Institutionalized Insanity

December 12th, 2013 by Editor B

Why Are We Here?

Sitting thru my employer’s mandatory benefits workshop reconfirmed my belief that health insurance is institutionalized insanity. There must be a better way.

I’ve never liked the concept of health insurance. It seems wrong to me at the very core. It feels like a perverse form of gambling. You’re putting down all this money against the possibility that you might get sick. If you stay healthy, you lose, and all that money goes to the house. If you’re really lucky, you’ll get sick, and then the house pays out.

If you win, you lose; if you lose, you win. That just seems like a cruel and unusual system.

The chief virtue of group insurance, as far as I can see, is that it helps share the cost amongst the group. That’s great. However, I fail to see how having such insurance administered by a for-profit corporation adds any value to that equation. The profit would seem to derive from either one of two sources: 1) paying employees less than their labor is worth, or 2) taking in more premiums than are actually needed to cover healthcare costs. Both seem blatantly contrary to common sense, which is why I call it institutionalized insanity. It’s better than no coverage at all, better than having to bear the costs alone, but the model seems to have fundamental flaws.

Our current system has many problems. The insurance model is one of those problems.

And that brings me to Obamacare.

I can see that Obamacare might correct some of the most egregious problems with our system. For example, it aims for universal coverage. I was glad to learn via social media that at least one old friend from Bloomington is doing well by the new law, and that makes me happy. For the record, I should note that Obamacare has had no effect whatsoever on me and my family. Thus my musings here are strictly big-picture philosophical.

My chief concern with Obamacare is that it doesn’t seem to move us any closer to sanity. It seems to only invest us deeper in the madness, by mandating insurance for all.

I hasten to add that my impression is based on my admittedly limited understanding of this very complex bundle of legislation. Like with our tax code, that complexity is part of the problem. We’ve got fixes grafted on fixes producing a monster like Frankenstein’s. Few really understand it all.

Of course, simplifying this complex situation would be truly radical, and I’m not sure we have the stomach for it. Nevertheless, let me sketch out my simple idea: I kind of think we should provide a basic level of healthcare for everyone, sharing the cost amongst taxpayers, and then have insurance for whatever is above and beyond that basic level. Insurance should not be a necessity; it should be something extra.

Does Obamacare move us toward that in any way? I don’t see how. If anything, it seems to move us in the opposite direction. We won’t ever move ahead by taking half-steps backward. We won’t replace health insurance as the basic model for healthcare by mandating it for everyone.

Some apologists for Obamacare acknowledge its limitations but say this was the only viable solution. They quote Otto von Bismarck: “Politics is the art of the possible.” True enough, but here’s another way to phrase that same idea: “Politics is the art of creating possibilities.” When people can’t manage to create desirable possibilities, it’s a political failure.

I hope I am wrong about this. Time will tell.

8 Responses to “Institutionalized Insanity”

  1. mike p Says:

    Excellently put, Bart – the ACA is reversing some serious wrongs but even its creators know that the true answer is single payer – universal coverage, like the civilized countries (including Costa Rica). Indiana and Louisiana are both within the ten worst states for both health and coverage. Health insurance (with premiums, denials, co-pays, and networks) is an unacceptable, malignant concept. Evolution has faintly begun, but we are still a sickening bureaucratic nightmare of greed and despair. Merry Christmas!

  2. Kent Says:

    This may prove useful as you continue to consider these issues.

    http://krugman.blogs.nytimes.com/2013/12/16/the-big-money-bets-on-obamacare

    It’s an excellent blog, although depending on your knowledge of macroeconomics, there may be a learning curve.

  3. Editor B Says:

    Thanks, Kent. I found one critical comment on that post you shared so insightful that I’m pasting it here. And I quote:

    …the interests of the insurance industry and those of people buying insurance and getting medical care are not at all the same. In fact, that misalignment is (a) why we are here in the first place; (b) why the ACA , aka the Insurance Industry Protection and Expansion Act, may still be a big political flop.

    Put simply, insurers like the ACA because it promises big profits, not better health care for less money, which is what the public wants. Those two are now and always have been opposing goals. As you yourself have said many times, a profit model is simply wrong for health care.

  4. Kent Says:

    Your point is well made.

    Krugman is ambiguous on this issue, stating that “when it works, as the big money now believes it will, it’s going to make a huge positive difference to millions of lives.”

    “Works” has two meanings here, and Krugman appears, from the prior paragraphs, to be addressing “works” as an antonym to “fails.” That is, as a counter to the often held viewpoint that it has already failed. (Your quote from the comments, while accurate, is playing on a usage of “works” that I don’t think Krugman was using in this particular post. That second notion of “works”, the one you quote, he takes as a given in this particular discussion. He states it will “make a huge positive difference.”)

    As to how effective it will be in addressing health care, he seems to agree with you in part. A single payer program, which he certainly argued strongly for, would have been better.

    So perhaps I can summarize your argument, and you can tell me if I have it right.

    1) Basic health care is a human necessity, and should not be a source for corporate profit. Secondary health care, adding to basic coverage can still serve this secondary purpose, that is help those who desire extra coverage and provide profit to corporations.

    2) By mandating insurance for all, one serves corporate profit as a part of providing basic health insurance. This is the “madness” you consider.

    3) Thus the ACA fails.

    4) This failure cannot be justified on the premise that it helps many in need, as it fails to address your central thesis regarding basic health care. As such it is undesirable, and “when people can’t manage to create desirable possibilities, it’s a political failure…”

    I’m not arguing against your opinions. I’m just wish to understand your argument.

    Does the above summarize you argument, if only briefly?

  5. Editor B Says:

    I think you’ve got my argument, Kent. My only quibble would be with the fourth point. If the ACA truly does help many, then I will not regard that as a total failure. I would say instead that’s a partial success, but probably only short-term. I believe in the long term we’ll find that the ACA doesn’t address systemic problems.

  6. Dan Gentry Says:

    Many good points here.

    One question that keeps me thinking without finding an answer: What is the line between basic and secondary health care? Treatments that were considered new and experimental only a few years ago are now standard care. How do we draw that border?

  7. Editor B Says:

    A great question, Dan. I have no ready answer either. I do feel, strongly, that your question is exactly the question that we should all be discussing and debating. Sadly it’s not on the table. Our current national dialog on healthcare (or what passes for dialog) seems to be focused elsewhere.

  8. mike p Says:

    Single payer, single payer, single payer – on the model of the civilized nations in Europe and some of Central / South America. Universal health care through Medicare would be good. Birth to death. Yes, the ACA continues to include the health insurance companies, who are amoral profiteers. At least we have eliminated the pre-existing condition exclusion and we have expanded coverage for young adults to age 26. Yes, implementation has been a Byzantine nightmare – with major inequities for so many. We need medical coverage for medically necessary care at no cost. For all. As a birthright. Yes it can mean higher taxes, but corners can be cut elsewhere. Our citizens aren’t nearly as healthy as those in nations with Single F…… Payer!

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