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The Democrats Eliminated Health Insurance
What “health insurance” means–or used to mean, or at any rate should mean–is something like this: a financial product insuring against future medical problems, and having enough money to cover them at fair prices because it does not insure against past and current medical problems for the same price.
Democrats banned health insurance in America. (To be fair, some Republicans helped move things in that direction; see comment # 19 below.)
We can talk about how wonderful it is to have pre-existing conditions covered, but that doesn’t change the fact that requiring their coverage means banning health insurance.
Look at it this way:
Imagine a financial product people use to help with the expense of medical care. It’s called “health insurance” because it is a financial product insuring against possible future problems, not paying for existing problems. That’s why it is an efficient product: The money going out of the pool is less than the money going in, since people buy into the pool as insurance against merely possible future problems, and not all possible problems become actual.
America has a long history of using financial products to pay for healthcare which are not health insurance but which we keep calling by that name. (See comment # 33 below.)
But, once upon a time, real health insurance was at least tolerated by law.
Back then, healthcare was getting more expensive in America. America liked the idea of health insurance–or at least the idea of what we called “health insurance”–so much that we fell in love with the idea of a financial product that finances healthcare. We wanted to make sure that everyone had such a financial product–a worthy thing to want. Sadly, there was no easy way to make that happen, because some people already had actual problems. So health insurance, probably the best reason we ever had to like these financial products in the first place, was restricted and, ultimately, banned.
In its place we set up a different product which did not insure against future problems. This new product bore the name “insurance” by a misnomer, or perhaps by a change in the English language.
This new product, alas, was doomed to inefficiency; the money going out of the pool could easily exceed the money going in because it was not an insurance against possible future problems. Hence the need for the unConstitutional mandate to purchase the product, the solution to which is not just to kill the mandate, but to legalize health insurance all the way. Repealing Obamacare in whole would be a good start. (See # 19 for a hint at another good idea.)
But what about those pre-existing conditions? Don’t those people deserve help? Yes, they do. And that fact does not make a good argument for banning health insurance.
It’s not fair that some people have trouble getting a nice cup of tea whenever they want it. But that is a terrible reason to ban all tea and require everyone instead to drink something “almost, but not quite, entirely unlike tea.”
That does not make a better world.
Neither does banning health insurance for everyone so that some people can have a very different financial product.
Maybe this problem has, as Thomas Sowell says, no solutions, only trade-offs. But banning health insurance, I’d say, was the wrong trade-off.
Still, there are other ways to help people with pre-existing conditions, up to and perhaps including government assistance. And down to and including fixing all the problems that were making healthcare so expensive in the fist place. E.g., allow purchasing across state lines, do some more lawsuit reforms, and end federal action forcing big employers to shove thousands of very different people into the same one-size-doesn’t-fit-all policies.
Note:
This post has been edited in light of insights from commentators better informed than I! See, particularly, comment # 19, comment # 16, and comment # 33.
Published in Healthcare
By the time I was forty six in late 1990’s, I thought I could afford health insurance. Even though it was going to run me $ 550 a month.
But no insurer would cover many major parts of my anatomy. So I gave up, and was lucky due to most major things that went wrong with my body occurring when I was covered by employer’s health insurance, which insured all of me. If all of me could be covered under the employer’s policy, why would an expensive self-pay policy rule out these:
So over the years this insurance scam of not covering “pre-existing conditions” has been discussed by friends who have had the same problem. Sometimes this means that a person does what they hate doing: being an accountant for a large company rather than a ballet teacher self-employed. Or a social worker at a government agency rather than working privately as a therapist.
We are the only industrialized nation that does this to its citizens. We can afford non-ending wars that cost the tax payers tens of trillions of dollars, and which seemingly cannot be won or show us much reason for their existence.
But we cannot afford to have Single Payer Universal HC. However people are waking up and now it is stated that 52% of all Republicans think that MediCare for all might be a good idea.
That sounds awful. How sad you had to go through all that. The one about the research biopsy is especially aggravating.
What makes you say the employer’s policy was not expensive?
Can insurance cover pre-existing conditions at no extra cost and still be insurance? It’s not insurance if the government forces Geico to sell its financial products to people who’ve just wrecked their cars. It’s something else.
Which other industrialized nations ban health insurance?
Wouldn’t it be nice if the big insurance companies could carry their share of the burden for a change? But to do that they have to be able to have enough money coming into the pool; that means legalizing health insurance.
As for those pre-existing conditions: Yes, they matter. Yes, you matter. And maybe–I don’t know, but maybe–we could afford to have government cover them. But why is banning health insurance the right solution, or single-payer universal HC?
Do you really want the Government controlling your medical care? That’s what Single Payer is. Your medical care becomes a line item in the Federal budget, a cost to be managed (and reduced if possible). Are you over 50? Be prepared to simply be denied treatment for some conditions. That is what Single Payers do.
A big reason why I have continued working (at age 69), and vowed never to be subject to Medicare, is that I refuse to have my medical team determining my treatment based upon “what Medicare will pay for”. I don’t give a rat’s ass what Medicare will or won’t pay for. No faceless bureaucrat in Washington DC will be my master.
By definition insurance is supposed to insure against an illness/injury in the event it occurs. If you already have that, and especially if it is chronic, then it would not be insurance since the event that it is supposed to be insured against already exists.
Where is the policy that states the USA government will have this policy so that people have to work certain occupations in order to acquire generous “health insurance” plans. There isn’t one and I, nor anyone else, don‘t have an obligation for you to work the job you want and to get an expensive healthcare plan so that all your issues are covered.
Also no nation has what you allege. In France there may be single-payer but that does not mean those people with pre-existing conditions get the job they want also. The massive government spending is one reason why they have a consistent 10%, or higher, unemployment rate.
The US government spends triple to quadruple on welfare the amount spent on the entire US military a year, and the US military spending is around 600 billion a year. The US military wins its engagements and has a sterling record of victory. The same cannot be said for the welfare state in the USA where those on the rolls only increase with time and repeated economic analysis indicates it is highly inefficient and bloated.
Might is not the same as is. But even if 52% thought it was good that does not make it good. Single-payer as others have stated means that the state has more control over your life because it is the one footing the bill.
As seen in other nations this leads to considerable shortages in the more expensive treatments and operations that would balloon the budget while more mainstream and economized treatments would not be cut. This would hurt those with pre-existing conditions the most since they usually require the more expensive treatments.
The solution of the issue of health insurance is to limit it to what it once was, just insurance for certain risks. Even prior to the ACA health insurance was dead in America. It was no longer being used to insure against actual risks but for all medical expenses.
That blanket coverage increases the cost dramatically because it both encourages rising costs through third/fourth party negotiation (the insurer, who does not have the incentive of getting the lowest cost and the hospital who serves on behalf of the medical professional) and the increase in the scope of the insurance. Add in state oligopolies for insurers and enough time and the costs will greatly inflate, as they did.
Have insurance plans cover actual risks again, decentralize the health care field, get rid of those state imposed insurance oligopolies and you will see costs go down and quality improve because there will be actual competition. I have no doubt that in that far more free market healthcare plans would also be devised for those with pre-existing conditions. Where there is a need markets develop to satiate them.
It’s fun to ask leftists if they’ve ever seen the pie charts of government expenditures in the 1040 instructions. They often have no idea what that pie looks like.
Yes! Maybe that should have been in the OP.
Speaking of industrialized countries, I can name a place with a relatively free market–freer than the USA. There’s still enough decent government healthcare that we managed to have a whole baby in the government system. ER visits in the private system are massively cheaper than in the US. From what I can tell, my employer plan is way better for me than what we used to have in GA. I think I may also be costing my employer a lot less in per-employee healthcare expenditures. So far we haven’t used any third-party payers, and it’s great.
When the markets are tolerated by law.
Another clue that America’s healthcare system has next to nothing to do with a free market system:
It’s normal in America to make a decision to buy healthcare without knowing what it actually costs. That’s not free choice.
Imagine buying anything else and being told by the salesman that they can’t tell you what it costs–you’ll have to buy now and wait for their billing department to hopefully send you a letter next month on the subject.
False. The black market exists for a reason.
Ok, I guess that does happen!
Wait. Is there something I don’t know but should know about healthcare in the USA?
Thanks for that. You reminded me that I have half-eaten pecan pie in the frig.
Regarding this whole article, I am so happy to see for perhaps the first time since 1993, someone referring to health insurance and drawing the distinction between insurance and health care.
And I don’t mean to be minimizing people’s pain and suffering, but doctors were until our lifetimes, or our parents’, quacks by modern standards. Antibiotics as marvelous and as overused as they are today didn’t even exist. Scratches killed. Liver pills cured psychological disease, or some such. Heart lung machines, heart transplants, blood transfusions, modern anesthetics, cat scans, MRIs didn’t exist until a blink of an eye ago.
There is another perspective. In biblical times a woman paid apparently a small fortune over the course of her life to various doctors, who promised some sort of improvement which never came. No one ever promised anyone an illness-free life. And doctors are not gods. And one’s improvement is never certain. And yet, health care (or its payment) is somehow now a human right. Remember, doctors can’t be forced to work for nothing. And rarely can they be forced to work if they don’t want to. That’s why they’re retiring at a rate at which the young college grads don’t choose to replace them.
Because they are no longer professionals in the sense of being independent practitioners allowed to use their unique knowledge base, judgment, experience and problem-solving skills for the good of the client, or patient. They’re now just employees, who have to beg for a vacation or put in for a day off, or have to beg to work less weekend shifts.
There is a crisis growing in medicine, and the answer which will prove to be ineffectual is hire less-educated less-skilled lower-paid “providers”; give them standardized cook-book regulations on how to diagnose and treat everything apart from any individual experience and judgment; pay them less and limit vast swaths of treatment from ordinary care to reduce costs; price fix; and replace them with robots. And shortly thereafter replace the patients with robots.
Okay, a little joke at the end there. But I was just talking to some docs in the last couple of weeks who were saying that soon enough, all medical care was going to be provided my AI. Right. Good luck with that. It leaves out the whole human experience. Human interaction and caring itself is a great healer, but once you reduce it to algorithms, diagnostic manuals, standards of care, and artificial intelligence to diagnose and treat, I’m not sure that that isn’t missing one of the greater parts of the art of medicine.
This has been my bone to pick in the whole debacle. I contend that the “insurance” most people have had is a subsidy. Remove the middleman, have patients pay what the market will bear, and all costs will go down. A doctor or hospital would not stay in business if it charged the rates they list on your bill now, which they do because they know that “insurance” is going to pick up the tab. When they “charge” $250 but they accept the insurer’s $75 and your $25 co-pay, it seems to me that the real cost was $100. But hey, let’s start at $250 and see what we can get!
Isn’t that all related to accounting gimmicks to deal with the fact that the government underpays for the same services?
Or maybe it’s another accounting gimmick. It’s hard to keep track of these things.
Thank you. But I’m not the first since 1993. I’m indebted to someone or sometwo here or there at Daily Wire, Ricochet, or NRO.
I think @kevinwilliamson has done some good here, and helped me.
Could be; I don’t know the ins and outs of Medicare/Medicaid. It negates a free market, whatever the cause.
I would word it a little differently, but not much. People didn’t just like health insurance. The government subsidized health insurance by inducing, even I would say ultimately forcing, employers to pay for and give out health insurance to employees, by giving employers tax incentives to do so, and creating a job market in which employees would be attracted to companies based on the health insurance benefit that was considered as an overall part of the salary. And then the HMO craze, purported to bring down health costs, further and effectively separated doctors from patients by negotiating cost themselves and passing on only a token cost to the patients. This third-party payment system essentially subsidizes providers and incentivizes them to raise rates, just as government-guaranteed mortgage and college loans have caused sky-rocketing prices. This has grown to the point that patients often think that their medical costs are gimmicked up in some sort of payment scam, and to say outright that they themselves are paying for their office visits, prescriptions and tests and treatments, when they are really not: it is the insurance company.
You want to fix things? Follow the suggestions you made about deregulating health insurance companies; stop subsidizing employer payroll deductions; return to an 80/20 insurance system; and then, sure, see if the American people are willing to pay for their neighbors’ medical costs.
I’ll say this one last vague caveat: maybe as much as half the people in the United States have no interest in actually denying themselves whatever pleasures and eases they would lose in order to be as healthy as they can and to be as illness-free as they can; they have come to the point that they really do expect the money that they spend on medical care to “cover that”; meaning, they expect the medical system is to take full responsibility for their illnesses and their cures so long as they themselves pay something no matter how little out of pocket, and that they themselves cede all responsibility to the medical “system” to fix what they are have no intention of taking care of themselves. It sounds harsh, but I really do hear a lot of people put all the blame for their health and for their lack of improvement on everybody but themselves.
I really do want people to be as healthy as they want to be (and frankly, I think it’s every persons right to live as carelessly as they want as well) but the great portion of people’s health can only be maintained by themselves alone.
See Hillsdale “Imprimis” below on the subject. It agrees with St Augustine. Econ talk had discussion along the same lines. The fundamental mistake was to destroy the market for health care with an insurance model. Insurance is needed for unexpected major medical issues. The AMA was afraid of socialized medicine and pushed us in this direction even though the insurance industry didn’t want it. It’s made them rich. Getting back to a market will be difficult. Probably we need charity hospitals for all who want them, and let everybody else sort it out by getting state and federal govenments out of the way. Markets work everywhere else. Government works no where but ocassionally is needed as when we’ve been attacked by hostile power, or to undo invasions by power grasping politicians.
September 2018 • Volume 47, Number 9 • John Steele Gordon • Healthcare
Excellent.
@flicker said:
”I’ll say this one last vague caveat: maybe as much as half the people in the United States have no interest in actually denying themselves whatever pleasures and eases they would lose in order to be as healthy as they can and to be as illness-free as they can; they have come to the point that they really do expect the money that they spend on medical care to “cover that”; meaning, they expect the medical system is to take full responsibility for their illnesses and their cures so long as they themselves pay something no matter how little out of pocket, and that they themselves cede all responsibility to the medical “system” to fix what they are have no intention of taking care of themselves. It sounds harsh, but I really do hear a lot of people put all the blame for their health and for their lack of improvement on everybody but themselves.”
You said a mouthful here. The people we see in the hospital now are sicker than they were when I started 30 years ago. I know there are several reasons for this, but what you said above is a big one.
Thanks for the link to the Imprimus article @iwalton. I am enjoying this conversation. Hate I’m going to be off line for a few days.
Very nice post, but I’d like to propose a slight modification:
The premise of the post is that the prohibition on pre-existing conditions killed health insurance. The first law that prohibited health plans from excluding customers with pre-existing conditions was HIPAA, passed in 1996 (i.e., under Bill Clinton and the Gingrich Congress).
Of course, the pre-existing conditions protection only applied to employer-provided group plans. But employer-provided group plans have comprised the vast majority of health plans in the US for decades. In contrast, the PPACA extended the coverage to individual plans, which still cover less than 10% of Americans.
Or to frame it differently, the vast majority of Americans haven’t been receiving anything resembling health insurance since at least 1996 (in reality much longer). But we, including most people on the right, continued to think of employer-sponsored group plans as “health insurance”.
I’m not sure this has been the case since the end of WWII. Americans love health coverage paid for by somebody else (either government-subsidized employer plans or government-funded Medicare). We only liked “health insurance” because we became accustomed to erroneously calling employer-provided health care “insurance”.
Most Americans who had honest-to-God health insurance in the decades before Obamacare would have preferred to have employer-provided group coverage.
Considering how few voters on either the left or the right are calling for Medicare to be disbanded or at least converted into a defined-contribution system, I’d say quite a few people are happy with the government controlling their medical care.
The policy is called the employer health care premium tax exclusion.
We don’t force employers to provide “health insurance” (well, Obamacare tried to until Obama sabotaged his own law). We simiply provide the largest tax break in the entire tax code to “encourage” them to provide health coverage at more competitive conditions than their employees could likely get on the individual market.
This raises the question of when a government financial incentive becomes so great that is essentially coercion. The Supreme Court ruled that the original terms of the Medicaid expansion in Obamacare were unconstitutional even though states technically weren’t being forced to accept the expansion. The Court ruled that the amount of hand-out money states stood to lose if they didn’t expand Medicaid was so large that it was tantamount to coercion.
Seeing as how the employer health coverage tax exclusion is by far the largest in our tax system, I think there’s a decent argument that Uncle Sam is putting its thumb on the scale of the healthcare market and nearly forcing people to seek their health coverage through their employer.
Ahhh yes, “Insurance” that covers pre-existing conditions. Every time someone utters these words, someone else should bring them up short and remind them and everyone else that there is no such thing. “You mean Pre-Paid Health Care?
Health ‘insursnce’ is expensive because (a) it’s pre-paid healthcare not health insurance and (b) because there is no real market for health care.
Markets require that both buyers and sellers know what is being offered and what the price is. In most healthcare, neither one of those is true. And since there is no real market, none of the efficiencies that markets provide are available to healthcare
Great post. A lot to think about here. There is little doubt our system is broken.
Speaking for the self-employed – there is another aspect to private insurance that hasn’t been raised here. When I was in my 30s and 40s and totally healthy (no pre-existing conditions), I had to regularly change health insurance because of premium creep. More than once, I quite literally saw my premiums triple in a year’s time – and I had made no claims at all. (Imagine if one’s automobile insurance rates did that.) So – I would go in search of a new policy. Rinse and repeat — until the day came that I did have a condition that would now be seen as “pre-existing.”And I was stuck. My wife chose her jobs based largely on family health insurance benefits from that point on.
There is probably no easy solution. And I’m old enough now that it makes me tired to even think about a solution. But a doctor buddy of mine once told me that we need to get the insurance companies out of the middle man slot, and we should all be paying for the “little stuff” (anything under $500) out of pocket.
I would quibble a little bit with this formulation: in the status quo American health care context, the buyers do know what is being offered and what the price is. It’s just that the buyers aren’t the patients, they’re the insurance companies.
It’s almost akin to the Facebook/Google business model: we users think we’re the customers, but we’re actually not the ones spending for our own consumption. Except that in this case, of course, we are in fact shelling out lots of money for our consumption, but even that is still less than what others are paying on our behalf.
So just like we really have no idea how much it costs Facebook or Google to provide us their services, it makes sense that we don’t know how much our health care really costs since we’re not the ones providing the lion’s share of the reimbursement directly out of our pockets.
There position between buyers and sellers of healthcare is the primary reason that there isn’t a real market. They make real prices invisible.
Fair enough. I should have stipulated consumers and producers of healthcare instead of buyers and sellers. That’s a measure of how screwed up the process is. The consumers aren’t the buyers.
And re Facebook and Google … theirs is the biggest conjuring trick. They have convinced us that we are consumers of their services when we are, in fact, the unpaid providers of the commodity they are selling.
We are like beavers who think we are consumers of the bait the fur trappers put out rather than the providers of the product the fur trappers sell.
Dumb question, why are we paying for check ups and little things with “insurance”. Why isn’t “insurance” for the big stuff. My auto coverage doesn’t cover oil changes and tune ups.
Admittedly my point was somewhat semantic. Then again, so is the entire premise of the OP.
I do think there’s an underlying truth here though: amidst all the yammering about Obamacare on the right, the gold standard to which most Republican voters most likely with to return is the age when even blue collar employees could expect generous employer-provided health coverage with little to no deductibles or co-pays.
But in that erstwhile scheme, consumers indeed paid very little to nothing out of pocket, and were not that far off from the Facebook user in terms of being a pawn in a larger game being played between providers and corporate payers.
Since this thread is indeed in large part about semantics, I am less troubled by calling our pre-paid health care “insurance” than I am troubled by the fact that we as a country have convinced ourselves that the pre-Obamacare status quo was somehow a “market-based” system. It was nothing of the kind. And the fact that we now have no idea how large our co-pay will be until we get the bill is a direct legacy of that “free market” system.
And today’s doctors, like me, will be considered quacks 50 years from now. Unless we continue to accept socialized medicine. Then, progress stops, because there’s no private money for research. In socialism, nothing improves.
Huh? I don’t understand this part…
Very true. This is already happening. It makes me sad to watch my life’s work be reduced to, well, to this paragraph.