsolete. But his U.S. followers are still trapped in that worldview, something that is assisted by their near complete ignorance about conditions outside U.S. borders.
Insurance companies represent the American Way. And only a DFH commie intent on leading us down the Road to Serfdom will tell you any different. Pointing to examples where governmental planning and intervention worked, say Hoover Dam, the Interstate Highway System, and Social Security only hardens the resistance. Why believe what your eyes see when you know the Devil is out and about doing his works?
In fact you can best see this in a religious context. It doesn't take any time at all to point out the deep inconsistencies between the four accounts of Jesus' Passion in Matthew, Mark, Luke, and John and between those of the conventional understanding as seen in Mel Gibson's version. The differences are not just those of perspective, the stories are totally different. None of that matters to a true believer, he knows what he knows and he does not need some snotty nosed atheist doing his reading for him.
The Health Care battle is no different, the varioius High Priests and Priestesses have given the faithful the Word and they don't want to hear any heathenish babble about "value added".
Capitalism=Freedom. So saith Rand, Hayek and Friedman. And if that Credo is good enough for Limbaugh Palin and Gingrich it is good enough for anyone.
Only a fool gets angry and frustrated that he can't convert a Fundamentalist, instead you just have to work around them. As here.
August 23, 2009 12:26 PM | Reply | Permalink
There is a good article in this Month's Atlantic pointing out something similar. We all have (or should have) car insurance, but we don't expect to use it to buy gas or for regular maintenance. We use it mostly to pay for damage we may do to someone else, but also for serious accidents.
If we have to have private health insurance, it should function the same way. It makes no sense to use an insurance model for expected expenses like routine exams and tests and preventive care. The HMO model, where you contract annually for health care and pay only small co-pays for services you actually use makes much more sense, and removes the incentive to over-treat while eliminating the need for billing. (I'm a nearly lifetime member of and reat fan of Kaiser Permanente.)
Insurance as such only makes sense for things that you don't expect to happen, like a serious disease before, say, age 75. There should be a system of routine care that is either tax-funded (single payer) or done by clinics that people would enroll in, with Medicaid for people up to the poverty line and free care for children and young people to age 25. Insurance would cover bills over a set amount per year. Wages would need to go up to cover savings and unlike the author, I'd keep Medicare for diseases and conditions that arise later in life, but with a model that is not fee-for-service to keep costs down.
Don't know if it is on-line, but it is worth a read if it is.
August 23, 2009 4:28 PM | Reply | Permalink
I was thinking the same thing. First off...I think the current approach is wrong. What should have initially been done is to start anti-trust proceedings against all of them since it is obvious that there is price fixing involved and not just between the insurance companies but between them and the hospitals as well.
The come up with legislation to set up an insurance situation akin to credit unions when in people a member/owners and they set the prices and rules.
Just a thought.
C
August 22, 2009 7:25 PM | Reply | Permalink
What you are referring to is a mutual insurance company and they were all purchased by private shareholders long ago. Why? Because they were found to be so efficient that they sometimes had so much money they returned some of it to the policy owners/shareholders. The investors thought, wouldn't it be great if WE got that money, and so they went after it, and they got it. There is not a single, true mutual insurance company in existence at this time, not one. They were made extinct.
Historical trivia: The easy pickings were the farmers mutual organizations that were created to "weather" bad weather and crop failures. They were very successful and investors went after them. But they kept the names, i.e. Farmers Insurance, State Farm, Mutual of Omaha, and etc.
August 23, 2009 2:09 AM | Reply | Permalink
Is there any reason why we couldn't start them again. Only this time make damn sure the private sector keeps their slimy, grubby hands off.
C
August 23, 2009 8:42 AM | Reply | Permalink
Ask Congress. Is that what they mean when they say co-op? I suspect they mean a modified mutual, or they would just say, "Hey! It used to be like this. It worked until special interests cut in from of the policyholder/shareholders. Let's do that again!" It seems we lack an ability to repeat the good history always awe struck by something shiny and new.
August 23, 2009 11:58 AM | Reply | Permalink
Blue Cross/Blue Sheild too. Investors bought them in insider deals that greatly underpriced good will.
August 23, 2009 4:31 PM | Reply | Permalink
I have thought for a while that an economic approach may be best. Consider the effects of a large scale cancellation of individual plans. Or what would the government do if those of us lucky enough to still have jobs submitted W-4 forms claiming 'exempt' status on income taxes.
August 23, 2009 12:43 AM | Reply | Permalink
What would happen? Those who cancelled their insurance would not have health coverage, and probably couldn't get a new policy without big penalties.
And those who marked their tax forms "Exempt" would get hounded by the IRS and if they stood firm they would go to the pokey -- where they would get free (although poor) medical care.
August 23, 2009 10:40 AM | Reply | Permalink
Thats weird, how did you respond to me before I posted my comment?
Anyway,
Yes either approach would require us to take a collective stand to effectively send a message. Something that I see as impossible given the lassitude of the vocal left.
August 24, 2009 10:03 PM | Reply | Permalink
If I was asked to participate in that poll, I would have said that I want a "public option" too. Because I think we need to do something to help cover the people who are really chronically sick but don't have insurance. So I think I would have been part of that 77%.
But that doesn't mean that I would want the public option for myself. I do not want the government running my healthcare. I would much rather keep my current private insurance company and network of doctors.
I don't think I'm the only one who thinks this way.
So I think it's not the right conclusion to draw that because 77% want a public option that we shouldn't have private insurance companies anymore.
August 23, 2009 8:18 AM | Reply | Permalink
If the government provides health insurance, that does not necessarily mean that it runs your healthcare: you pick the doctor, and the government pays. Since the government is not raking in a profit -- look at insurance executives' salaries -- you might even get better care for less.
This would essentially be a mutual insurance company that could not be taken over by private interests.
August 23, 2009 9:51 AM | Reply | Permalink
All those things you mentioned remain to be seen.
My current doctor stopped taking insurance years ago because the system got so bureaucratic.
It's not clear how much "choice" there will necessarily be under a government plan. The new government restrictions that will be placed on the private insurance companies makes me think that my current plan will change, even if I decided to keep it.
And I've seen nothing so far that shows the government plan will cost less. Everything the CBO has produced shows that costs will increase.
August 23, 2009 10:47 AM | Reply | Permalink
That is a misreading of CBOs Reports, they really don't say anything like that.
CBO's role is to measure the effect of changes first and foremost on the federal budget and in almost all cases that projection is confined to the ten year budget window. You can see this by browsing the titles of their various reports at their website:
http://www.cbo.gov/publications/bysubject.cfm?cat=0
When they do look at the long-term they still concentrate on the federal budget and mostly do not try to capture the effects on state and local budgets and to my knowledge not at all the savings to the private sector.
CBO's scoring of HR3200 showed it would cost the FEDERAL GOVERNMENT $1.042 trillion over ten years to get roughly 30 million more people insured. It also showed that in doing so there would be $219 billion in net savings mostly to Medicaid. What they didn't score was the savings to hospitals in the form of charitable care and or care billed that would have been written on in bankruptcy. And there will be billions maybe totaling into 100s of billions in savings in other cost shifts for uncompensated care that currently gets charged one way or another to people with insurance. None of that gets captured in CBO scoring.
Elmendorf's testimony was not given in a way that was helpful and was subsequently distorted in a way that simply begs for a more precise definition of "costs would increase". But in any event no one out there really claimed that covering 16% of the population that was uninsured would be cost-free, only that it would be budget-neutral, a much different animal. By some calculations the ten year cost of HR3200 actually produces a $6 billion 10-year surplus (you can Google it) because of the odd way CBO runs their numbers.
August 23, 2009 12:59 PM | Reply | Permalink
Really, no one said it would be cost free? I guess I heard Obama say "revenue neutral" alot. But I guess he didn't mean it?
Those other savings you speak about sound nice but I'm not sure they're realistic.
PS - does your 16% of the population include people that are in between jobs plus other people who can afford insurance but choose not to get it??
August 23, 2009 3:59 PM | Reply | Permalink
The industry pay for 100% of the large dollar amount spent on the media for advertising their money machine. We the public that are abused spend 0% with the media.
Who do you think the Media will support?
A business will always support their cash flow!
It is a conflict of interest by the media.
August 23, 2009 10:02 AM | Reply | Permalink
Why? The systems is rigged:
http://www.nytimes.com/2009/08/23/health/policy/23daschle.html?hp
August 23, 2009 10:56 AM | Reply | Permalink
Insurance is a good way to finance irregular large expenses. There was a time not too long ago when health care consisted of occasional inexpensive treatments and rare large expenses. At that time, insurance was a great way to finance health care--and so our insurance-based system made a great deal of sense and worked quite well. In the 1960s health care insurance companies like Blue Cross Blue Shield (that basically covered everything for a low premium) had sterling reputations. Today, however, large health care expenses are no longer irregular occurrences but almost predictable events in everyone's life, particularly as one gets older. Insurance works well when the odds of any particular insured individual having a large claim are small. Once those odds become high, insurance starts to fail.
August 23, 2009 1:09 PM | Reply | Permalink
They are predictable but they are also deniable in the sense that most people prefer to assume that it can't happen to me. So savings is also a poor answer because young people won't do it and even if they do they can't do it soon enough to pay for it if it happens to them in their 20's which does a lot more often than they believe. Taxing for healthcare makes as much sense as taxing for defense. Only, I believe I'm a lot more likely to need that knee replacement or triple bypass than I am that aircraft carrier.
August 23, 2009 2:01 PM | Reply | Permalink
Very true Bluebell. Savings- and insurance-based approaches have their use, maybe, but ultimately we need a "social insurance" system that allows money to raised from those who have it and distributed to those who need it.
August 23, 2009 2:41 PM | Reply | Permalink