Greedy, for-profit health insurance is the cause of high health care costs

Not true.

Simplistic rhetoric may provide an convenient scapegoat, may make a solution to our health care costs sound easy, but eliminating insurance will do nothing to lower health care costs, nothing‼️

If you listen to the most ardent advocates of Medicare for All, you may be convinced the problem with health care in America is the insurance companies. Many people accept the fact that a company that agrees to pay a portion or all of your medical bills also controls the health care delivery system and health care providers. We simply cannot make the distinction between the health care services we receive and their cost and paying the bill. Health insurance premiums are not health care, but the premiums reflect the cost of care provided to the insured.

Look at it this way. You have a community of one thousand homes. Each homeowner has homeowners insurance, but since they are in a tornado area, the risk of loss is high and so are the premiums. Some homeowners elect a high deductible to lower premiums. The insurance company gives a modest discount for certain structures likely to better withstand a storm. The premiums are set to cover potential losses based on the risk posed by the insured, to build a reserve should there be a large number of claims and to make a profit. Then, a tornado hits wiping out 800 of the 1,000 homes.

The insurance company reserves are used to pay claims, the 800 homeowners no longer have something to insure so don’t pay premiums, that years profit may be gone and what will it take to recover? Higher premiums. Sadly, the 2020 pandemic may be our health insurance tornado.

There is no difference between homeowners insurance and health insurance … except we are incapable of making the distinction between health care and health insurance and deep down we do not believe we should pay our own health care bills.

The popular rhetoric that blames all our health care problems on health insurance misses one major fact. Most Americans are not covered by any health insurance.

As of 2015 60 million Americans were covered by employer health benefit plans that were self-insured or mixed insured (some benefits self-insured or using stop loss coverage for catastrophic claims).

70,609,251 individuals were enrolled in Medicaid and CHIP in the states that reported enrollment data for December 2019.

60,000,000 individuals are enrolled in Medicare

9.5 million individuals are covered by TRICARE, the plan for active military and veterans.

28 million Americans are uninsured.

In other words, about 237,609,251 Americans (over 72%) are not covered by health insurance. In addition, in most cases proposed premium increases are reviewed and must be approved by government agencies. Overly expensive plans can be excluded from ACA exchanges.

One comment

  1. As proof of how insurance premiums are set by risks, today several American car insurance announced refund or rate reductions. Allstate reported today that driving mileage is down 35-40%. Less driving means less accidents. Less accidents, less they have to pay out.

    Now imagine if there was an unexpected midday ice storm over 50% of the US. Just think of the number of car accidents from the people trying to get home. I’m sure that the following year, rates would go up. We are seeing our healthcare ice storm now. Get ready for salt in your wounds next year.

    Like

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