When Replacing ObamaCare, Remember Health Insurance Isn’t Health Care

The confusion between the two guarantees that costs will rise

By William M Briggs Published on March 7, 2017

Big Louie whispers to you, “Say, Mac. The fix is in. The Redskins are throwing it to the Browns. It’s all set. Guaranteed.”

“No, kiddin’, Louie?”

“I’m tellin’ ya. Now listen. I want you to bet me the Skins win.”

Wha…? But you just told me ….”

“You aren’t paying attention. What’s wrong with you, Mac? You want trouble? I said the Skins will lose and you will bet they’re going to win. Now gimme sixty bucks that says the Skins will win.”

“Hey! You don’t have to be so rough …”

“Say, these twenties are new! Considerate of you. Listen. Don’t be so glum. You’re contributing to a good cause: me.”

What Insurance Is

Any of this remind you, Dear Reader, of the insurance business? It shouldn’t. Yet the word insurance has undergone a strange metamorphosis, which is caused, as you won’t be surprised to learn, by government.

Insurance used to be a bet you would make that you hoped you wouldn’t win. You went to an insurer and made a bet that something bad would happen, say, you got cancer or your house would burn down. The insurer figured out how much it would cost to pay you to fix the bad thing. He then said, “Okay, gimme Y dollars, and if the bad thing happens, I pay you X.” If you didn’t like Y or X, you negotiated with the insurer until a pair of numbers were mutually agreeable — or you agreed to part ways.

But suppose you told the insurer, “I have cancer. It will cost X to treat. I want to bet with you that I get cancer. What’s the minimum Y I should pay you?”

The insurer would either laugh you out of his office, as he commiserated with you about the sad state of your health, or he would pick a Y greater than X. Why? Because it was guaranteed that the insurer would pay out X. Why would he ever take an amount less than X? 

The Government “Fix”

Because government, that’s why. Because your cancer is a “pre-existing condition” and it was seen as cruel and heartless for the insurer not to lose money on your behalf. But government forced the insurer to lose money. Government enjoyed playing Robin Hood. Hood as in criminal, crook, confidence trickster (did you not know that? Big Louie knew).

However, because the entities that comprise government move in and out of insurers (and their banks), the government also took pity. Government knew insurers had to make up their forced deficits. So it mandated that citizens who did not want to make a bet with any insurer had to give the insurer money for bad things that would almost never happen. ObamaCare became Big Louie muscling twenty-somethings to insure themselves against Alzheimer’s.

Thanks to Supreme Court Justice Roberts, you being forced to fork over funds to a private entity was called a tax. (Same thing Big Louie calls it!) Thus, not only was the word insurance gutted of most of its actual meaning, so was tax. Orwell lives.

Of course, insurers assisted in their own demise. They, like everybody else, were happy to let folks conflate the incompatible terms health insurance and health care. Once people could no longer keep these separate in their minds, the end of insurance was guaranteed.

What Insurance Isn’t

Insurers blurred these distinctions by separating themselves from the purely betting side of business, by dealing with people’s employers and not people (a condition ensconced by further Government mandates), by paying doctors and hospitals and not people, and by writing blanket instead of specific contracts. It came to be seen as normal for a person to expect “insurance” to pay for their kid’s visit to the doctor for sniffles.

Having the sniffles is almost guaranteed; it is thus numerically no different than a pre-existing condition. Having an insurer pay out on these “sure bets” meant that an additional layer of bureaucracy had to be built to handle the paperwork and shuffle funds around. Insurers unwisely moved to make a profit on these sure bets, which caused them to be penurious when paying out on large claims. Doctors had to increase their staff to handle the busywork. Monies that would have gone to pay for “bettable” diseases had to be diverted to pay for aspirins and bandages. Every step along the way caused premiums to be driven higher.

Now no one understands the true cost of care. Worse, we’re at the point where the true meaning of insurance is under active attack. A recent article in Bloomberg complains that it would be better if insurers used data to calculate a person’s chance of this or that disease — which is exactly what insurers should do. The author of that article also frets that insurers might “once again [be] allowed to charge extra for pre-existing conditions, an idea currently being debated in Congress.” In other words, the author is worried that insurers might once again be allowed to do what insurers are supposed to do, and what they must do if insurance is to work.

When Congress scraps ObamaCare, they must not replace it with any scheme that confuses insurance and care. This confusion guarantees that costs will go up and the bureaucracy will grow.

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  • S Wong

    Having a Bible does not guarantee Salvation

  • Linda

    The USA is the only democratic country in the world without comprehensive health insurance for all its citizens. It’s ludicrous, and perhaps even unconstitutional. The USA is also further and further down any lists of best countries in the world to live.

    • Perhaps even James Madison is rolling over in his grave: “Knowledge will forever govern ignorance; and a people who mean to be
      their own governors must arm themselves with the power which knowledge

    • Wayne Cook

      And every single program which the government puts its fingers in, is corrupt, bankrupt and mismanaged. I’d rather go my own way. SS, which is one program the government totally screwed up is now over two trillion in debt, primarily because the government borrowed the two trillion and never paid it back. I never ever want to see them messing with health coverage!!

    • Michael Gore

      Exactly what part of the constitution says that it is our unalienable rights as Americans to be provided with health insurance?
      The reason we have such a bloated and overreaching government is that we have a citizenship full of people who expect the government to solve all their problems for them. Every time they want something, they claim it’s their constitutional right to have it, and our elected representatives are all to happy to bribe us with our own money to get votes.

      • eddiestardust

        Says someone who probably has his health care because he is employed:(

        • Michael Gore

          This is exactly what is wrong with the reasoning i pointed out. What would being employed have to even do with the claim on a constitutional right to health care? The two have nothing to do with each other, yet someone will smugly imply that people who are gainfully employed are somehow morally inferior to the unemployed and could not have anything meaningful to say on the issue.
          Many employers offer health benefits because it is an incentive for a person to seek employment at their company, as well as a powerful way to keep employees around.

          As to Linda’s comments. The economy has nothing to do with your claim that it is unconstitutional to not provide health care. It doesn’t really matter to the issue what the economy of the US or other countries are to that point. Why is it so hard for so many Americans to just think coherently? If we want some sort of single payer healthcare system like the UK or Canada (which gets plenty of positive and negative feedback from it’s citizens) then we should elect officials to write law to that effect. However there are MANY in this country who do not want such a system, and their voices count just as much as yours.
          But to try to put a claim of constitutionality on it is just intellectually dishonest.

          • Linda

            Life, liberty and the pursuit of happiness are a myth without access to health care for all citizens regardless of ability to pay.

          • Michael Gore

            Then I guess Life, Liberty, and the pursuit of Happiness have been a myth since this country was founded. Do you realize how ridiculous and anachronistic your statement is. It’s obviously false to say that one needs to have access to health care in order to be able to pursue these ideals. The right to life was the acknowledgement that Human beings intrinsically have the right to not have their life taken from them by another human being without proper justification . The right to Liberty was the acknowledgment that Human beings intrinsically have the right to not have their freedom taken from them by other human beings without proper justification. And the Pursuit of Happiness was the right for man to pursue the virtuous life without hindrance from an oppressive government.

            What you don’t want is a right to healthcare anyway. Everyone already has that, just as much as everyone has a right to buy a car, or eat food, provided that they can pay for the services they would like to receive. You want a right to demand that others pay for the services you would like to receive. That’s not compassion, it’s theft.

          • Linda

            I don’t consider it stealing when every citizen pays an equal share of federal taxes, according to their income, thereby giving every citizen access to needed medical care. As a completely healthy Canadian on the verge of retirement (there’s something else my country does right) I have paid significant taxes for 40 years, and the only medical care I have accessed is a checkup every year or two, and two childbirths. Praise the Lord! I don’t begrudge my fellow citizens the life-saving, expensive medical and hospital treatment they may need. I feel fortunate we can walk into an emergency room or a doctor’s office without ever being asked how we’re going to pay for it. It never even crosses a Canadians mind as to whether it’s in the budget to take a coughing, feverish child to the doctor, or have that funny lump checked…we just do it!!!

          • Michael Gore

            I think the issue though is that “every citizen paying an equal share according to income” is not a reality, at least in America. You only have to listen to American leftists a short while before you hear phrases of the “rich not paying their fair share”, and other class warfare political rhetoric. According to many, a wealthy person paying 40% on their income and many others paying 0% is still not fair enough.

            Now I’m not rich by any means, so I’m not trying to protect my income in that, but anyone with common sense can see that it’s not really about everyone pulling their weight, its about redistributing wealth to the leftist voter base. But the very people who make these claims that the “rich” need to do their fair share because the healthcare system is too expensive are the very one’s who broke the system in the first place by putting their leftist policies in action. They continue to buy votes with entitlement programs, all the while creating an environment that creates more poverty because it benefits them politically.

            Now they demand that everyone pays more to finance failing systems that create dependency and inflate the problem. The very name of “Entitlements” shows where everything went wrong. It use to be called charity to help a person in need. Now they are considered entitled to the support of others.

      • Linda

        In a country that loves to brag about itself, why should all its citizens not be provided with medical and hospital care regardless of ability to pay? When having a complicated delivery, or a newborn needing advanced medical care, or a child with a chronic illness can bankrupt a family for the rest of their lives, while their wealthy neighbors have any medical treatment they wish, even cosmetic surgery – this is a great place to live? Canada, Australia, the United Kingdom, Scandinavia, etc all have tax-funded comprehensive single-payer medical and hospital care for every citizen, and you’re saying these countries have worse economies than the USA? I think not.

  • Michael Dowd

    Surely this is madness. Only a Democrat could love this program the effect of which is to fully take care of people with pre-existent conditions while charging the folks without pre-existent such high premiums and deductibles that many cannot afford to buy health insurance at all. In my opinion, there should only be one kind of health insurance and that is catastrophic. People generally should pay for their own normal heath issues. If they did perhaps they wouldn’t have so many.

    • eddiestardust

      Problem is , Mike, it that it costs TOO MUCH for everything, IF you don’t have an employer. And what about older folks? Fact is that a bunch of folks are getting FILTHY rich , using the rest of us as their own, PERSONAL ATM’s..instead of working for it:(

      • Michael Dowd

        One of the reasons it cost so much is because of insurance itself which provides the medical industry a moral hazard allowing them to raise prices pretty much at will. People need to pay for their own body repair just as they do repair on their houses. Medical insurance is a good deal for those folks with lots of medical problems often brought on by bad habits. To take care of folks of lower incomes the catastrophic trigger level would be lower. My view is the medical profession has become something of a racket. I’m in Medicare and awhile back had a doctor who ordered many tests for me w/o even discussing. His office would set up an appointment and tell me to show up. I quit immediately. Medicare fraud in another reason to have Medicare be catastrophic only.

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