Would you please expand on this?
The basic concept of insurance is to spread risk. You buy insurance to protect you against a large but unlikely risk. You don't expect your house to burn down but if it does, you have a huge financial loss so you pool that risk by buying insurance. The process by which insurance companies determine premiums is underwriting. They figure out the likelihood of the catastrophe happening and then they price your premiums accordingly.
"Catastrophic" or "major medical" health insurance is actual insurance.
What most of us have and call "insurance" is more like prepaid health care. We have policies that are more like maintenance contracts on furnaces than insurance policies. The furnace guy comes once a year for a cleaning and check-up and also whenever the furnace fails. For this we pay a maintenance fee. Similarly, we and/or our employers pay up front for whatever health maintenance we need during the year, both major and minor. To get back to your auto insurance comparison, that would be a car insurance policy that paid for oil changes and tune-ups, not just crashes. Now, the prepaid health care paradigm still retains an element of insurance in that an insurance company underwrites the policy for the employer's group or the individual based on risk and prices vary accordingly.
What we have in the pending legislation is a prepaid health care model as above. Except there is no longer any underwriting. Mandated community rating and guaranteed issue effectively obviate the practice of underwriting. So we have "insurance" companies that no longer underwrite risk and policies that cover the equivalent of oil changes. That isn't insurance any more. It has lost the fundamental functionality that defines the concept of insurance. We really should quit using that word for it. It's become a misnomer and it clouds the paradigm changes being made.
If there is no government insurance option to compete with private industry
Sure there is. The bill specifies gold, silver, and bronze plan benefits varying only on the percentage of co-insurance and authorizes private companies to handle the paperwork or signing people up and processing claims. That's very similar to specifying Medicare benefits and authorizing CMS to contract out the paperwork. (I trust we all agree that Medicare is nationalized health insurance.) For the exchange segment of the "market," there is effectively a government insurance option. It's just not single-payer.
The reason for this is that we don't want for folks without liability to hit us and not be able to pay for the damage they did. Do you consider that socialism or a bad thing?
In that case the government is doing its job, which is to protect you from harm done to you by others. It requires liability insurance. If you are hurt by an accident caused by another, you're not stuck with the financial loss. That's no different from laws against fraud or libel or requiring you to shovel the snow from your sidewalk.
Requiring health insurance is quite different. Its purpose is to make sure that healthy people contributes to the group insurance pool so their money can be transferred to help sick people. That's a communal approach to paying for health care, which is a socialist concept, not a liability question. If we were required to have automobile collision and comprehensive insurance, then you might have a reasonable parallel with mandatory health insurance. |
