Thursday, August 13, 2009

Insurance - Health and Other

There is an unspoken undercurrent in the health care debate and it really bothers me.

"If someone is poor or simply unhealthy due to misfortune they should die."

That is the core of the arguments against health care reform in the US. Oh sure, the arguments look like anti-communism or anti-socialism, but at their base this is that argument.

I don't want to argue about whether that value is "right." It's really a case of individual choice and what each person thinks is right. I do think however that that is where the discussion should be--about real values.

The entire purpose of insurance is to "spread risk." People take on a certain, small expense in order to avoid an uncertain, but potentially much greater expense. In the health care system in the United States, if you happen to work for a large company that has a fair amount of clout, you get health care. It may not be cheap, and it may not cover everything, but you will be protected from the big stuff. They won't drop you or deny you coverage.

If you chose the wrong parents, or simply were unlucky in life, you may not be able to get coverage, and even if you do, you may be dropped on a technicality. Yes you do have legal recourse maybe, but it doesn't do you much good if you are already dead.

I don't want to pain insurance companies as "bad guys." They are simply agents trying to maximize profits. They are doing the right thing for their owners the shareholders, but...

Is that where we want to be? Do we say to someone that they can die simply because of an accident of their birth. In all likelihood, many of the people would get some coverage in any case. Hospitals do take on some charity cases. Government does cover some people who are not otherwise covered. So we do pay for this. The real questions are, "what are our values as a nation?" and "how do we best represent those values at the lowest cost?"

So here are some of the questions you have to consider:
1. People who leave their jobs, voluntarily or not, run the risk of not being able to get medical coverage due to pre-existing conditions. Some of these people will die because of that. Is this what we want? What if it were your mother or sister?

2. Your insurance company has the power to simply refuse to pay for your medical treatment. Sure they must have "grounds" to refuse, but we have all heard stories of really shaky grounds. If you have been paying for insurance, should insurance companies have a right to refuse payment for treatment or to discontinue your insurance during the course of treatment. The "conservative" argument is that you have the right to challenge that in court, or that companies that engage in that behavior will lose business. People have died and will continue to die because of that treatment. Is that where we want to be? What if it were your father or brother?

3. Many of these people end up getting care anyway. Paid for by hospitals, reduced fees from doctors, government agencies. Hospital and doctor fees get adjusted upwards, taxes increase. you didn't think that 2 aspirin in he hospital really cost $120 did you? We all pay in some way through increased fees. We are currently simply in denial about this aspect.

4. Insurance companies exist to take in more money than they pay out. They have shareholders to please. A significant portion of their money pays for marketing, administration, and dividends. Would it be acceptable to say, increase administration costs, and at the same time remove the marketing and dividend cost? More of the money we pay would go directly to coverage.

5. Do you think the free market is really working here with the health insurance companies, or have they been able to erect high barriers to competition? In a perfect world, the competition would drive companies to lower fees, reduce administrative costs, and be customer-centric in its payouts. We are far from that perfect world. Health isnurance either needs to be brought into a more competitive realm with better protections for sick people, heavily regulated in cases where competion cannot be established, or eliminated by going to a single-payer option.

6. I have seen a number something like 46 million people are not covered today. One argument is that many of those people choose not to be covered. Who are those people? Healthy young people who have never been sick. What happens as they age and do get sick, or get in that car accident? Is it ok for ambulance companies and hospitals to just turn them away? What if someone has insurance, but cannot in that moment be identified? Is it ok to take the tough luck approach on them? I hope that when the crunch comes it's not any of my kids.

7. There is a fundamental conflict of interest with insurance companies between providing health care and making money. I believe that most people in the health care industry have a conscience and are reasonable. "Most" is not enough. Is it ok that rewards for people in the health insurance industry are misaligned with your goal in purchasing health insurance.

Remember. The tragedies are individual and personal. Half of all personal bankruptcies are at least partly the result of medical expenses. The typical elderly couple may have to save nearly $300,000 to pay for health costs not covered by Medicare alone.

If you are lucky enough so far to have picked the right parents or career or company, good for you. but remember, luck changes. Your spouse, parents, and children may not be so lucky. Is that the world you want to leave?

Learn about what health care reform really means. Do not trust the talking heads on CNN or Fox. Think about the tragedies in the context of what could be or could have been. Have some humility. Put the tragedies in the context of "There but for the grace of god..."

Read about the insurance industry. Andrew Tobias wrote an excellent book about insurance.
Invisible Bankers: Everything the Insurance Industry Never Wanted You To Know

Whereever your personal values lie, bring the discussion to the meaning and implications of your position. Big sweeping generalizations about the American way do not capture the personal nature of this issue.

Nicolas Kristof editorial about "Health Care That Works"
David Brooks editorial "Let's Get Fundamental"
Sad story about a 32 year old who could not get health care