How The Current Health Insurance System Leaves Millions Behind

Opponents of health care reform are trying to distract discussion of the real issues with distortions of the facts and protests at town halls claiming that this is a government takeover of health care, “socialized medicine,” or would lead to euthanasia. When hearing all the invented horror stories from the right it is easy to lose track of the real horror stories which occur in our current health care system. While conservatives tell scare stories of rationing, we must remember how often those who either have insurance or are attempting to purchase insurance are denied health care. HealthReform.gov has put out a paper on Coverage Denied: How The Current Health Insurance System Leaves Millions Behind. Here is a portion:

“Pre-Existing Conditions” Affect Millions of Americans

A large proportion of Americans have health conditions that insurance companies can qualify as “pre-existing conditions.”

A pre-existing condition is a medical condition that existed before someone applies for or enrolls in a new health insurance policy. It can be something as prevalent as heart disease – which affects one in three adults1 – or something as life-changing as cancer, which affects 11 million Americans.2

But a pre-existing condition does not have to be a serious disease like cancer or heart disease. Even relatively minor conditions like hay fever, asthma, or previous sports injuries can trigger high premiums or denials of coverage.3

Unattainable Health Coverage

Insurance discrimination based on pre-existing conditions makes adequate health insurance unavailable to millions of Americans.

In 45 states across the country, insurance companies can discriminate against people based on their pre-existing conditions when they try to purchase health insurance directly from insurance companies in the individual insurance market.4 Insurers can deny them coverage, charge higher premiums, and/or refuse to cover that particular medical condition.

A recent national survey estimated that 12.6 million non-elderly adults5 – 36 percent of those who tried to purchase health insurance directly from an insurance company in the individual insurance market – were in fact discriminated against because of a pre-existing condition in the previous three years.6

In another survey, one in 10 people with cancer said they could not obtain health coverage, and six percent said they lost their coverage, because of being diagnosed with the disease.7

It is still legal in nine states for insurers to reject applicants who are survivors of domestic violence, citing the history of domestic violence as a pre-existing condition.8

Even when offering coverage, insurers can exclude whole categories of illnesses related to a pre-existing condition. For example, someone with a pre-existing condition of hay fever could have any respiratory system disease – such as bronchitis or pneumonia – excluded from coverage.9

Losing Coverage When You Need It Most

Thousands of Americans also lose health insurance each year through a practice called rescission.

When a person is diagnosed with an expensive condition such as cancer, some insurance companies review his/her initial health status questionnaire. In most states’ individual insurance market, insurance companies can retroactively cancel the entire policy if any condition was missed – even if the medical condition is unrelated, and even if the person was not aware of the condition at the time. Coverage can also be revoked for all members of a family, even if only one family member failed to disclose a medical condition.10

A recent Congressional investigation into this practice found nearly 20,000 rescissions from three large insurers over five years, saving them $300 million in medical claims11 – $300 million that instead had to come out of the pockets of people who thought they were insured, or became bad debt for health care providers.

At least one insurance company has been found to evaluate employee performance based in part on the amount of money an employee saved the company through rescissions.12 Simply put, these insurance company employees are encouraged to revoke sick people’s health coverage.

Mike Madden has some examples of people who have been left behind by the current health insurance system at Salon. Here is just the first of their horror stories:

In June 2008, Robin Beaton, a retired nurse from Waxahachie, Texas, found out she had breast cancer and needed a double mastectomy. Two days before her surgery, her insurance company, Blue Cross, flagged her chart and told the hospital they wouldn’t allow the procedure to go forward until they finished an examination of five years of her medical history — which could take three months. It turned out that a month before the cancer diagnosis, Beaton had gone to a dermatologist for acne treatment, and Blue Cross incorrectly interpreted a word on her chart to mean that the acne was precancerous.

Not long into the investigation, the insurer canceled her policy. Beaton, they said, had listed her weight incorrectly when she bought it, and had also failed to disclose that she’d once taken medicine for a heart condition — which she hadn’t been taking at the time she filled out the application. By October, thanks to an intervention from her member of Congress, Blue Cross reinstated Beaton’s insurance coverage. But the tumor she had removed had grown 2 centimeters in the meantime, and she had to have her lymph nodes removed as well as her breasts amputated because of the delay.

Please Share

45 Comments

  1. 1
    Nancy says:

    Tell me…who’s going to win the game if most of your team is sitting on the bench????
    GET INVOLVED!!!!
    I have set up a petition to have paid health care removed from our representatives in Congress until such time as they reform health care – to include a strong public option – for ‘we the people’ who they are supposed to represent.

    If you agree with what I am doing – I am going to ask you to do what I have been
    asking others to do…sign it, then spread the word to anyone and everyone you know!
    http://www.petitiononline.com/.....ition.html

  2. 2
    Ben says:

    The main problem with preexisting conditions is that you can’t exempt them from coverage. For example, based on a true story, someone has bursitis, but isn’t worried about that. Rather, is worried about a heart attack, stroke, car accident, cancer, and various other catastrophic events. Unfortunately, insurance companies are not legally allowed to insure that person for everything except the bursitis. People should be able to buy what is INSURANCE for them (read: coverage for unexpected events), and not have to buy with it prepaid health care or coverage for something that already exists

  3. 3
    Ron Chusid says:

    They can and do sell insurance which excludes only preexisting conditions but there are limitations on the time. The law varies by state. For example, in Michigan an insurance policy can exclude coverage for preexisting conditions for the first six months of a policy, with other states having longer periods.

    Health insurance is needed for more than “unexpected events.” Much of health care expenses are for treatment of chronic diseases. The care is not unexpected once someone developed such a problem, but is too expensive for most to pay for out of pocket.

  4. 4
    Ben says:

    In California, it’s not allowed at all. But that aside, we shouldn’t have time limitations

    Insurance by definition is supposed to be for unexpected events. We don’t buy homeowners insurance to change locks, repaint the house, fix broken circuits, etc…we buy it for catastrophic events such as a fire. When you’re buying it for events you know you are going to have (or products you know you’re going to buy, such as prescription drugs), it’s no longer insurance. I’m not against prepaid health care for chronic diseases if people wish to buy it, but it shouldn’t be lumped together with insurance. I might not have any chronic diseases, so it doesn’t make financial sense for me to buy coverage for that, but I may want to just buy insurance (for catastrophic events), and I should be allowed to do that.

    To add, part of the problem now is we’re spending other people’s money when it comes to prepaid health care (including prescription drugs). We therefore have no incentive to care about the cost, but we care about the quality. Put another way, think of prepaid flights the same way we have prepaid health care. I’m spending other people’s money on me, I don’t care about the cost, but I care about the quality, I’ll be flying first class when I wouldn’t if I had to pay for it. Then demand rises for first class, and coach seats end up being converted to first class, then first class becomes increasingly luxurious and costly. Both flying and the prepaid flight premiums become more expensive, and limited to those who can afford the skyrocketing costs. Similar problem exists in health care right now, not with catastrophic or emergency events, but with the other components.

  5. 5
    Ron Chusid says:

    “Insurance by definition is supposed to be for unexpected events.”

    That is not necessarily true. Health care is not like house insurance. The cost of treating chronic disease makes it necessary to health care to cover routine health care as this is too expensive for most people to pay out of pocket. Insurance companies and government payers often find it to be more cost effective to pay for such care, as well as preventive care, as opposed to paying for the train wreck after it happens.

  6. 6
    Ron Chusid says:

    It is also undesirable to leave people without coverage for a preexisting condition. If someone develops diabetes, heart disease, or cancer they should not be denied health coverage for these conditions. Under the current system even if they have coverage they can lose it if they change jobs or their insurance company comes up with a way to drop them. Once uninsured, they would never be able to get coverage for such problems if insurance companies had no limitations on preexisting conditions. At present it is often too long to go without coverage even if exclusions for preexisting conditions are only for a limited time.

  7. 7
    Ben says:

    Health and house insurance are analogous. It’s more cost effective to get a burglar alarm than to recover stolen items, that doesn’t mean the burglar alarm is paid for by insurance. If insurance companies wish to offer routine health care, then they have the right to do so. The government shouldn’t force them to, when people like me might just want to buy catastrophic insurance. My point remains regarding why insurance costs keep going up.
    If someone has diabetes, heart disease, or cancer and gets insurance for those conditions, it’s no longer insurance. It’s not even for events one expects to have, it’s for preexisting events. Think of it like getting car insurance for a car crash you just had. That’s not insurance. I agreed with the GINA bill in not allowing insurance companies to discriminate based on genetic proneness to a disease, but it still allows discrimination in the presence of an actual disease. People who have it are a higher risk, or a certainty, at that point and they should not expect to have other people pay for it as if they don’t currently have it.
    I still remember a Simpsons clip when the Flanders house was destroyed, and Maude was asked if they had insurance, and she said “No, Ned considers it a form of gambling for some reason.” And there’s truth to that: getting insurance is a gamble, a smart gamble. If you pass through your life never in a disastrous situation, you wasted your money. If you are in a disastrous situation, it pays off. If it’s not for unexpected events, it can’t be called insurance.

  8. 8
    Ron Chusid says:

    You started by saying that health and house insurance are analogous but then you essentially demonstrate why they are really very different. The point of health insurance is to cover problems when people have a disease. The idea is to have a large enough risk pool so that both people with and without chronic diseases are paying in so that those with chronic diseases can be covered. I’m afraid you totally misunderstand what health insurance is all about.

    Right now, in this country, insurance is a gamble. The point of reforming the system is to provide health care coverage to those who need it so it is not a gamble.

  9. 9
    Ben says:

    I’m afraid that’s not the case. Insurance is a gamble, by its very nature. If you want to turn insurance completely into prepaid health care, then just say so. But it’s not insurance.
    The sentiment here seems to be that you think those with chronic conditions have a claim to my money in treating their conditions. I may just want to buy insurance (again, catastrophic), but are you advocating I be forced to buy prepaid health care (or pay taxes) to help those with chronic conditions?
    Furthermore, my points about why insurance costs are going up, and that insurance is for unexpected events (as Chris Rock says, it should be called “in case s**t”)  remain. Someone pays premiums, and if s**t happens, they are supposed to get coverage. Insurance is proactive. We can’t buy car insurance to cover an accident we already had, we can’t buy property insurance to cover damage that alreay happened, we can’t buy workers’ compensation insurance to cover a worker that’s already been injured, we can’t buy life insurance for someone who’s already died, and we shouldn’t be able to buy health insurance for health conditions we already have.

  10. 10
    jeremy ehrenthal says:

    Everything in this post is certainly true, as in the health insurance companies are blatantly turning down millions of people and it is unfair to millions of Americans.  However, we have strong government plans in Florida right now!  Medicaid and the really great County Health Plans that are free and or  subsidized.  Why start a new government program which will certainly be wasteful and duplicate the already existing infrastructure that Medicaid and Medicare have produced.  Moreover, the states and local communities will be able to provide better coverage then either Medicaid or Medicare anyways.  Please see our Florida Health Insurance Survivial Guide for information about all the free existing plans already in place for the people that are shunned by the health companies.

  11. 11
    Ron Chusid says:

    Ben,

    You continue to misunderstand what health insurance is all about, trying to make it like house insurance. Health insurance is supposed to cover our medical problems–it does not good if it doesn’t cover health conditions we already have. Covering conditions we have is the whole point of health insurance.

    As you do not even understand what health insurance is there is no point in continuing a discussion about health insurance with you.

  12. 12
    Ron Chusid says:

    Jeremy,

    If you have good coverage then you will be able to continue with it. Health care reform is to help all those who do not have good coverage.

  13. 13
    Ben says:

    I’m not disputing what health insurance is currently about. I’m saying what it should and shouldn’t be about, that it doesn’t meet the definition of insurance currently, and what it currently is is part of the problem. That’s all

  14. 14
    Ben says:

    FYI, regarding being able to keep what you have now, PolitiFact has rated that a <a href=”http://www.politifact.com/truth-o-meter/statements/2009/aug/11/barack-obama/barack-obama-promises-you-can-keep-your-health-ins/”>half truth</a>

  15. 15
    Ron Chusid says:

    Insurance should be about handling the expenses when one is sick, including chronic diseases.

    The statement of keeping what you have is more of a 90% truth than a half truth. Not everyone will have exactly the same plan–but the chances of doing so are greater with health reform than if we don’t change the system. Under the status quo far more people will be unable to keep their current insurance or doctor than if we pass health reform.

    It is possible that employers will drop insurances, but people will be able to replace it with something comparable. Currently employers frequently drop insurances–and many are forced to go without insurance because of the difficulty of obtaining insurance on the individual market.

  16. 16
    Ron Chusid says:

    Oh yes, if you want an insurance plan which can drop you when you get sick then Obama is not telling the truth. Such plans will no longer be around. For the vast majority of people his statement is correct (even if not 100% true).

  17. 17
    Ben says:

    Did you even read what PolitiFact had to say?

  18. 18
    Ben says:

    That was in response to your second post.
    Regarding your first post, I think people should have choices. Insurance companies, as bad as they are right now, are not our servants. They are not under any obligation to sell health plans. The problem is they aren’t delivering on what they are selling. If demand exists, we will have suppliers. Some insurance companies may wish to offer catastrophic insurance, and some may wish to offer prepaid health care. People shouldn’t be forced to buy one when they prefer the other. If prepaid health care were to turn out not to be profitable without being lumped with catastrophic insurance, then market forces will have some companies lump them together while others will just offer catastrophic.
    The problem right now is incentives. They have the incentive to deny as much care as they can get away with (both legally and in the market), while people who get elective procedures have the incentive to go for all quality and no cost (I realize some variations exist with coinsurance and copay, but the central point is the same). We need to change that. I think some sort of public option may be what we have to do, as outlined by Captain Sarcastic on Freedom Democrats:

    My proposal for a healthcare policy that a libertarian could support (albeit grudgingly, because of the immovable object of guaranteed care) is a public healthcare insurance option in the form of a non-profit corporation that could not be bought by private industry (as so many of the effective not-for-profit insurers have been). This corporation would have the full faith and credit of the US Government, and would be empowered to negotiate on behalf of their insured. Interestingly, this non-profit might well be designed similar to the Federal Employees Health Benefit Plan, which essentially negotiates with private insurers, but gets far better rates, and far better coverage than individuals, smaller groups, or even large groups can negotiate by virtue of number of insured’s they represent. The FEHBP represents 15 million members, making it the largest health insurance plan in the world, outside of national healthcare across most industrialized nations. This non-profit could also have the option of self-administering, eliminating the private insurance companies if they find that would be more efficient. The effect on private insurers would be simple, they would be both competitor and partners with this new public option, and their need to control costs both in their private offerings (to compete) and their negotiated government rates (to win contracts), would serve the interests of the public, putting their corporate interests in profitability in line with the public interests of better value in healthcare.
    If the private offerings are better, then they will win, and the public option will languish and people won’t choose it, but hopefully, the competition will create better value. If the public offerings win, the private insurers can still prosper, but only if they control costs and win contracts with the federal plan. Most of this plan would have zero cost to the taxpayer, only more options and greater competition. The costs to the taxpayer would come from the existing healthcare subsidies and government plans, policies like Medicaid, SCHIP, state programs, and possibly even Medicare itself could be eliminated and rolled into this non-profit entity. All the billions that go into those programs could be streamlined into this program. The savings should be significant over the current policy that pays a premium for emergency care under the guaranteed treatment policy. Corporations could maintain the current beneficial tax status of health insurance premiums they pay, and, for employees who opt out of their plans, they could have tax beneficial treatment on insurance stipends for their employees, maintaining the benefit of continuing to offer health benefit monies for their employees.

    I would support this financed with premiums. The money currently going into those 3 programs would be turned into a voucher (means-tested) and the recipients could use it for either private insurance or the public option.

  19. 19
    Ben says:

    Another thing, regarding guaranteed issue. If preexisting conditions cannot be grounds for discrimination, then people will just wait until they get sick before getting insurance. The way around that is they claim “we’ll require them to have it when they are healthy too.” Problem there is that car insurance is mandated now, and 1 in 5 drivers avoid it.
    As long as the insurance companies have the incentive to deny care, any laws we pass to remedy the effects are are more window dressing than relief. Change the incentives and everything becomes much easier, and the public option mentioned above might be it

  20. 20
    Eclectic Radical says:

    “Oh yes, if you want an insurance plan which can drop you when you get sick then Obama is not telling the truth.”
     
    I could be wrong, and this is certainly shamefully ad hominem, but that appears to be precisely what Ben is saying he wants.

  21. 21
    Ron Chusid says:

    “Did you even read what PolitiFact had to say?”

    Did you even consider the fact that journalists outside of the medical profession might not have the final word on a topic? Fact check articles are often great when it is a simple fact that is under investigation. This does not fall into such a situation. When you look at all the ramifications, Obama’s generalization is far more true than false.

  22. 22
    Ron Chusid says:

    “Insurance companies, as bad as they are right now, are not our servants. ”

    No, but if their actions lead to a crisis as we have now then it is necessary to change the system. If they are not providing what we need for health care then we need to establish a system which does serve our needs. If you don’t want to make them our servants then we can always ignore them and go to a single payer system.

    Realizing they are expendable, the insurance companies have gone for the idea of having considering the idea of covering everyone if there are also mandates both to avoid the free rider problem and to increase their customer base. (Of course they would prefer to stop any change at all if possible).

    “As long as the insurance companies have the incentive to deny care, any laws we pass to remedy the effects are are more window dressing than relief.”

    It remains to be seen how effective the laws are in changing insurance company behavior, but such questions as to whether insurance companies will ultimately get around them is exactly whey a public plan is being included. The reality is that much of the world has already accomplished the goal of having private insurance companies provide near universal coverage without the problems we have in the United States.

  23. 23
    Ron Chusid says:

    Eclectic,

    “I could be wrong, and this is certainly shamefully ad hominem, but that appears to be precisely what Ben is saying he wants.”

    Yes, many conservatives and libertarians have a tendency to overly identify with businesses and support whatever they do, along with supporting the status quo. (Being the owner of a business I generally back the freedom of businesses to conduct their business as they choose but their are cases such as health insurance where problems exist which must be addressed).

    Imagine looking at this from the reverse perspective in most of the world where health insurance companies are heavily regulated and must provide care as opposed to being able to set up a business model where they profit from denying care. Just imagine going to France and advocating they change their laws to allow an insurance company to drop people once they become sick!

    You might be interested in this article. It is somewhat to the left of myself on this issue (and therefore might be closer to your views). Regardless of whether I agree entirely it is interesting reading on points such as the reluctance of many to support changing a system which is screwing them. The article concludes:

    Well, the American middle class is at present being voluntarily consumed so the rich can have their healthcare. Still, a great many of them oppose any Obama health plan; it’s not easy to warn somebody that they’re about to be eaten alive when you find them waiting patiently under the ketchup nozzle.

  24. 24
    Eclectic Radical says:

    “(Being the owner of a business I generally back the freedom of businesses to conduct their business as they choose but their are cases such as health insurance where problems exist which must be addressed).”
     
    I am the owner of a business myself, these days. I’m not totally unsympathetic to the needs of businesses and business owners and I certainly believe in the right of businesses to do business as they choose within basic guidelines of moral and ethical behavior. What I am is extremely careful to differentiate ‘businesses and their owners’ from ‘business’, by which I mean corporate interests far divorced from both their labor force and their customer base by economics, physical and psychological distance, and world-view. I think I’ve said before that one of the biggest reasons to favor single-payer or a national health system is to ease the burden subsidizing American health care places on American business. I admit that my experiences as an employee and a small business owner and my reading of history and current events give me an extremely negative view of corporate culture and corporate management in America, but I’m not anti-business. As someone who grew up in a liberal Republican household, and whose original liberal steepings were in the Rockefeller Republican school, I’m actually pretty pro-business. I just differentiate between a ‘pro-business’ outlook, which in my view means encouraging entreprenurialism and bridging the management-labor gap equitably, and a ‘pro-corporate’ outlook that advocates tax cuts and corporate welfare and does nothing for the majority of American businesses.
     
    The quoted article appeals to me in that it certainly makes some of my best arguments for broader health care reform, most notably the economic argument. As a writer, I have to admire anyone who quotes cyberpunk and Mel Brooks in the same piece. I think the major flaw in the article is that we are probably a lot closer to the cyberpunk dystopia that the writer is really aware. We’ve already got the problem of infoglut and megacorporate influence over daily life, if it’s not quite as intrusive and smothering as in Philip K. Dick or William Gibson yet then it is on it’s way.
     
    Nor is it easy for me to absolve a lot of the American opponents of health care reform as possessing the attitude of the ‘good citizens of Rock Ridge’ when presented with things they don’t want to have to see or associate with.
     
    I live in quasi-rural Tennessee, along the Virginia border, where my neighbors support a system that is screwing them constantly. 19% of this county voted for Obama, while the percentage of McCain-Palin voters and the percentage of the adult male population on food stamps and unemployment is strikingly similar. People reliant on government benefits vote to cut those benefits all the time, then complain when their benefits are cut.
     

  25. 25
    Ben says:

    Ron and Eclectic,
    No, that is not what I want, and I am hardly a conservative.

  26. 26
    Ben says:

    Take a read at The Liberty Papers article http://www.thelibertypapers.or.....heartless/
    I don’t agree with them entirely, but they demonstrate that supporters of free market health care, such as myself, are far from heartless

  27. 27
    Ben says:

    Oh, and Eclectic, I agree with you completely on pro-business vs. pro-corporate

  28. 28
    Ben says:

    Don’t mean to post message after message, but I just had a thought to end the incentive of rescissions: everytime the insurance companies wish to drop someone, they have to pay the person back every dollar they have paid in premiums, with interest.

  29. 29
    Ron Chusid says:

    Ben,

    I doubt that would do much to prevent rescission. I believe in some cases they do refund premiums, but regardless of whether or not they do, refunding the premiums will generally be far less expensive than paying the claims in cases of people who develop significant problems while covered.

  30. 30
    Ben says:

    It isn’t a panacea for rescissions and other reforms would be needed, but it would reduce the incentive to spend as much energy investigating each person, and would ensure they be much more careful in accepting someone knowing they make a loss by accepting them and dropping them later. I’m sure you agree it’s far worse to be dropped than rejected right now, because at least when you’re rejected they haven’t taken any money from you.
    I think this provision would need to be a part of any reform on rescissions. That, and easy access to information of their rescission rate, and only allowing rescissions when it can be shown that (burden of proof on insurance company) an inaccuracy on the application led them to believe the likelihood of such claim occurring was less than it actually was.  Command and control may sometimes be needed, but only after internalizing the costs

  31. 31
    Ron Chusid says:

    Ben,

    I would definitely want to make the insurance companies pay back the premiums even if I don’t think this would do much. I also agree that it is preferable to have rejections up front so people know where they stand than to have them cover people and then for them to find they don’t really have coverage. I would like to see very strict laws to make it difficult for insurance companies to continue this practice. Perhaps a time limit–if they have covered someone for months and the unreported condition hasn’t been an issue it then the insurance companies have less of a complaint. There should also need to be clear evidence that the person was misleading the insurance company. It is one thing for someone to have had an MI and to claim no significant medical problems. It is another thing for someone to have a trivial medical problem which is not mentioned and then to drop them when they develop something which is unrelated.

    Another problem is that many patients are terrible historians. A year or so ago I had a patient who was (or acted) surprised that an insurance company rejected her because she didn’t put down she had diabetes but my records showed she did. She acted as if she didn’t know she had diabetes despite several office calls when I discussed her sugar and despite referring her for diabetes education. I can also recall a second patient who was being treated for diabetes for years and was on diabetes medications but I got back a couple of consults in which she had denied having diabetes.

  32. 32
    Ben says:

    I agree completely

  33. 33
    Eclectic Radical says:

    “I don’t agree with them entirely, but they demonstrate that supporters of free market health care, such as myself, are far from heartless”
     
    ‘Free markets’ (in the sense that most libertarians and hard conservatives mean the term) are, by definition, heartless. Regardless of whether those who support them are heartless or not.
     
    The absolutely unregulated market means the absolute rule of whomever can gather the most capital to control that market. Which means that corporations form monopolies or cartels (or, as they did back in the bad old days of the Gilded Age outrigh trusts) and lock out competition entirely by simply spending them out of business. Then they lock up control of an industry far more tightly than government regulation has ever done, anywhere. They substitute advertising dollars for quality of product and substitute market share for customer service.
     
    That would be a lot more frightening than any of the horror stories being shouted about health care reform. We have significant examples of how health care reform works and endless examples of how free market health care does not work. While our current system is not ‘free market’, the free market had totally failed large segments of society in the 1960s. This is why Medicare and Medicaid were created in the first place, because of free market failure.
     
     

  34. 34
    Ben says:

    Free trade is a natural way to institute competition where we have monopolies

  35. 35
    Ron Chusid says:

    Monopolies arise out of a failings in the free market. Health insurance is something which cannot be handled well by the free market without adequate regulation

  36. 36
    Ben says:

    I don’t dispute what you’re saying about health insurance needing regulation, but monopolies often arise out of government privilege. By privilege, I mean artificial advantages over others. I’m not talking about natural monopolies, which should be publicly owned.
    Government allowing people to own natural resources without paying economic rent for them, the Federal Reserve enabling banks to profit off money they didn’t earn, no bid contracts, occupational licensing requirements that go beyond safety assurance, direct subsidies and narrow-based tax exemptions, and limited liability provisions are to blame for monopolies.
    Similar to meat. We have meat, then put all these chemicals, antibiotics, and hormones in it, and then say meat causes cancer. It’s not the meat that causes cancer, it’s what it’s processed with that does. Same with the market and legal privilege

  37. 37
    Eclectic Radical says:

    “Government allowing people to own natural resources without paying economic rent for them, the Federal Reserve enabling banks to profit off money they didn’t earn, no bid contracts, occupational licensing requirements that go beyond safety assurance, direct subsidies and narrow-based tax exemptions, and limited liability provisions are to blame for monopolies.”
     
    All of these certainly contribute to the ability the largest corporations to establish monopolies or cartels, yes. However, they are not necessary for corporations to establish monopolies. The trusts of the Gilded Age came about in what we, today, would call a genuine ‘free market.’ Moguls not content with just not having to compete with anyone else strove to control as much as possible of every industry on which their own core business depended so as to not have to even do business with anyone else. Lack of competition froze prices at artificially high levels, wages at artificially low levels, and crowded entrepreneurs out of the market entirely. The government had to step in to break up the trusts in order restore monetary circulation to an economy that had become absolutely static, with resources and wealth lumped in a realtively tiny number of hands and much of the nation in grinding poverty.
     
    Do we need to end neoconservative ‘pro-business’ policies that are excessively ‘pro-corporate’ and entirely hostile to small business or entrepreneurs trying to enter the market? Yes, of course. However, it is extremely important that we not restore the economic volia that allows those with the most money to write their own rules and impose them on everyone else.
     
    Absolute economic anarchy is not ‘free’, it’s granting a license to the richest to set up totalitarian control.
     

  38. 38
    Captin Sarcastic says:

    I had never considered myself to be a modern liberal. I agreed with the concept of the “free market” being the best way to deliver economic efficienies and protect individual rights. Only over the last 10 years or so have I come to realize that there is no such thing as a free market, and it can’t exist. A free market, must theoretically have a system in place to protect it. A market without such protection would be absolute anarchy, and property would be subject to theft by anyone with the force to take it.

    The problem is the system that protects a free market is a construct, a fiction created to present the illusion of a free market, but because the system which protects must necessarily have the might to take anything by force,  rights exists at the pleasure of it’s source of protection.

    The good news is that the markets would collapse if the source of protection overtly abuses it’s might, which would in turn eliminate the source of power of the system protectors. The bad news is that the system can be corrupted internally. This takes the form of regulatory capture, whereby monied interests buy favor with the system protectors, and gain advantages and protections that could never exist in the myth of a free market.

    There are some actions that can be take to mitigate regulatory capture, but realistically, it is an inescapable element of any market.

    This is where liberalism comes into play. Not liberalism to eliminate the freedom of the market, though that is the claim of conservatives, but liberalism to counteract the effects of regulatory capture.

    There are examples of this tilt and counterbalance across our history, but I think one good example is the is the management/labor relationship of  the Industrial Revolution. Corporations gained the power to virtually own their labor force through various mechanisms such as company towns. The liberal counterbalance was the protection of unionization.

    In the healthcare debate, the insurance industry controls nearly 1/5 of the nations GDP, this industry has used regulatory capture to great success, and is fighting the liberal counterbalance with everything they’ve got, and have been hugely successful for decades, and are on their way to victory in the current debate. The problem is that we like to frame the debate as freedom vs government, but in fact the debate is regulatory capture vs counterbalance. Unless the debate is understood for what it is, then regulatory capture has already won.

  39. 39
    Ron Chusid says:

    “The problem is that we like to frame the debate as freedom vs government…”

    That is a common problem which leads many libertarians and conservatives to take positions they wouldn’t otherwise take. The right wing noise machine is very good a framing issues as a debate between freedom and government when issues are far more complex than that.

  40. 40
    Fritz says:

    This is why I try to always talk about “health plans”, not “health insurance”.  If a company is not allowed to differentiate on risk factors (like pre-existing conditions), then it is not insurance.  It would be as if a property damage insurer was not allowed to differentiate between me and someone in New Orleans for flood insurance.
     
    But if pre-existing conditions are to not be factored in, then it is really pretty unfair for healthy people to not be required to pay in to health plans until they get sick.

  41. 41
    Ron Chusid says:

    It is not that health insurance isn’t insurance but that health insurance is quite different from property or auto insurance. Those who try to apply conditions for other types of insurance to health insurace are going down a dead end in their discussion of health care.

  42. 42
    Fritz says:

    That’s why I prefer to use a different word.  There are so many differences from standard life insurance or car insurance or property insurance that I think the use of the word “insurance” adds more confusion than clarity.

  43. 43
    Captin Sarcastic says:

    Health insurance vs. property insurance: When a person wrecks an uninsured car, they can scrap it or pay to fix it out of their pocket, period. There is no social agreement codified in law that says that regardless of insurance, if a car really needs work, a mechanic must do the work, regardless of payment or the abilty to pay. With health insurance, there is that social agreement that no one requiring necessary care can be turned away because of their inability to pay.

    In that respect, universal healthcare exists now, today, in this country. It’s just that it is a ridiculously ineffecient and incredibly expensive manner of delivering healthcare.

    We really only have two choices, continue as we have been, with everyone eligible for care at the taxpayers expense, once they have exhausted their own resources (or simply don’t pay and forfeit their credit rating). Or, we can decide that we already have mandatory coverage as a result of the societal agreement not to deny care, and create a system that allows  this mandate to be as effecient as possible. Meaning essentially that everyone would be required by law to carry health insurance of some form or another. I would imagine in this scenario, young healthy people could potentially carry catastrophic insurance coverage, with a low premium and high deductible.

    The only alternative is to repeal the social agreement and corresponding laws that say that no one can be denied necessary care. I don’t see this happening, do you?

  44. 44
    Fritz says:

    Captin — yeah, that’s why I am not yelling in opposition to having a mandate that requires you to buy a health plan.  I want it separated from employment, though.

  45. 45
    Eclectic Radical says:

    Just a few thoughts in response to a couple of quotes, nothing new or profound to drone on about…
     
    “The problem is that we like to frame the debate as freedom vs government, but in fact the debate is regulatory capture vs counterbalance. Unless the debate is understood for what it is, then regulatory capture has already won.”
     
    Captin, this is one of the best statements of the fundamental argument that I have ever seen. Very well said.
     
    “Captin — yeah, that’s why I am not yelling in opposition to having a mandate that requires you to buy a health plan.  I want it separated from employment, though.”
     
    Amen. Employer paid insurance is part of the problem, not part of the solution, and the way the Democrats are trying to lean on corporations to cover the costs of their reform plan bothers me a lot. I’ve always felt the single biggest argument for universal coverage was to create a system independent from employer-paid care, and instead we are trying to make employer-paid care the cornerstone of universal coverage. It bugs the hell out of me.
     
     
     

5 Trackbacks

Leave a comment