leashyourkids wrote:
I agree with delaney on basically all counts above. But most people agree on this stuff... the question is, what is the solution? Having worked in a risk (insurance) industry for longer than I care to admit, there are some basic realities that people need to accept (plus I've had quite a few Lagunitas and I have no one to talk to)...
As with any resource, health care is finite. There are only so many doctors and nurses and hospitals and chiropractors available to provide treatment. Most of these people make a lot of money (and deservedly so)... and our current system isn't really insurance at all.
Example: the company I work for provides a lot of actual insurance... primarily to larger businesses. We insure them for their own stuff (property) and their liability for suits that third parties bring against them (casualty). These are much easier things to insure than health insurance. The reason for this is that the policies (contracts) we sell provide coverage against very specific things on an occurrence basis. An occurrence is basically any time a covered "loss" occurs to our insured's business (or a 3rd party that our insured is responsible for) as defined by their contract with us. The "occurrence" part is important because each time a customer has a loss, they must share in that loss in the form of a deductible, a limit, or something that isn't even covered under their contract. The "occurrence" principle works well to prevent both moral and morale hazards. In other words, it encourages customers not to incur losses because they have skin in the game each time a loss occurs. And because these "retained risk" mechanisms are in place, P & C insurance works well and is pretty easy (relative term) to price and to keep prices down. If the market remains rather stable and the company has a large enough risk pool, insurers can pretty accurately calculate future losses and profit from the risk pool. It doesn't always work that well, and insurers frequently lose money - especially during small windows of time - but overall, solid insurers with large enough risk pools make money from these endeavors, and the market works well.
Health "insurance" is nothing like this. Essentially, customers who are not individually priced (as they would be in P/C insurance) based on their own risk exposures are rubber stamped with approval to purchase an "insurance" product that is treated as one-size-fits-all when it should not be. Therefore, it is impossible to appropriately price and health "insurance" companies simply place a guess on how much insurance should cost for individuals based on a gigantic pool of customers. If that weren't bad enough, the "product" they sell is not insurance in that it provides an unlimited amount of health care for that standard price. In other words, it is not an "occurrence" based policy. An individual can buy a health insurance policy, subject to its terms, and literally use an unlimited amount of health care with little or no retained individual risk once they have met their deductible or out of pocket maximum dollar amount. The equivalent in P/C would be if someone purchased insurance for their business and was then able to claim money every time they had to paint or put up a new sign or put in stairs or put on a new roof without any downside to them financially. Obviously, costs for such a system would spiral out of control indefinitely, as is the case with our current health care system.
The other downfall to the health care finance system in the U.S. is that (prior to the ACA) people who use health care just didn't pay for it. Young people who went without health insurance just went to the emergency room because they got drunk and needed a gerbil removed from their ass, and they would wind up never paying the bill. Some seem to imagine that these costs just go away. They don't. We all wind up paying for it, which is what the ACA attempted to address (poorly).
Lastly, this is health insurance. In P/C insurance, if someone doesn't have insurance and their building burns down, it's tragic, but they're still alive. We aren't making a judgment call on whether they are worthy of life. The moral ramifications of a health "insurance" system are vastly different than insuring "things."
At the end of the day, when you combine these issues and consider the profit motive that drives a lot of it (and the lack of value that health insurers add to our economy or our, you know, health)... I don't see how there is any free market solution that comes close to solving it. We have to accept the fact that we are all going to have to subsidize one another's health care and that an inordinate amount of that health care is going to go to the elderly and the sick. It would at least provide an enormous pool of customers which would make health care on a national level easier to price and monitor, and it would encourage, if not force, everyone to pay at least a little toward our national health care. There would certainly be barriers in terms of efficiency and customization that would frustrate some (mainly the rich), but overall, I believe the positives would outweigh the negatives of almost any other system one could come up with.
Thoughts?
They shouldn't even call it insurance. They should just call it In Case Shit. I give you some money In Case Shit happens. Now, if shit don't happen, shouldn't l get my money back?
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