Friday, March 28, 2014

If It's Broken, Don't Fix It

The Los Angeles Times was asking last weekend where the stories were about Obamacare which portrayed good news for people needing health insurance. It pointed out that stories abounded regarding people who had lost their policies because they had been cancelled due to not meeting Obamacare requirements, but it wanted some stories about people for whom Obama he been a benefit rather than a disaster.

And it found one, of course. It’s hardly surprising that it found a couple who had been previously uninsured but which was now able to buy insurance, since that is precisely what Obamacare is designed to do. I’m guessing that they didn’t have to look very far.

The article listed the couple’s medical expenses at $9536 per year, and said that their insurance policy will cost them $4548 in premiums, with a $2000 deductible. That leaves $2988 not paid, and somebody is going to have to pay that money. It is not going to be the insurance company, it is going to be other people who buy policies from that particular insurance company. So this couple has not reduced the cost of their health care, they have shifted $2988 of the payment for that care to someone else.

But, you say, that’s what insurance is all about. Right? No, it’s not. That’s what socialized health care would be about, if we had it, which we should, but we don't. We have insurance, and insurance is about risk.

I have paid for auto insurance for some fifty years, and have never received the first cent in benefits from it, which is why I pay a very low rate. If you have had a wreck you pay a higher rate. If you’ve had a lot of wrecks, you pay a very high rate, and may not be able to get insurance at all. That's how insurance works.

Based on today’s health insurance model, everyone would have the same kind of auto insurance, we would all pay the same premium, and I would be paying for the damage caused by your car wrecks because it would no longer be about risk, it would be about everyone paying the cost regardless of who benefits or who created the need for payment.

Under that scenario there is no incentive for me to drive carefully. I might as well drive recklessly and have a lot of wrecks because I’m going to pay the same regardless of my behavior. I’m going to pay out if you have a wreck.

So, if I buy insurance from the same company that the couple described by the LA Times purchased from, then I am paying for a portion of their health care. If I buy from a different company then I am not. Is that logical?

With today’s mandates Insurance companies cannot know about a person’s health before selling to them and they cannot turn them down. If I buy from a company which gets lucky and sells insurance to a lot of healthy people I will pay a low price for insurance, but if I buy from a company that has the misfortune to sell to a lot of sick people I will pay a high price. On what planet does that make any sense?

But that's actually the plan. It's the whole basis of Obamacare. It is supposedly logical and reasonable that people who don't need health care should pay for it anyway so that people who are using health care will be able to pay less for what they use. They call that "insurance," but it is no more insurance than I am an astronaut. It is making people who don't need to spend money spend money without receiving any benefit for it so that other people can get more benefits for less money. That would be socialism if it were applied generally to society as a whole, but it is not. It is applied piecemeal on a basis of the corporation which one happens to patronize, so that the benefit is not only selective, but is arbitrarily selective.

It is supposedly logical that I should pay out if you have a car wreck.

Instead of “health care reform” actually reforming anything, it merely took a broken system and broadened its application. If what you are doing isn’t working, do more of it. Or do it with greater intensity. But don’t, for God’s sake, think of doing something different.

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