Saturday, July 20, 2013

Real vs. Our Pseudo Health Insurance

Dr. Beth Haynes has a great piece over at The Huffington Post titled Almost All Americans Lack Health Insurance. Haynes addresses an often side-stepped question relating to the healthcare debate: What, exactly, is health insurance? It's an important question, and as the title states, few of us have real health insurance.

Real insurance, she notes, "is designed as a means to pay for unexpected, unpredictable, very expensive occurrences outside of the control of the policyholder." That is not what our current, government controlled health insurance does. Instead, "insurance" covers myriad routine expenses that would never be included in properly structured insurance.

This state of affairs has destructive consequences for our healthcare. Haynes explains:

Thanks to this quirk, when we are at our most vulnerable, we are less protected. The bottom line: Our premium dollars will only cover so much. Requiring first-dollar coverage for predictable, relatively affordable expenses leaves fewer funds available to cover truly catastrophic events. And that means "insurance" companies are forced into skimping on items that could and most likely would be covered by real insurance. This trend is severely eroding our ability to protect ourselves from medical disasters.

Haynes goes on to cite a specific example of this aspect in practice; premature infant care. She provides evidence to show how insurers and doctors are increasingly pressured to skimp on expensive "preemie" care in order to have the money to cover mandated routine expenses like normal births and well-child checks. 

I left these comments:

The reference to premature infants is very personal to me.

My granddaughter Madeline was born at 25 weeks. She spent the first 2-1/2 months in a hospital NICU, followed by in-home care for a period. The insurance company paid what they were contractually obligated to pay, which ran into the six figures. My daughter and son-in-law paid only about $4000 out of pocket. That's what insurance is for.

Yet, under any government controlled, central planning schemes like ObamaCare, "premies" like Madeline, now a healthy 10-year-old, will be killed off by "cost effectiveness" death panels (except for those born to the very rich); so that others can get "free" annual checkups, birth control, flu shots, or teeth cleanings.

Great article!

In answer to StillRockin77, who  wrote:

“Until we eliminate private health insurance companies from the equation, we will NEVER have an effective health care system in this country. PERIOD.”

I replied:

StillRockin77; People have a fundamental right to organize insurance companies and sell policies to willing buyers. It's called freedom of contract, a form of voluntary association. Anyone who disapproves of private insurance is free not to purchase private insurance. No one has a moral right to forbid other consumers and the company from voluntarily contracting.

When you say that "we" should "eliminate private health insurance companies," you are advocating dictatorship.

As Paul Hsieh notes over at FIRM, "Instead of genuine insurance, we are moving towards a system of bad pre-paid care."

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