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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
Two words: death panels.
Everything is complicated in health care. Even the concept of “people born with genetic conditions” is incredibly broad and vague:What conditions exactly are we talking about? WC’s kids are open-and-shut cases. How about people born with a genetic predisposition toward obesity (since epigenetics plays a role)? Or mental health issues? Or conditions which are triggered by a combination of genetic factors and post-natal environmental factors? And what treatments should we approve for these patients? How much should we pay for those treatments? How do we ensure that innovations occur when the government is calling the shots?
All of these questions and more need to be answered if the government mandates a policy of coverage for pre-existing conditions, even if that coverage is ultimately to be provided by private “insurance” companies. And there’s never been a serious proposal for this type of solution that doesn’t involve the government convening a group of experts and bureaucrats to hammer out these details.
Obamacare called for the establishment of several such expert groups, most notably the IPAB (Independent Payment Advisory Board), which is what most people think Sarah Palin was referring to when she criticized Obamacare’s “death panels”.
Full disclosure: a large chunk of my job involves providing scientific input to “death panels” in several European countries on behalf of the pharmaceutical industry.
And to keep it short, they’re often every bit as dreary and Kafka-esque as you would expect a government-led panel of experts who have to decide who gets what healthcare to be. But as I said, there’s really no way around this system that doesn’t lead to the government spending hundreds of billions of taxpayer dollars on unnecessary health care.
So any time somebody on the right proposes a simple-sounding concept – like covering genetic conditions, or mandating catastrophic coverage, or high-risk pools – that involves subsidizing a specific tranche of health care conditions, remember that you need a government panel somewhere in the loop to define what that tranche will look like and what it will be provided.
The sorta, kinda, but not really good news is that most European countries have these types of panels and yet their citizens aren’t dying in droves in the streets. The bad news is that many European countries are much better at leadership by technocracy than the US is, and yet their healthcare systems are still pretty dismal once you look under the hood.
Nice comment.
Ok, let’s set aside the folks who have genetic conditions now. A mandate for genetic conditions for all people born in the future would still allow for more money going into the pool than going out; it could still be fiscally workable, couldn’t it?
Oh, wait. Now that I think of it–if it can be fiscally workable then there ought to be a market for it, if a market were legalized. What parent wouldn’t want to take a look at such policies for their pre-born babies?
No need for a mandate, eh?
To some extent this is an unsolvable problem.
There are two basic types of genetic diseases (leaving the complicated and messy field of epigenetics aside): ones in which the parents were already carriers, and ones in which the disease arose by spontaneous mutation in the gametes of the child itself. The majority of the genetic diseases we’re talking about are the latter: one or both parents already carry potentially high-risk genes, whether or not they themselves actually suffer from the disease.
Any private insurance that offers coverage for genetic conditions from before birth is going to require parents to be genetically tested before setting their premiums. And any parents with genes that put their offspring at risk for expensive, life-long conditions are going to be faced with premiums that are too high to afford – essentially the same pre-existing dilemma we currently face.
And of course, there would be a huge financial incentive for the insurance companies to invest in research into genetic signatures that would pre-dispose offspring to expensive conditions. So eventually all that would happen is that the window in which pre-existing conditions can be identified would be pushed forward to well before birth – but the economic dilemma of pre-existing conditions would remain essentially unchanged.
TL;DR: trying to circumvent pre-existing genetic conditions by buying insurance before birth will just lead to genetic testing of parents and subsequent risk assessment.
Ok.
I give up.
If there’s a solution in business or government, I’ve no idea.
Back to prayer, philanthropy, and almsgiving for that problem.
I hate to be such a Debbie Downer.
And I’m not even an economist, Jim, I’m just a lowly biologist who stumbled into the throes of health care economics by mistake. But I really don’t see how our public health aspirations are compatible with the free market.
To misuse terminology from your field of expertise, the free market can work wonders but not miracles.
It can make the price of everything go down, but it can’t make everything affordable to everyone. We would never expect the free market to make a luxury yacht affordable to every person in society – luckily, nobody needs a luxury yacht to survive. But when it comes to genetic conditions, some people are born with the need for the equivalent of a luxury yacht in order to survive.
Or at even more fundamental level: a basic principle of any market is that if you can’t afford a product, you don’t get it. But a basic moral and legal principle in our society is that medical providers don’t refuse life-saving care just because a patient might not be able to pay for it. With that simple mandate, we’ve already violated a basic principle of the free market so gravely that we shouldn’t expect it to work well in this field.
P.S. Sorry to hog this thread so much while everyone else is still asleep.
Does car insurance cover oil changes?
No. But a service agreement at your local dealer might. Which is not insurance.
So: Health insurance is something, but it’s not really insurance. Honestly, hadn’t thought about it this way, at least not lately.
This really has been an outstanding discussion. Most of the problems are still problems. From a fiscal standpoint, I fail to see where there is any demonstrated proof that a single-payer system, with no provisions for opting out and having a secondary market-based system, is superior to other possibilities.
My wife and I recently made a change in our approach. We are both on medicare with secondary coverage. We don’t have any conditions falling into the categories under chronic or pre-existing conditions, so I’m not speaking to that issue in this comment. I had a heart-valve replacement over a decade ago so regular cardiology procedures are in order. Beyond that our healthcare is routine but we are elderly. When I say routine, I mean mostly procedures. But neither of us liked how our annual primary care visits were just another procedure.
So now we are trying a new approach to that part where we take care of the expense incurred with our primary care physician who does not participate in medicare or other insurance programs. The doctor listens, discusses, and, where indications warrant, refers us to other facilities for medical procedures which then come back for review, evaluation, and consultation.
Thoughts on this?
Question for the room: if “health insurance” was really insurance, and if she was covered for any of the conditions at the time (I assume at least #3), shouldn’t the insurance she held at the time have to cover any directly related conditions?
Is that list online where people can look at it?
2nd question: Is it the same list throughout Germany? Does Bavaria have the same list as Lower Saxony, for example?
Anyone encountered that situation where more than one procedure is to be done but they are spread over multiple visits, even though they could be done in the same visit, because doing them on the same visit has an adverse effect on the provider’s compensation?
Speaking of quibbling –
Costs are not prices. The reason why pricing transparency is difficult is primarily due to the cost shift. What the cost is for a procedure is the same, regardless of the consumer, but the eventual reimbursement for that cost, the payment, is a mix between procedures done under our fabulous friends in gov’t, Medicare/Medicaid, which do not reimburse at cost but at a prescribed pricing that they themselves set, and the delta transferred to lucky suckers who are still paying private insurers for coverage.
Hospitals don’t charge more for uninsured, generally. Not sure where that came from. In fact, big hospitals give away tens of millions a year in free care to people who are uninsured, or under-insured. If someone is uninsured by choice, and is willing to pay out of pocket, they usually get a discount on the price, since it’s a rare unicorn that pays for large-scale procedures out of pocket.
Posting prices doesn’t force hospitals to a do a damn thing. Many hospitals are regulated, in terms of what their annual margin is, and they have to hit it – no matter what. Regulation forces hospitals to do a quadrillion things that drives overall costs up, but doesn’t provide one penny’s worth of care to a patient.
There’s a lot more behind costs, what gets charged, how the hospital gets reimbursed, etc. I agree with the general premise that I’d want insurance for big-ticket items, and let me just pay for the rest on the fly. I’m assuming that’ll never happen with half the country up the government’s rear for free crap that they think they deserve just because they suck air in every day.
Actually, no. But I hope someone smarter weighs in.
Happens to us all the time. (We’re not “insured,” but we’re on Samaritan Ministries.)
For 22 years I ran a small medical practice (1 Doc, one med assistant, two clericals) which grew into a small multi-specialty clinic (2 docs, 6 allied health professionals, 25 employees) providing care in a medium sized city in the Northeast. We took all insurances, treated people out of pocket, treated people for free; we even were open one night a week as a free clinic. We were driven out of business by aspects of obamacare which rarely get reported in these debates. I now work on a salary for an 80 Doc multispecialty group and am happy to be rid of the headaches of running a practice.
A couple of years ago one of my family required urgent orthopedic and neurosurgery involving three astonishingly complex spinal operations in a month, each of which would have been science fiction just 10 years ago. These preserved the patient’s ability to walk, move her arms, simple stuff like that. The bills came to more than $400k. We paid $9k after the insurance paid its part and after negotiating a bit with the hospital.
I say all of this to show that I know something about this matter of healthcare insurance, from both sides.
The problem is two fold. First there is government involvement. The more rules imposed by Washington, the more convoluted and expensive the policies must be.
Second there is the conflation of Healthcare Insurance with Health Care, which virtually every commentator makes, including on this site. Health Care is the provision of skilled services to keep people well and to fix them when they ain’t. Healthcare Insurance is a means of financing healthcare expenses that exceed the capacity of a family to pay out of pocket.
Were the government not involved, I could have practiced on a fee-for-service, pay out of pocket basis, charged a reasonable fee of $50 or so for a lady’s annual exam, had Zero employees submitting bills to insurers, had Zero charges denied. The cash drawer would be balanced at 5 pm daily. Kind of like going to the grocery store. Healthcare insurance would have had nothing to do with my practice.
Healthcare insurance should be for unexpected big expenses. Astonishingly complex spinal operations, cancer treatments (which I have had), ICU stays, etc. But this is not permitted because of problems one and two.
Were the government not involved, I could pay for my annual exams, cardiology visits, daughter’s pap smears etc out of pocket. I could have a policy covering extraordinary expenses for my family for a couple of hundred bucks a month. But because of the sums of money involved and the rapaciousness of the social welfare state, that will never happen. Hence our current dilemma.
End All Government Involvement in Health Insurance and the problem will be solved, by the market, in six months.
While I’m at it, I wish I had a flying pony.
This used to happen to me all the time.
When you say, with a hint of a sneer, “adverse effect on the provider’s compensation”, we are not talking nickles and dimes. We are talking about total refusals to pay. We are talking about not paying me at all for care given in good faith to a patient with valid insurance.
An annual exam is strictly defined. Also a problem visit. So if at an annual a lady wanted to talk about a new problem–depression, back pain, hypothyroid symptoms, menstrual migraines, whatever–and I documented it honestly and dealt with it correctly, the visit is now a problem visit. A thirty minute visit has now taken 45 minutes of my time. But the patient has not yet brought these symptoms to the attention of her primary Doc, so there is no referral. Thus, I would get denied payment for the annual, for the problem, or both.
You can imagine where this quickly leads. And its all the fault of the policies of the insurer, directly derived from the two issues I noted in post 77.
In a sane world where heathcare insurance covered only catastrophic illnesses, my putative $50 visit would be upticked to $75, the patient would not be asked to return next week and everyone would be happy.
This is why we can’t have nice things. It *can* be this simple. It will never be this simple, when politicians can sell something to the rubes, the idea that they can have things for free, and make mean, evil, rich people pay for it.
Well, Augustine, what do you think of the Coulter plan:
I kinda like it. But it seems to suggest an ongoing clean slate where I think there really ought to be some regulations allowed. Make “other laws” say “prior laws” so it’s clear that, without repealing the Coulter Act, we can add a regulation next year to, e.g., protect the free market by cutting back on fraud.
I’m also a bit unclear on federal authority to kill state regulations.
@mendel, @iwalton, @misthiocracy: Post modified (hopefully well) in light of your insights.
(Still haven’t finished reading the Imprimis piece!)
Oh for Pete’s sake, hospitals and clinics and doctors were routinely charging more for the uninsured – if you ‘ve never been uninsured you might not understand that. That may have ended over the last ten years. I’m on MediCare now so it is no longer my problem. But it was an on going situation.
The situation was definitely going on when this PhD type from, Johns Hopkins wrote abt his 2007 survey:
https://www.jhsph.edu/news/news-releases/2007/anderson-hospital-charges.html
May 8, 2007
Hospitals Charge Uninsured and “Self-Pay” Patients More than Double What Insured Patients Pay
Are you fine with some nameless drone at the insurance company telling you what they will pay for? Or what doctor you can see?
What’s the difference?
You only have this when the government says you must. What do you mean by your question? Why would an insurance company need to know what licensed MD is treating you. When I first had medical insurance I had my doctor visit to the doctor of my choice, paid the bill, and filed a claim with my insurance company to either charge it against my deductible or reimburse me for what I was due. Only collusion between the government and insurance companies yields the result you appear to be describing. Big difference!
When is the last time that you switched governments due to unacceptable service?
Apparently the American people switched governments in 2016. So it can be done.
But the hue and cry of those Republican candidates who wanted us to make this switch was that once elected, they would repeal ObamaCare and replace it with something better. With campaign promises being as they are, as far as the “better” goes: republicans in power have presented tons of ideological theories – many of which I agree with on the theoretical level. But most of which are tremendously horrid on the reality level.
As far as most Big Insurers being entities we normal people can switch away from – not true. Most Americans have to go with whatever insurance entity their employer offers. If a worker is really lucky, this means they get to choose between Brand A and Brand B.
As far as the situation that the self employed face here in rural Lake County, Calif, several of the major insurance companies have hospitals that are an hour and half drive away. Should I need the closest ER and be insured by one of those entities, after my treatment, I will be spending hours of my life on the phone arguing about how I might not have survived the 1 and 1/2 hour drive to their “approved ER list” of hospitals.
Remember it is this way because of big government wage controls. We never had a free market approach in medical insurance.
Too bad the government’s policies don’t have wage controls over Big Insurers’ executive level salaries. The guy who headed United Health care raked in over 60 mil a year. Yet this is supposedly a government that puts wage controls in place?
http://www.startribune.com/unitedhealth-ceo-stephen-hemsley-made-more-than-66-million-in-2014/298924971/