Insurers Will Sell Plans to All Comers — If Everyone Must Buy In
Comments on http://blogs.wsj.com/health/2008/11/20/insurers-will-sell-plans-to-all-comers-if-they-everyone-must-buy-in/trackback/
Of course they will sell plans to everyone if everyone must buy it. Wouldn't every industry like it to illegal NOT to buy their product? How about fixing the auto industry by mandating that everyone must be a new car? Let's boost the building industry: everyone must buy a new house!
Hey, let's go the whole hog, let's make it illegal to be sick. Then we wont need Health Insurance. Better still let's make it illegal to be poor. Doesn't that solve all our problems?
It's time that we realized that Health Insurance companies are not the solution. They are the problem.
No one needs health insurance. I'm not trying to dis the 40+ million people without health insurance. Of course they would be better off if they had health insurance. They'd also be better off if they were given a million dollars. In fact, then they could buy health Iinsurance. No doubt the Health Insurance companies would be delighted to take their million dollars. The problem isn't that the 40 million people lack health insurance; it is that they can't afford to pay for health insurance; or wont pay the charge for what they are would get. Given whatever money they have; they choose to spend it on something else. Perhaps food. Of course, the health insurance companies would like to mandate they any money they have comes to them.
People don't need health insurance; people need health care. One of the problems with health insurance is that encourages the myth that “someone else pays for health care”.
“I don't pay for health care; my insurance company pays”. “I don't pay for Health Insurance; my employer pays”, “My employer doesn't pay for Health Insurance, he gets a tax break to pay for it”.
The middle class pays taxes so that the government can give tax breaks to employers who can pay health insurance companies to pay for health care for the middle class. If you are middle class it's your money that pays for your health care – and it will always be that way. The poor aren't going to pay for the middle class's health care because the poor don't have any money. The rich aren't going to pay for the middle class's health care because there aren't enough of them and their too dang good at hanging on to their money (That's why they are rich).
All forms of “Middle class welfare” are absurd. The middle class is just paying itself, by a long and tortuous path. And all the way along that path, the the middlemen take a bite out of the money, so that less and less of the money goes to pay for health care.
Insurance companies aren't in business to pay for health care. It's a cost that they try hard to avoid paying. They are in business to make profits for their shareholders. The more they pay in health care cost, the less profits they make.
There is nothing wrong with profits. Profits are a just reward for vale add. The value add of any insurance company is carrying risk. But US Insurance companies strenuously avoid carrying risk. (If you want to see a real insurance industry you have to go to Lloyds of London. That's where companies go when they want to buy real insurance). All US Health Insurance companies do is share the cost of health care across a pool of people; which is the fundamental concept of a Mutual Insurance Company. They are carrying any risk. It's the idea of a bunch people putting money into a pool so that the pool pays for the costs of those unlucky enough to need treatment. When the pool is empty, there nothing more to pay out. The value add of a Mutual Insurance company is administration; they administer a pool. May be it's worth a few cents on the dollar to administer a fund, but it isn't worth anything like what the insurance industry's takes out. It is not worth a CEO who pays himself a billion dollars.
Heath Insurance companies are not value add companies, they are 'value take' companies. They are acting to protect a huge unearned profit stream. Just as they killed Hillary's reforms at the beginning of the Clinton administration, they use their power to benefit only themselves. That's why they 'bought' Hillary – they became her biggest donor – and that's why Hillary's health care proposal included mandatory purchase of health insurance. Just like they are offering now. What a deal!
The way to fix the US Health Care system is to put the Health Insurance Industry to one side. Ignore them. Figure out what the Health Care system should be, and then figure out what role the free market can have. The free market is demonstrably better at hitting a target than government agencies. Competition is demonstrably better at driving value add than government regulations. Companies deserve profit as a reward for adding value by hitting that target more successfully, as demonstrated by their ability to compete. But companies should never be allowed to define their own target, or the rules of the road for getting there.
Because if they do, they will define them to serve only themselves and to protect unearned profits.