If Insurance Didn't Exist...
Posted by Joe Rivett on 06.25.2009
Instead of debating the nonsense of whether or not to have a public option, single payer, mandated, etc, why not ask the question of why there is insurance?
In order for an insurance company to make money, they need to take in more money than they spend on their customers; therefore, they have to rip you off. In addition, they have to spend YOUR money so that they can advertise, pay bonuses, pay workers, fight legal fees, and lobby Congress. How much of YOUR money goes back to YOU? Now of course if you get real sick, you end up ripping them off. That is assuming the insurance company will cover your sickness. The same applies to car warranties. According to Consumer Reports, more than likely it is a rip off. Car insurance? I paid $136 a month for a used Ford Escort. Allstate was in good hands with me.
Imagine if we could keep our money instead of paying insurance. To cover a family of 4, let's say insurance costs about 10,000 dollars a year. If you could keep what you pay and your employer gives you what they would have paid, you can start a nice account. Let us also assume that car insurance takes another 1,500 a year out of your wallet. So after 10 years with no interest, I would have 115,000 bucks!
Now of course I would have to pay for doctor/medical visits out of pocket but I doubt I would be spending that much. Plus, if no one had insurance, medical providers could lower their rates because they won't have to hire people to deal with insurance companies. For example, my chiropractor billed insurance companies 45 dollars a visit but charged me 25 dollars because I paid cash. Medical providers bill more because they know they can get more. The same also applies with colleges. Why do colleges charge so much? Because they know student loans will cover it. If no one could get a student loan, colleges would have to radically lower their prices or be out of business.
So you may be thinking what about the poor and the elderly. I'm not suggesting we get rid of Medicaid and/or Medicare. I don't mind paying my Medicare tax because it takes care of my elder family members that I can't afford to take care of. I also don't mind my tax money going to Medicaid because I really don't expect people that make under 800 bucks a month to afford health care coverage.
What if something catastrophic happens? Well, in my perfect world, I'll have a lot of money saved up when I was healthy to deal with unhealthy times in addition to the price of treating catastrophes will likely go down. I'm sure more charities would also be established to help people pay for costs. Imagine a church taking a second collection for a sick member. If necessary, you could take out a health loan; isn't your health just as important as a car, education or home?
Without insurance, we would all probably live healthier lives. If you knew you had to pay for your lung cancer treatments in full, you might not smoke. If you knew you had to pay for bypass surgery in full, you may not eat that donut. If you knew you had to pay for that broken leg, you might stop doing Jackass stunts in your backyard! If you didn't have car insurance, you might not tailgate or talk on a cell phone. I lived without health insurance for five years. When asked to play tackle football before a Bills game in the parking lot, I declined. When I got sick, I went to clinics set up for people with no insurance and they charged a lot less than a primary doctor would have.
The problem with insurance is that the companies turn a profit which means they have to rip you off. I don't know why they need to turn profits because it is not like they need to innovate a product like a computer or a car company. Of course this is all just a semi-libertarian wet dream, and this would never happen. Instead the Liberals will whine that the health bill doesn't go far enough and the Conservatives will whine that we are the USSR. I'll be shocked if my premium goes down.
Al Bundy said it best, "Insurance is like marriage, you pay pay pay, but never get anything back!"
Posted By: Bryan Jones (Guest) on June 24, 2009 at 01:54 PM
Forgive me for being Canadian, but $10,000 a year for insurance? Not including car insurance, since you added that on top; or medical, since you said you don't mind paying for medicaid and medicare. Seems a little high to me. For mortgage insurance, home insurance, and car insurance I pay maybe 3500 a year on the high side. It seems pretty unrealistic that Americans pay $10000.
Also a question for you. Your plan is great in theory I suppose. If I had a fund of $100000 I might be able to support my needs that would insurance would normally cover. But that means you can't need insurance for the first 10 years. What if you get in a car accident in year 1 and you only have 10,000 in the fund? What if someone sues you for a million dollars because you hit them with your car. Are you ever going to have enough resources to cover that? No I dont think so.
I agree with you that insurance companies gouge everyone and are essentially evil. But they are a necessary evil. It needs to be there just in case.
Posted By: Guest#4911 (Guest) on June 24, 2009 at 02:16 PM
I skimmed this at best but the beginning I did read. I love your idea that, oh my god, the insurance companies have to make money. The fact that you reference that as "ripping us off" seems very silly. Exactly what businesses out there aren't ripping us off then since I don't know of any companies (with the exception of government supported ones) that offer all of their services at cost. I immediately stopped paying attention when you began with such a ridiculous idea.
Posted By: ChErikS (Guest) on June 25, 2009 at 11:28 AM
The problem is dumbasses wouldn't save their money to cover those expenses. So let's say someone rear ends me and severely injures me. He's completely at fault and I sue. If they don't have any money or insurance, I'm shit outta luck and have to spend all of my cash on my injuries that were caused by someone else and all I can do to the other party is get a basically uncollectable judgement against them, which they could almost certainly discharge in bankruptcy. As much as I hate paying for insurance, we do need it.
Posted By: MattL (Guest) on June 25, 2009 at 11:33 AM
The courts would be clogged with people suing each other over car accidents if we didn't have insurance.
If you can't afford to insure a vehicle, then its a clear sign you can't afford to own a vehicle.
Posted By: Mikel (Guest) on June 25, 2009 at 12:45 PM
Insurance is supposed to operate under the principle that we all pay in so whoever is the unlucky one to face a disaster, they're not wiped out.
The problem is there are more and more people where an unexpected bill that would be minor to the majority of us is enough to keep them from making the rent. Not those wasting money and then claiming to have none left for priorities, people who work but are legitimately poor. Such people can't afford the insurance despite needing the protection more than most of us who could cut a check for an ER visit and tighten our belt if we had to.
So the REAL question is whether those of us who can afford coverage are willing to pay to insure those who can't.
Beyond vague willingness to embrace a public "option" is the price tag, which is being kept from us. Employers will stop offering expensive coverage without increasing salaries to compensate. The public rolls will balloon far past 50 million, and suddenly the total cost will skyrocket. The government will tell us to just take it, or else no one has health insurance at all because it's too late to turn back to the system we have today. So in the end we will pay more for an inferior product.
In principle I embrace universal health care. In execution, I don't believe for a moment the U.S. government can administer such a program competently.
Posted By: Shockmaster (Guest) on June 25, 2009 at 02:48 PM
ChErikS-
The "rip off" doesn't come from insurance companies making a profit, it comes when people (tens of thousands a year) get a disease, or get diagnosed with a condition, and the insurance company turns down their claims. The companies say it's a preexisting condition, or that their treatment is preventative or experimental. When a person pays 6,000 to 10,000 a year for something and then it doesn't do what it is supposed to do and the consumer can do very little to fight it, it is, without a doubt, a rip off. It should be criminal.
That's why I like the idea of a non-profit insurance company. Without the giant bonuses for upper-management and the need to keep stock prices high people might actually be able to afford insurance, and the company wouldn't have screw people over in order to turn a gigantic profit.
Posted By: John (Guest) on June 25, 2009 at 03:41 PM
You go to a chiropractor.
If you don't like insurance by definition, don't by it. Moral hazard cannot be eliminated.
Posted By: admChesterMynutz (Guest) on June 25, 2009 at 05:55 PM
I don't think a public insurance option is all that bad. What they do in South Korea is a pretty good example of what we should move towards: there's a government insurance "company" and private insurance companies. Every business has to be covered by somebody, so companies either pay an insurance tax and are covered by the government or they can buy private insurance and are exempt from the tax. Everybody working (and their family) is covered by some kind of insurance, and everybody has access to medical care. The need to be able to provide medical care to everybody means that there are lots of small clinics which provide a huge amount of employment. I work for the school district so I'm covered under the public option, which has been really nice. They take a small amount of tax out of my paycheck every month and whenever I need to visit a doctor all I have to do is flash my insurance card - no adjusters or bureaucrats have to get involved. As a result of this system people are generally healthier than we are in the states (people here even go to the doctor for a common cold, which blew my mind).
Now, you could argue that the quality of care isn't as shiny as it is in the states (which may or may not be related to the insurance system), but I'd rather have total access to average health care than no access to wonderful health care.
Posted By: Guest#0948 (Guest) on June 25, 2009 at 06:15 PM
i thought about that a long time ago but the risk factor of an accident happening is very high.
Posted By: Mr1700 (Guest) on June 25, 2009 at 11:34 PM
This is utter rubbish. Perhaps Joel Rivett would like to explain how a 39 year old man with high blood pressure and Bi-Polar disorder is going to be able to self fund his maintenance treatment and the inevitable lengthy hospital stay that will occur from one or both conditions. If they take away his insurance plan today, he has no saving for this. Let's assume he pays $15,000 for insurance today, but he's utilizing at least $10,000 per year, and that's without a major stay in the hospital.
Now. let's include his wife and kids. And let's take into consideration his wages. Nope, let's not talk about a poor person, let's talk about an upper middle class guy. Assume this guy makes in the neighborhood of $150,000 per year. His insurance and health costs are already 10% of his pre-tax income. How is he supposed to save money to self fund his health care until the inevitable catastrophic hospital stay?
This is why insurance exists. You never know what is around the corner and when you'll experience. It's the height of arrogance to think that nothing could happen to you until you have $100,000 in the bank. And BTW, that's absolutely chump change. If you put away $10,000 per year, it would take you 100 years to build up a saving account that would pay for a stay in the hospital of about a month.
The execution of insurance may be lacking, but the business itself is quite necessary. It was the creation of voluntary shared risk that allowed Capitalism to take off centering in Italy and England in the 1400's. The world would still be sailing in wooden sailboats and riding horseback while dodging highway robbers try to get to the neighbors farm to help him rebuild the barn that the constable tore down because he didn't have enough goats to pay his taxes.
Posted By: Obama Epic Fail (Guest) on June 29, 2009 at 04:56 PM
This is the main problem with the insurance debate. People seem to think that the only options for people are to 1. go without insurance, 2. have a monolithic government program or 3. be bullied by a blood thirsty profit-mad insurance company. There are actually many other options that are not only possible, but already exist in large numbers. Many of the largest health plans operating in each state of this country are "non-investor owned" such as many of the Blue Cross Blue Shield plans. This means that they are NOT publicly traded to avoid cutting corners to appeal to stockholders. There are also several charitable organizations through Churches that help out those who catch something major out of the blue. My sister is a self employed hairdresser just starting out - it just doesn't make sense for her to have to pay out of pocket for a "gold plated" health plan she wouldn't normally use and she doesn't yet make enough money to save enough. And when she developed an ovarian cyst she was able to apply for assistance through one of these charities.
The worst thing is that Obama is trotting out all these tear jerker cases of "poor" people unable to get care. Isn't that what Medicaid and Medicare is actually for? And if these programs can't supply coverage while being fiscal messes, why are we supposed to believe that a new "public option" would work this time around. No matter what is offered in theory, beaurocratic nightmares will always prevent the type of "universal access" that is promised.
And to the idea of having no insurance system, its another cute theory but there was no government or military force that initiated the system. Its a necessary pooling of risk because people can't be expected to save for their needs let alone the needs they'll create for others (causing car accidents for example) when that new Playstation 3 game just came out. ANd a previous post was dead on that without insurance systems, people would just have to sue each other over grievances at an astronomical cost to society.
Posted By: Steven Xavier (Guest) on July 02, 2009 at 08:38 PM
STAY CURRENT