I wrote the following essay over the past several days, under the title of "The Fallacy of Health Insurance." Ralph Nader had an article in today's Counterpunch called "The Healthcare Racket" which might make many of the same points- I haven't read it yet, but you can read it here:
http://www.counterpunch.org/2012/02/02/the-health-care-racket/
-greateco
The Fallacy of "Health Insurance"
By Paul Stephens
"Insurance" is probably one of the most mis-used and falsely-advertised products or service in our current "service economy." What, exactly is "insurance?" We know what property and casualty insurance are. You pay so much a year, or per voyage, or other period of time, and this "protects" you from calamitous losses - of either your property or your life. If you have a family and up-scale lifestyle, you might want to bet that you could die prematurely, and your family would thereby "win" this bet by collecting the insurance money. That's about as far as the business concept of "insurance" really goes.
What, then, about "Health Insurance?" Apparently, nearly all of our leading political and business people seem to believe in and support this concept, without really knowing what "insurance" is, or what it can and cannot do.
I've maintained for at least 20 years - probably more like 40 - that "Health insurance" is a racket and a fraud, akin to the Mafia "protection rackets" and other forms of organized extortion.
And it should be obvious why this is so. We're not "insuring" our health when we buy health insurance. Instead, we are protecting our assets from confiscation by medical providers and their collection agencies. And even if we don't have any assets, we might want some form of "insurance" now, simply to guarantee access to medical services. Most providers require proof of insurance or other means of payment before they will treat us - something which was unthinkable even 30 years ago.
This, of course, is the "business model" which hospitals and clinics use. Somehow, they have gone from being a public service to the most predatory and exploitative kind of business - speaking technically, a "coercive monopoly" which prevents using alternatives (drug laws, medical licensing and accreditation laws) while maximizing its own revenues with pricing which has little or nothing to do with real costs, but everything to do with price discrimination and making sure that such payments (revenues) are maximized for the providers.
Yet, somehow, that never gets mentioned! We all know cases from our families and friends, if not ourselves, where they're in the hospital for a few days and come out with a bill so astronomical that we should laugh at it. I'm talking, now, like $20,000 per DAY for a bout of pneumonia or a heart by-pass surgery, with all the meds and dressings itemized at perhaps 10 times or more their real cost. If you're on Medicare, you'll get something like an 80% discount - that's all that Medicare will reimburse for this. "Good" private insurance might result in a two-thirds discount - the $100,000 bill will be paid by the insurer to the extent of $30,000 or so, with perhaps some deductibles or co-payments required to be paid out-of-pocket, or by "supplementary insurance."
If you're indigent, and on Medicaid, the "providers" might get reimbursed $10,000, but don't expect very good care. Still, that's close to the real "marginal cost" and thus "free market price" which all cash payers should be able to negotiate for, except that as a coercive monopoly, our present "non-profit" hospitals don't have to negotiate with anyone. And they have dozens of lawyers and other bill collectors to back them up. The independent physician or private clinic has always been willing to do some negotiating, but now that everyone is "covered" by something or other, they have no incentive to charge fair prices to ordinary people with working-class incomes.
So, where exactly does "insurance" or, especially, "Health Insurance" fit into this picture? Nowhere, obviously. You don't have property, so you don't need to insure it against fire, theft, or bill collectors, right? You don't have a cash income, so you don't need to "protect" your survivor's "rights" to it. (But your estate, if any, will be pillaged by the hospitals and doctors who provided your final health care - probably more than all the rest you spent in your entire life). So, you'd better have insurance or else dispose of your property ahead of time - even that can be traced and recovered (confiscated) under our present bankruptcy and inheritance laws, though.
Yes, you may need healthcare - the services of a physician, hospital facilities, drugs, dressings, crutches, wheel chairs, etc. Where do they come from? They've always been provided both publicly and privately. Doctors and nurses are trained to treat everyone, regardless of wealth or "ability to pay." You pay what you can, volunteer if you can't, trade work or other services, etc. Which all works fine in a free society with free markets and strong "family values" like church, community, being one's brothers' keepers, etc. We all help out, and help is there for us when we need it. The American Way.
In case you hadn't noticed, that's not what we have, now. We have a bureaucratic nightmare dominated by multi-billion-dollar corporations and executives who live under guard in gated communities. We live in a system of economic totalitarianism - call it "gangster capitalism" or whatever - and we must pay everything we have and always depend on the State and corporations to provide us with necessities - think of North Korea. That is what we have HERE and NOW.
I just listened to an hour of discussion on the Helena Public TV channel which covers the interim legislative committees' business. With the "Affordable Care" bill, insurance rates are spiking, as everyone knew they would (insurance companies now have to cover pre-existing conditions and other higher-risk groups), and some of the groups which are being forced to buy the resulting defective products are revolting. College students, for example, must either have proof of health insurance, or buy the university system policy for some $840/semester - which they assure us is a bargain rate - far below "the market price."
But if you're forced to buy it, there is no market price. How YOU value it, as a customer, may be on the order of $20, or nothing at all, since you will still have to pay out of pocket up to some deductible, as well as co-payments, and the cap for "benefits" under this policy is now $50,000, whereas last year, it was $200,000. So, basically, the insurance is totally worthless to the student, but very valuable to the local medical establishment, which is sure to get paid off in case of a car wreck, skiing accident, or whatever.
In effect, the $840/semester is an added tuition fee or even a tax from the student's point of view. And it will no doubt result in a significant number of students dropping out or taking less than 4 credits per semester (which exempts one from the requirement). Someone, it may have been Ms Stearns, the Commissioner for Higher Education, pointed out that they presently have a "soft enforcement" policy for this requirement. Thus, just about anyone could "opt out" pleading poverty or whatever. So, that's why this policy hasn't done a lot of damage already. But never fear: the discussion thereafter included "tightening" up the "enforcement" of this policy, as though that were a "solution."
One used to only read about stuff like this in Orwell or Kafka. We laughed at the idea that America could ever be like this. Well, it is, and hardly anyone is laughing about it, now.
And of course we are hearing the same sorts of promises from the State Auditor candidates, whose business it is to regulate insurance (but not medical services) in the state. Indeed, one wonders who, if anyone, regulates the medical business at all! Obviously, they are guilty of numerous business practices which, in any other field, would be illegal and closely monitored by the Attorney General, if no one else, as part of the Consumer Protection bureaucracy.
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