Wednesday, July 22, 2009

What Health Insurance Isn't

Insurance is supposed to protect individuals and businesses from rare catastrophic events.
The idea is to lay off risk, which is why insurance isn't even the correct vehicle to handle medical expense. If you are over 70 years old most medical expenses are not rare and a good share are catastrophic. Somewhere around forty our bodies are really moving away from insurance to pre-payment. A young healthy teenager really needs accident insurance more than medical insurance. A geezer needs medical insurance because every little accident can kill him.

First, health is what we do for ourselves and second, medicine was what others do for us. Medicine is supposed to come along after a lifetime of neglected and squandered health and make all things new. Two things that don't save money are wellness programs and preventative medicine. You may live a month longer but you are just going to consume more dollars trying to eek out that extra month in the day room.

Insurance should be like auto coverage. You use it when you have a wreck. It's not there to cover routine oil changes and wiper blades. Yet, more and more people expect their policy to cover prescriptions, eyeglasses, vitamins, OTC pain relievers, chiropractors, massage therapists, marriage counseling etc. People will not be happy until they don't pay for anything and have everything. They want Cadillac care at Ford prices. Cataract surgery on both eyes costs $24,000 cash. The reason it costs so much is because Medicare only pays $1, 400 for both eyes. Without Medicare the cash price per cataract surgery would be about a grand. So for two thousand dollars ( the cost of four RV tires) you have your eyesight restored to new for the rest of your life. Why don't people want to pay for such a bargain? No one wants to get sick or old so no one wants to pay for it. Since someone else is paying for it nobody cares how much it costs or how necessary it is. When it's time to put that third pacemaker in 99 year old Aunt Edna who sits restrained in a chair trying to eat her own face the family says go for it. If that family had to pay for that pacemaker ($20,000) with its 15 year atomic battery they would at least pause to think about it.

What's the answer? How about mandatory insurance for everyone with a deductible equal to 10% of your yearly income. The government would be forced to take care of the catastrophic illnesses; as it already does. Catastrophic illness should be handled like bankruptcy, you can keep your house and your car and wide screen TV. I should be able to get medical insurance for about $400 a month and when my last $400 is gone , boom I'm on Medicaid.

If medical insurance is a right, what else is a right? Is a home a right? What about an SUV? How about free Legal Services? Is food a right? How about clothing? Where does it end? Try to go buy car insurance after you've had the wreck; see how far you get.


D- said...

Politicians.........Stinking, Untrustworthy, Crooks!

u.f. said...

Best explanation I've ever seen of what health insurance is supposed to be. And that includes everything I saw doing strategy consulting for one of the largest health insurance companies in the US.