Nathan Sass

The Truth You Will Never Hear from the Political Class

In Economics, Health Care Reform, Politics on October 14, 2010 at 5:00 AM

There is an elephant in the room, and no one in politics has mentioned it.

Health Insurance even before Obamacare is, actually, socialist.

In the health care reform debate, we have heard the right rail against “socialized medicine” and that Obamacare puts us on a path to a single payer system.  They are correct in saying so, but they neglect to mention the other side of that coin.

Even after repealing Obamacare entirely, we were still operating in a largely socialized system of health insurance.

Health insurance is nothing like any other form of insurance product.  Life, disability, homeowners, renters, auto and almost every other insurance product exist to protect against a catastrophic event, and most people never use them more than a few times in their entire lives.

Health insurance, and to a lesser extent dental insurance, are products that are transactional and are used heavily by holders of policies, usually multiple times per year.  This is an essential distinction and critical to understanding why I contend that health insurance today already is a socialist entity.

Just imagine if people used their auto insurance the same way they do their health insurance.  Everything from new wiper blades to oil changes to engine repairs would be covered.  People would have no reason to shop for the best price/value for any service and the service providers and parts dealers would catch on quick.  Pretty soon there would be no more $20 oil changes, wiper blades would be $50 each, and you car insurance premiums would rise dramatically every year.

When you buy a health insurance policy, the company evaluates your financial risk to them based on certain factors, but in most cases the policies are written for groups of individuals and the insurance company can only project claims costs with an educated guess. 

(Individual policies are very different, but make up a small part of the health insurance market and are generally far more expensive with rates determined on your individual risk.)

After members enroll, they pay a monthly premium, and are entitled to use their coverage for almost all medically related transactions they will conduct over the year.  Everything from office visits and prescriptions to major surgery is billed to and paid for by the insurance company, with no impact to the premiums in that year.

Or in short, you put in a relatively little money and get to use as much as you need/want.  Sounds like socialism to me.

There is very little difference between a private insurance system today and a single payer government-run system.

One charges “premiums”, the other charges you “taxes” .  Both rely on overcharging some people to pay for others.   Both ration care to reduce costs.  Neither gives you true control over your care.  Both establish “approved” provider networks and will refuse to pay for treatment outside that network.  Both ultimately rely upon either ever-escalating “premiums”/”taxes” or severe limits on care or risk total financial collapse.

The only substantive difference between the two is that you can at least “fire” your insurance company, and move your business to another.  But in the end you are still in the same type of system and there is not much real difference.  It’s like changing your seat on the Titanic.  You are still going to drown, but the view might be a bit better for a little while.

All the Progressives have to offer when they propose a single payer model is changing the name of the insurance company from “United Healthcare”, “Anthem” or “Blue Cross Blue Shield” to The Department of Health and Human Services.  The business model remains largely identical, and all the problems we face in rising costs and restricted care remain unaddressed and magnified because now there is no way for you to fire the insurance company.  It’s now a monopoly and you will pay and do what they tell you to.

That last bit is why the Progressives love single payer so much.  They aren’t truly interested in solving the real issues people are upset about, and just want to “protect” the individual from making stupid decisions.  (They think you are generally dumb, remember.)

What I find so discouraging about the entire health care reform debate is that neither party has shown any desire to acknowledge the truth and really solve the problem. 

When approaching people about the plan on this site, I have been greeted with almost total silence, even from “free market conservatives”.  The lone exception has been WI 4th Congressional District GOP candidate Dan Sebring, and I think that is to his great credit.  He is pointing to the elephant in the room, while the political class just continues to look away.

Solving the problem requires a system where each person pays for the health care they consume, and at the same time protects them from catastrophic events and large medical expenses that drive them into bankruptcy.

It’s time to tell our politicians to tell the truth on health care reform, and create a real free market health care system.

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  1. Good article

  2. Socialist choices: Obamacare or our current system of limited (monopolized)insurance provider choice. So true! Without true free market choice, we will continue to held hostage either way.

  3. […] In this space, time and again, I have written about the nature of the problem of the costs of health care.  (Read more here, here, and especially here.) […]

  4. […] In this space, time and again, I have written about the nature of the problem of the costs of health care. (Read more here, here, and especially here.) […]

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