The Problem With Health Insurance

Don’t worry. This is not another piece about Obamacare. Instead, we’ll go back to basics, and see if health insurance can ever satisfy the demands of the payers, the providers, and the patients. It’s not as if people haven’t been working on this for awhile. The notion of health insurance stems from the so-called “friendly societies,” and dates back to the very dawn of the Industrial Revolution.

Arguably, those associations can trace their own origins back to the burial societies of ancient Greek and Roman artisans. In the Middle Ages, they morphed into the trade guilds of Europe, and expanded their mutual assistance programs to cover the financial burdens of illness.

But the founder of modern health insurance is Otto von Bismarck, chancellor of Germany, who in 1883 passed the Reichsversicherungsverordnung (Reich Insurance Act). As such, it became mandatory for certain segments of the workforce to pay premiums in support of sickness funds. This effort, and the rest of its early social welfare programs, was a means for the government to counteract the appeal of Communism, especially to those on the lower economic strata.

However, it would take another German chancellor–better known than von Bismarck–to inflate this concept into universal government-controlled health care. His name was Adolf Hitler. It must be noted that Hitler was quick to see the potential in such control...

I find that “Coach” is full of crap about half the time.

It’s pretty simple: humans are going to get sick, injure themselves, and eventually die. If as a society we choose not to deny care (i.e. turn people who don’t have a way to pay for medical services away at the ER door), the cost of their care is going to have to be paid for by “other people”.

Under the present system and under Obamacare, insurance pays for most of it, one way or the other. Local CEO tells me they end up getting 9 cents on the dollar billed to Medicare — the rest has to be spread over the costs billed to insurance companies. Obamacare doesn’t address any of the underlying causes for high healthcare cost any more than the existing system has done. It just adds more people to an already-broken system.

When (not IF) Obamacare crashes, we will re-make the same decision all civilized countries have made, and not turn sick people away at the ER door. The only entity that has unlimited ability to pay is the Federal Government, because it owns the money printing press. And so we will end up with single-payer in the end.

The only way to avoid this outcome is to radically attack the underlying causes of high medical costs - including fraud, abuse, legal liability, and more. That will take an unprecedented level of cooperation and putting politics aside, and I don’t expect it to happen.

But we can wait and see what “Coach” thinks....

The whole idea of Insurance is Many Payers - Few Users.
Auto Insurance is based on the notion that only a small minority will need a payout, for accidents that are relatively rare.
Health care is a completely different beast.
It's not really Insurance any more, it's everybody pays for everyone else.
If we were to mandate Auto Insurance that covers checkups, oil changes, tires, all repairs and compensation when the car eventually breaks down anyway (in addition to accidents), then insuring a car would cost more than the car itself.

The state of one’s personal health, and that of those with whom there is an affiliation through family or community, is by its nature a very personal and local phenomenon. It cannot be accurately diagnosed or treated by another removed from this close affiliation, and when there is a consideration of something called a “cost-benefit ratio”.

Health insurance schemes both remove this degree of affiliation, and make the “cost-benefit ratio” paramount in all treatment regimes. Fortunately, humanity is blessed by a homeostatic relationship with the environment, with the general level of health being largely dependent on the conditions in which the individual is living. Improve personal environment, and the state of health responds accordingly. Because of the self-correcting nature of human metabolism, most physical disorders will resolve fairly quickly, with nothing more than applying a certain degree of regimentation to the immediate surroundings.

Only for truly catastrophic situation, should the concept of insurance (REAL insurance, not a wealth-transfer scheme) apply. Since some 95% of the personal woe the individual may suffer is self-induced, it is incumbent upon EVERYBODY to learn how to recognize the consequences of bad behavior, and be prepared to accept those consequences. Either that, or behave better.

Major Medical, with a high deductible, is the only true form of insurance, everything else is either pre-paid or transferred from some other person’s reserves. Accepting risk, and responsibility, for the minor inconveniences that clutter lives everywhere, is entirely a personal duty, and one that may not be shirked, thus benefitting the community at large.

Thanks Oldpuppymax.

Otto von Bismarck, chancellor of Germany, who in 1883 passed the Reichsversicherungsverordnung (Reich Insurance Act)... [making it] mandatory for certain segments of the workforce to pay premiums in support of sickness funds. This effort, and the rest of its early social welfare programs, was a means for the government to counteract the appeal of Communism, especially to those on the lower economic strata.

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