It's not insurance.
Nothing new here to people familiar with the situation, but many don't seem to understand the problem. But this is the origin of it:
Health insurance started to change, though, during the Truman administration. (I hasten to mention that I wasn't actually there: I was born during the Eisenhower administration, when the process had only gotten started.) Truman wanted to implement the progressive new notion of a national health care plan, but couldn't get it through; at the same time, post-war wage controls were still on, so employers bidding for new workers had to find other ways to compete.
Through a sequence of compromises, what came out of it was a system in which companies and only companies could buy health insurance and health care for their employees, and deduct the cost as a business expense. My father's music store and the steel mill across town could buy health insurance, basically, at a discount. (My uncle the butcher couldn't; he wasn't a "business.")
Years pass. (Insert visual of wind-blown calendar leaves here.) Medical care becomes more complicated, legal conditions change, and a lot of things that used to be major medical issues that mostly affected the life insurance rates become things that could be cured, or at least managed. Increasingly, what was "major medical" insurance became, simply, health insurance; we expected the insurance companies not just to pay for unexpected events, but for the normal sort of day-to-day maintenance we all need.
People will pay to repair their car, or their pets, or appliances out of pocket, but somehow, over the past decades they've come to believe that it's a fundamental human right to have someone else pay for your doctor visits. Until we cut off this disastrous government policy of tying health insurance to employment, and allow everyone to deduct medical expenses on a level playing field, and get people to understand that we have to return to the model of health insurance the problem will not be solved.
Correct. It's not insurance, nor can it ever really be, because, at the end of the day, you can't insurance against things that have a pretty near 100% chance of happening over a given period of time.
At least, not unless you level the field entirely and let the insurance companies "insure" themselves against risks by not insuring people with, for example, genetic traits towards certain expensive conditions.
People get cancer, they have genetic heart problems (excluding environmental and lifestyle issues) - what is your proposal for them then? They won't go away.
People get cancer, they have genetic heart problems (excluding environmental and lifestyle issues) - what is your proposal for them then?
Not all people get cancer. Not all people have genetic heart problems. I propose that they get true insurance.
While not perfect, Medical Savings Account style plans are one answer. How much would car insurance cost if it covered gas fillups, oil changes, paint jobs, etc.? No one would buy car insurance that way but everyone seems to believe that medical insurance should cover every possible medical expense starting at Dollar One.
Let people buy hospitalization coverage for major medical expenses such as accidents or serious illness. A policy with a resonable deduction can be had for a lot less money and let people pay for their own doctor visits.
A side benefit of people paying for their own doctor visits is that you can probably pay less if you pay on the spot. Most doctors have to employ at least one person whose job is to fight with the government and insurance agencies to get paid. Paying them on the spot will save doctors quite a bit of money and hassle.
Medical care has to be rationed.
We as a society can't afford to give every one the best possible care all the time.
Thought experiment:
Suppose we can make a cloned heart, it takes a team of 50 technicians 6 months and it works every single time.
It costs 10M. Its no longer an experiment, it just works. We as society counld not afford 10M for every person that needs anew heart. Bill Gates could buy one, I could not. Is that fair? No, but life is not fair.
The poor will always have inferior compared to rich people. Its the way it has and always will be.
This fact does not change if is replaced with health care. Is a poor person entitled to a Rolls Royce?,Mansion? , Country clum membership? then why are they entitled to world class heath care.
I keep seeing the video o press accounts of the poor senior that can't afford their medication. They are pleading for affordable health insurance that covers drugs. If the average senior pays $200/mo for medication no senior drug insurance can possibly cost less than the average of 200/mo. If it costs less than 200 its nto insurance, its wealth transfer.
It's a good article, but he overlooks an important fact. Medical science -- not to mention our attitude towards life 'n' death -- has changed radically since the 1950s. Fifty years ago, quite a lot of people, perhaps even most, simply died when their time came. There wasn't much you could do about a serious heart attack, or a stroke, or most cancers. For quite a lot of people, dying wasn't particularly expensive. It was only in the relatively few cases where a disease was both very serious and somewhat treatable that expenses were high, and, indeed, you can take are of that with an insurance a/k/a Ponzi scheme.
Unfortunately (depending on how you look at it), this is no longer true. We have made substantial progress with major killers like cancer, stroke, heart disease and kidney failure. Stuff like transplants, stents, statin drugs, angioplasty. These things make most serious causes of death somewhat treatable, but still, often, do not actually return a person to full health. Indeed, in probably the majority of cases they just stave off death for a short while, days to months to a few years.
What that means is that nowadays nearly everybody dies expensively, because nearly everybody gets some massive amount of treatment right at the very end. It's far less often the case that folks just drop dead, or die at home, in a fairly cheap way.
So now we're back to a situation where major medical insurance won't work, because, as the article points out, you can't use that scheme when it's a near certainty. It's a certainty you'll die, and these days it's a near certainty that you'll run through some very expensive treatment just before you do.
From that point of view, it does make sense for the young to subsidize the old, because the young turn into the old. Everyone takes his turn, so to speak. What the argument revolves around, or should, is whether people should transfer wealth from their youth to their old age on their own, as savings, or whether it should be done forceably by the government.
Daveon wrote:
Correct. It's not insurance, nor can it ever really be, because, at the end of the day, you can't insurance against things that have a pretty near 100% chance of happening over a given period of time.
Apparently Dave has never heard of life insurance.
Mike
A lot of people say that health care is expensive because people go to ERs as their primary doctor or run to the urgent care every time they have the sniffles.
The big ticket item costing the big bucks is kidney dialysis I tell you. I have it on anectdotal evidence that this can run up yearly six-figure medical bills. When I signed an aged family member up for Medicare Part C because a famous Fortune 500 company with the great grand son of the founder on the board cancelled retiree health insurance, kidney dialysis was really the one pre-existing condition that they seemed to care about.
It is a common condition (to require dialysis) on account of the unfortunate prevalence of diabetes. This is the thing that they are doing while in the past you simply died when your kidneys failed.
At least, not unless you level the field entirely and let the insurance companies "insure" themselves against risks by not insuring people with, for example, genetic traits towards certain expensive conditions.
Hmm, does your idea of a "level playing field" include individuals being able to pay the same price for medical procedures as big insurance companies do?
you can't [insure] against things that have a pretty near 100% chance of happening over a given period of time
It needs repeating how wrong this statement is. As long as premiums collected (added to the earnings from investment of those premiums) are sufficient to cover costs you have a profitable venture [so that business people are willing to take on the risk] that is self sustaining [forever.] Example: If it is certain that I will pay $100 in a year, I would take on all people willing to pay me $10 a month for the privilege. If I only knew that I would make payment on a random day of the year I might bump my premium to $20 for a profit.
But as is mentioned above, insurance is better used to protect from catastrophe rather than maintenance.
Pay as you go [for maintenance] has the added advantage of improving the visibility of costs and putting the economic powerhouse of competition back into the game.
This also means that the cost of the elderly could be paid for by an annuity that was funded during their healthy life. If they never had a healthy life, that could be funded from a catastrophic plan [purchased before birth by caring parents.]
The question [like most] has always been about will rather than whether or not the problem was solvable.
Get the government completely out of healthcare and plenty of businesses would love to come in and take up the slack [to everybodies benefit.]