SCHIP and the Rigged Health Insurance Game
The House on Thursday passed a modified version of the SCHIP bill, with a vote that was seven votes shy of a veto-proof majority. There were 142 members of Congress who voted against extending health care to more poor children. Behind their rhetoric, their intentions are clear: they want to protect the health insurance market and the huge profits that go with it.
But the huge profits are killing health care. We all know that now. Profit-maximizing insurance companies are bad economics. They make money by denying care, which is a terrible way to try to keep us healthy. (The Rockridge Institute’s white paper on health care security has details.)
And, profit-maximizing health insurance does more harm than that. It is also killing our sense of community. It pits us one against another to get the limited number of insurance policies, strangling the trust and cooperation we need to thrive. If we can’t come together when we need each other most-when we’re sick, injured or dying-without our vulnerability being used as an opportunity to maximize profits, then the U.S. is a hollow shell. The community that makes our nation a family is dead.
Huge health insurance profits are killing community because they are killing Americans. This is obvious. We know that over 100 million Americans are under- or un-insured. They can’t get the insurance necessary to receive adequate medical care. So, millions of Americans remain sick unnecessarily and die prematurely.
But there is a second, more subtle impact of the profit imperative of health insurance that is destroying our communities.
In our current health insurance system, companies can’t maximize their profits unless they turn people away. According to Princeton economist Paul Krugman, in any given year about 80% of us need very little medical care. Some aspirin and cough syrup, more or less. But 20% of us have an accident or illness that requires major medical treatment. That’s expensive.
If everyone in the U.S. were covered by the same insurance company or were part of a nationally organized universal health care plan, then this would all balance out. In any given year, the large number of healthy people would pay for the small number of really sick people. And, the years when you are part of the 20% with large medical expenses, the others will pay for you. Spread out the risk, share the costs, and we all get good health care. We thrive. This is what every other industrialized country in the world does. Except the United States.
Currently, we don’t spread the risk and costs evenly. Instead, we have lots of insurance companies all competing against each other to maximize their profits. Which they have-to the tune of billions of dollars a year. But they make their billions by not getting “stuck” with the people needing expensive medical treatment-sort of like avoiding the Old Maid in the children’s card game. The more sick people an insurance company ends up with, the lower their profits. “Stuck” with too many people needing medical care at any one time and an insurance company loses some of their profits. So, insurance companies avoid people needing medical care-the Old Maids-at all costs. And we know the result: over 100 million Americans who are un- or under-insured, pushed into the health care cracks between insurance companies by the companies themselves.
And those of us with insurance have been dragged into this sick game. Those of us who have health insurance get it in a system that works by excluding some of our neighbors. With the present profit imperative of our competitive health insurance system, we have created a national Sophie’s Choice: millions of people must be denied care so that the rest of us-healthier, wealthier, or fortunate enough to have employer-based insurance-can get it.
Health insurance companies are playing us in a lose-lose game, where we are the exploited and the exploiter together. They exploit our family responsibilities. I know that I couldn’t live with myself, if I didn’t provide my wife and daughter the insurance they need to get health care. But, having aided them (and me), I participate in the national Sophie’s Choice. How do I face my uninsured neighbors now? Damned if I do, damned if I don’t.
Insurance companies have dragged us into this rigged game and millions are losing. We can look the other way and pretend our neighbors and neighborhoods aren’t needlessly suffering and dying. We can hope that our luck holds and that we will continue to have insurance. It might be self-denial, but if we’re lucky we just might beat the house and survive. But we know some of our neighbors will lose. Whatever happens to us individually, our community is lost.
Health care doesn’t have to be this way. It could actually empower community. But first we must stopping playing the insurance company game. As long as health insurance companies control health care, these problems will continue.
We already know that we can have better health care for everyone for less money, if we remove the competition and distrust that insurance company profits have injected into the process. SCHIP is a prime example of just this approach. It demonstrates what we can accomplish when we put lives before profit. Those who voted against expanding SCHIP, know that. That’s their fear. And, that SCHIP might become a powerful rallying point toward rebuilding a thriving American community through health care for all.
Eric Haas is a Senior Fellow at The Rockridge Institute.
As long as the US stays the RIGGED “Capitalism” course, it’s only going to get worse.
We Americans have to wake up now to the fact that we are currently allowing the business sector to cannibalize all sectors of government services, and not just Health. If we don’t wake up soon, we are ALL going to suffer big time in the years ahead.
I get the greatest kick out of the paranoia instilled by the word “social.” Americans have a knee-jerk reaction to it, a remnant of the ridiculous fear mongering of the Cold War. So “socialized medicine” is demonized (in fact Bush just did when he tried to justify his idiotic resolve to veto the bill)as though it were some sort of communist plot, for crying out loud. It’s interesting to watch this nation commit slow suicide because of its ignorance, fanaticism, jingoism and pride. Whew. When will we wake up.
COMPETITIVE SOCIALISM
The insurance companies don’t compete effectively with each other. Instead, they make sure effective competition cannot work.
Much of their revenue comes directly from government, not private entities or consumers, through complicated payment formulas associated with Medicare and Medicare Part D. So it’s still “big government”, just a different kind.
Pharmacy benefit managers, drug manufacturers and insurance companies manipulate the drug formulary lists along with the sign-up access availablity to particular plans to rake in big bucks, far above any “competitive” cost of doing business.
Consumers are constantly suprised with drugs removed from the list and other cancelled services that were there when they signed up - too late, have to wait till the next open-access period to correct it.
By preventing the government from negotiating for drug prices, they set maximum ceiling drug prices sold under traditional Medicare from which they can charge whatever is possible in all the phony “privatized” plans, details of which are kept secret.
Meanwhile, traditional Medicare is saturated with fraud and abuse.
A quick check of drug prices available to veterans under the Veterans Adminstration demonstrates what “competition” might look like, dramatically lower than the other plans - somewhat more restricted drugs on the list, but some of the others are useless copycat overpriced drugs anyway.
When Mitt Romney asks whether you want your medical care from big goverment or the private sector, he really means do you want it from big government in one of two ways.
Sadly, the fear of the word “social” is not a remanant of the red scare days, it it a result of a very much current campaign by corporate power. And, the success of the “libertarians” philosophy enables it.
The only thing left to wonder about is whether these the libertarian’s “pro-business” philosophy comes from profound cynical apologism arising from their worship of capitalist power accumulation, or, from profound nievte and ignorance of history.
Michael Moore recently said on Oprah’s show that he thought the word “socialized” medicine should be replaced with the more descriptive word “Christianized” medicine, because a social single-payer approach would more nearly follow the teachings of Jesus Christ than what we now do with “insurance” for profit.
He was right, of course. But we must note that Michael Moore is not a preacher. And “Oprah” is not church.
Where are our real preachers, by the way, and what are our churches doing on health care? Are they too busy electing war promoters, or what?
Let’s call ‘health insurance’ by its true and most accurate name: EXTORTION. What’s the difference whether a loan shark breaks your leg if you don’t pay up - or if you can’t get your broken leg fixed unless you pay outrageous premiums? Which is more immoral - the arsonist who burns your house down, or the exotortionist company that tries to deny you ‘benefits’ on some technicality? (Just check how difficult it was for people hit by Katrina to collect!)
Even if you have ‘excellent health insurance’ - you’d better believe that some anal-retentive jerk will try to find a reason to deny treatment - and while you’re waiting for ‘expensive tests’ your injuries might complicate to the degree that you become permanently disabled - or even die. It’s far more common than most people think. And oh yeah - while you’re out of work, you’re using up your savings, and eventually have to cash in your pension. And then you’re tagged with ‘a pre-existing condition’ that bars you from ever getting a decent job, let alone health insurance, ever again.
How much of your house insurance and/or car insurance premium goes for ‘medical liability’ - that’s another eupahmism for that extortion I mentioned…
We now have legalized extortion, legalized loan-sharking, and legalized drug dealers - all draining our pockets to fill up the coffers of over-paid corporate honchos with golden parachutes - plus all the lobbyists, lawyers, and congressmen also ‘on the take’ - is this a ‘democratic’ country or just another variety of criminal conspiracy??? And we already know how many states require auto insurance - now they’re adding a requirement for ‘health insurance’ - what a racket!
What’s the difference between a robber putting a gun to your head - and an insurance company demanding ‘your money or your life’ - is there a difference? Hell yes, muggers don’t pretend to be honest ‘businessmen’ - except for the crime bosses. Protection schemes are criminal - no matter how many ‘laws’ they pass to legalize themselves.
However, we’re deluded if we think it’s only insurance companies resisting change because of how much money they’re making.
Doctors, hospitals, pharmaceutical companies, medical-device companies, all industries and individuals involved in U.S. health care are making much much much more money than they would be making if they operated in any of the countries with universal coverage, whether the coverage in those countries is entirely government-run or run by private entities for the government. This has been well documented by scholars such as Gerry Anderson of Johns Hopkins University. When push comes to shove, all will steadfastly resist change because they know that their high salaries/revenues must stop growing in a universal system.
In addition, companies that don’t now offer coverage to their employees also will strongly oppose any change, when push comes to shove, because they know they’ll be asked to make some contribution, under universal coverage. They will be required to pony up some cash, because the employers who offer coverage now will be, and it would be unfair to let the non-providers totally off the hook.
Blasting the insurance companies is all very well, but it shouldn’t be done to the exclusion of recognizing the very widespread interest that the rest of the healthcare industry, as well as other industries in the U.S., have in preserving the status quo.
I don’t understand why you Americans fear universal health care as “Socialism”… there’s NOTHING wrong with socialism… society looking after one another. It’s just twisted thinking to believe otherwise. I just don’t understand.
Socialism and capitalism fail with centralization of power.
One argument I would like to see progressives fling in the face of the regressives re: single-payer healthcare: where would you rather fall ill - in Sweden or Nigeria? In Norway or Russia?
Norway, Sweden, Spain, Germany, and all the industrialized democracies enjoy NATIONALIZED healthcare. “Developing” Countries are countries that have sometimes opted for, sometimes been forced into privatized systems (often by World Bank and IMF).
“Developing” Countries’ national wealth has been stripped away by multinational corporations in cooperation with those countries’ elites. The elites have private police forces, live in gated communities, and see their own private doctors or get healthcare in the industrialized west. ALSO THEY PAY MINIMAL TAXES.
In Russia, Nigeria, and in many developing countries the poor get the worst of everything. And they PAY to get the worst of everything. Substandard food, housing, transportation, education, and of course healthcare.
So which do you want? A plutocracy, where if you are part of the 1% that “make” it, and if you can hold on to it, you will buy and receive the best of your nation
OR
Would you rather, like Canada, like France, like Sweden, like Germany, make mutual sacrifices so EVERYONE can have a roof over their head, everyone eats, everyone is educated, and no sick person is ever turned away from a doctor or hospital?
AND MUTUAL SACRIFICE MEANS TAXES.
Elmysterio:
Americans fear “socialized” programs because no one tells them: SWEDEN IS SOCIALIZED, UK IS SOCIALIZED, CANADA IS SOCIALIZED, DENMARK IS SOCIALIZED….
Why would we need taxes if we can use part of the dividends we get from the lease of our equal shares of non-refundable stock in our public resources to fund public works by incorporating We the People?
I love to ask libertarians, where would you prefer face a flood, earthquake, or other devastating disaster, in Canada or Somalia?
Somalia has a small government. In fact, Somalia has no government at all.
And no government is a good thing. Right?
army brat and pierre n,
Good jobs. Well said.
Bush has it right, pitch this socialized sh___ program, privatize Social Insecurity, and trade Medicare and Caid off to insurance companies. Then tax cuts all around to complete the new system. How can anyone find fault with that plan? It just shows capitalism is the best way to go after all.
Insurance industries are just one more wing of capitalism—which DESTROYS HUMAN COMMUNITY everywhere it goes, historically and now…
Outrageous….$2.4B over a decade for an ill-conceived and poorly-run illegal war, but nothing for children’s health insurance here?
What do you think of Bush’s veto? Vote on: http://youpolls.com/details.asp?pid=733
Make your voice heard!
Yes, yes, YES armybrat! Most criminality is legal. And I might add that with just about every other service, you can get a quote for the fees upfront. With medical service you pay what they say you owe after the fact. Additionally, when you go in without insurance, rather than give you the best rate, they charge you the maximum rate! Insurance has been so popular because of fear what might happen, and we prefer “security” over rational pricing.
“there’s NOTHING wrong with socialism… society looking after one another. It’s just twisted thinking to believe otherwise. I just don’t understand.”
You aren’t serious are you? I mean the “just don’t understand” part.
The wikipedia article sums up a few of the “wrongs”:
http://en.wikipedia.org/wiki/Socialism#Criticisms_of_socialism
Now I know this is a long stale thread, but I just can’t help respond to JakeNewton up there… I read that wikipedia article you posted and I must say, it’s such a load of crap spouted by neo-liberal icons… as soon as you see Milton Freedman’s name there, you know it’s gotta be twisted evil greed for the gain of a few… Not convinced there Jake.