Health Insurance: What a Pain

Originally, posted to MySpace, July 26, 2009

  

When it comes to America’s screwed-up health care system, the insurance industry is not entirely innocent. Since my back trouble returned, I have been looking at various health insurance plans. The gist is that no one is willing to cover my pre-existing condition without making me suffer for it financially. Insurance companies will fight over your business—provided you are a fit as a fiddle. Yet, if you have so much as a pimple on your butt, insurance will cost you an arm and a leg.

A former high school classmate of mine used to have his own insurance company. A recent online discussion prompted me to ask him to explain why health care in the U.S. is so expensive. He responded with a detailed letter that was eventually summed up in one sentence: the insurance industry is “in business to make money”.

It’s a basic law of economics that people get into business to earn a profit. You can’t blame them for that. Hell, whether people own a business or not, they want to take home more each month than they can possibly spend (or have to spend just to get by). Yet, is there a point at which earning a profit becomes immoral? What if you earn those profits at someone else’s expense (e.g., pharmaceutical companies), causing them harm? Doesn’t that make you a criminal? Aren’t there laws in place to prevent that sort of thing?

What if food producers charged outrageous prices for basic food items simply because people need to eat in order to live? What if a gallon of milk cost $10 and a loaf of bread $15? How many middle-class families could afford to eat then? Wouldn’t it be government’s job to step in and institute price controls?

My entrepreneurial classmate made the statement that “insurance is NOT an ‘entitlement’ that everyone has the ‘right’ to have. It’s a privilege...” Oh, really? He compared obtaining insurance to getting a driver’s license. Yes, there is no law on the books that says you have to drive a car. Neither the Bill of Rights nor any other Constitutional amendment covers a POV (personally owned vehicle). For some odd reason, the Founding Fathers neglected to include that clause.

However, both businesses and private individuals in modern society depend on automobiles. The population of the U.S. is geographically more spread out than that of most European countries for example, and the historical development of our nation has left a big part of the United States without public transportation. Many major cities provide no noteworthy system of buses and/or light rail, and there are no trains or buses to transport people between municipalities. Very few workers live within a reasonable walking or bicycling (don’t even get me started on Amarillo’s so-called bicycle lanes) distance of the places they work. A driver’s license and car ownership are a necessity. They are a matter of survival.

Is private gun ownership a matter of survival? The United States Constitution contains a right to bear arms, but are guns an absolute necessity? If people didn’t own guns in the modern world, would they still be able to obtain food? Would they be able to work and earn a living? Only law enforcement officials would be out of a job, so allowances would have to be made, but those weapons wouldn’t be privately owned. Manufacturers and sellers aside, a lack of gun ownership would not be a severe detriment to those whose primary occupations do not depend on firearms. In most dictionaries, that qualifies as a privilege.

The greatest political philosophers of the 18^th century saw that human beings—by virtue of their very existence—were entitled to certain things. Thomas Jefferson, basing his writing on that of John Locke, worded it thusly: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” In more contemporary vernacular, he was saying, “It’s as plain as the nose on your face that every man, woman, and child is born with the right to live freely and happily.”

I would be very surprised if my friend disagreed. The Declaration of Independence (which, sadly, has no legally binding force) called life an “unalienable right”, not an “assumed right” and not a “privilege”. Doesn’t that “right” cover whatever it takes to sustain said “life”? Isn’t your state of health a part of life? If you are sick and can’t afford medical care or insurance to help you get medical care, do you have much of a “life”?

The flaw in his reasoning is that people don’t get insurance because it’s fun to shell out hundreds and hundreds of dollars each month for a little peace of mind. In the case of health insurance, it’s a matter of survival. If you need major surgery but don’t have insurance, you can kiss any retirement savings you may have or your car or your house good-bye. Insurance to cover outrageous medical bills is simply indispensable. If medical professionals and hospitals lacked any conscience and were allowed to turn away those that didn’t have the means to pay, then the uninsured could also kiss their asses good-bye. Fortunately, doctors aren’t allowed to withhold treatment, but someone has to pay for the uninsured. Many people fail to realize that taxpayers cover the cost of care for people who just can’t afford it. One way or the other, the American public finances medical care for a significant portion of our population.

Because of the high cost of medical treatment, insurance has become a necessity. Unfortunately, the cost of insurance itself isn’t exactly peanuts. First, you pay your premium, which can range from less than $100 to $400 per month or more. Then, you have your deductible, your “share” of the overall bill per year. (I thought that’s what premiums were for.) This can be anywhere between $1,000 and $10,000 (yes, I have seen quotes stipulating a deductible that high) per annum. Never mind the thousands of dollars in premiums you might have already paid since your last trip to the doctor if you don’t get sick or injured very often. Speaking of which, your insurance policy might just limit the number of doctor’s visits you can have each year or which doctors you can see (“in network” versus “out of network”).

Then you have “co-insurance”? Co-insurance??? Hello?? What linguistic nincompoop came up with that term? If ever there was an oxymoron (with the emphasis on MORON), this is it. The whole idea behind insurance is for a co-operative or co-llective of people to put money in a big pot to shell out for one of its members in time of need. Hence, everybody is “co-insuring” the individual in distress. (By the way, this demonstrates a fundamental socialist concept: everybody chipping in for the good of the weak. Without even realizing it, most Americans deal with socialized institutions every day.) Your “co-pay” is just another way for the insurance company to make you foot a larger portion of the bill.

Why is it that insurance companies resort to limiting your freedom of choice and twisted terminology in order to place an ever increasing share of the burden on those that contribute to them? Could it be they feel they have to? Yes, at least partially. According to my insurance expert, trivial claims and insurance fraud are a big problem in the industry.

What exactly is insurance—any kind of insurance, be it medical, automotive, homeowner’s, or a ballet dancer insuring his/her legs? What is the purpose of insurance, and where did it come from? Without delving into a history lesson, insurance in a nutshell is all about the spreading of risk. Many people pay in a small amount but can be compensated for big losses if something bad happens to whatever or whomever is insured.

According to my high school classmate, risk also happens to be the determining factor in whether or not you get insured. If you present a greater risk to the insurance company than they are willing to take on, it’s, “Sorry, can’t help you. The reward we would get in the form of premium after premium after premium after premium is not worth having to pay the cost of getting a splinter removed from your finger at the hospital.” I purposely resorted to such a trivial example because my friend cites frivolous claims as the reason why insurance costs so much. He gives examples of different activities that increase the risk for an insurance company: smoking, skydiving, and unhealthy diet. The list could go on and on. If you are a smoker, there is a good chance of you needing costly medical care at some point down the road, and some companies charge smokers higher premiums than non-smokers. A skydiver’s parachute might not open, in which case it will probably be his life insurance having to pay out, not his medical insurance. These cases seem clear cut. An insurance company would seemingly be justified in charging the skydiving smoker more than a health-food junkie who does yoga.

Suppose you are a jogger. Regular exercise would keep you healthy, thereby lowering your risk to the insurer. Then again, maybe not. What about the risk of knee injury from jogging on pavement or getting run over by a car while jogging in the friggin’ street? Ah, there’s the rub. It is up to the insurance company to evaluate the risk you present to them. You’re a wood carver? “Sorry, can’t insure you for any splinters in your fingers, or if we do, your premium will be 500 bucks a month with a $7,500 deductible.”

Something else: just because your policy doesn’t carry a rider, don’t think that your claims will be handled quickly and with a smile. Since insurance companies are “in business to make money”, it is in their best interest to avoid paying whenever you file a claim. They set the amount that is paid out, if they pay at all. My chiropractor recently told me insurance companies have cut his income to 1970’s levels. I seriously doubt his expenses have stood still since then. Let’s see that doctor go to the grocery store and say, “Sorry, I can only afford to pay $1.50 for a gallon of milk.”

It isn’t insurance that people are claiming a universal right to. It’s decent and affordable medical care. Members of the United States’ armed forces have free medical care. Why? Because they are serving their country, right? Well, just how does America pay for its strong military? It’s the American taxpayer who picks up the tab. When you think about it, the American people serve their country just as much as the men and women in uniform. Isn’t it about time the government compensated us all?