Health Insurance is Not Health Care

The health care financing system for most people works this way. Employers pay insurance companies for their employees’ coverage. Providers provide health care services. Insurance companies pay the providers of services.

A few obvious features of this system are as follows. You need a job to get insurance. Employers have to pay for that insurance out of their revenue. Insurance companies have to pay their expenses. Providers have to make a profit. This system is the American way to do things. It is based on the three American ideals of competition, low taxes and minimal government bureaucracy. People believe that it is the best way to keep costs down and provide the best health care in the world.

This system has a few problems. First of all, you need a job. At one time that might not have been such a big deal. Now it means you are indentured for health care. You’d better not be without a job.

Second, your employer has to provide health insurance. Fewer employers, especially small businesses, can afford to provide it. Even large companies, such as the car companies, are less competitive in the global economy because of the cost of health insurance.

Next, your insurance company has to pay the bill. Since each bill it pays reduces its profit, it has an incentive not to pay. Insurance companies have many ways not to pay for your care. If you have a “preexisting illness,” they might deny coverage. If you are injured “on the job,” they want your “Labor and Industries” coverage to pay. Your employer, by the way, also has to pay for that insurance. If you are injured in a vehicle accident, they want the vehicle insurance to pay. It you become disabled, they want you to apply for Medicare. If you have “double coverage,” each might want the other to pay. If the two don’t “coordinate benefits,” one of them won’t pay anything.

If none of these “cost saving” techniques work, insurance companies have other methods. They can decide that your treatment wasn’t medically necessary. They can decide that you didn’t get the proper referral.

That’s free market competition. What about minimal government bureaucracy? How many laws do you suppose have been passed to make sure your employer provides your insurance? How many “bureaucrats” do you suppose are making decisions about which policies you can have and how much your insurance company will pay? Do for know how complicated and expensive it is for providers to bill for their services? Would your employer be able to compete better if it didn’t have to pay for health insurance?

We still don’t have to increase taxes to pay for health care, right? We pay insurance companies about 20% of our premiums for overhead. Medicare only skims off about 2%. When someone without insurance gets sick, “society” pays in some way. If our taxes did pay for our health care, would we still have to buy private insurance?

So, do we get the best health care for our buck? We have the most expensive health care system in the world. By most measures, however, our health is worse than in most other “first world” countries. If you lose or quit your job, you join the uninsured. If your employer closes down, gets bought out, or downsizes, you could also join the uninsured. If your provider’s practice gets bought by a big organization, you’d better like the change. If your provider gets fed up with the system and decides to go to a “cash only” practice, you’d better be rich. If your provider gets fed up and retires, or goes broke and closes down, you’d better find another. If you become disabled and go on Medicare, you’d better hope your provider accepts it. If you are injured “on the job” or in a vehicle accident, you’d better like your attorney. What if you need a specialist who isn’t on the right “panel?”

If, however, you own stock in an insurance company, you can thank your lucky stars. From Bush’s inauguration until November 7, 2008, most people’s real incomes have been stagnant or gone down. The Dow Jones Industrial Average has gone down 21 percent. Aetna’s stock price, however, has gone up 67 percent. UnitedHealth Group’s has gone up 204 percent. Humana’s has gone up 312 percent. In 2006 their CEO’s were paid a combined total of 44.89 million dollars. I don’t know how much their lobbyists were paid or how much our Senators and Congressmen have made for keeping us free from higher taxes and government bureaucracy?

Does this system make sense? At least it’s not “socialized medicine.”

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