Tuesday, August 18, 2009

Random thoughts about health care

As you can see from my prior posts, the health care bill, HR 3200 America's Affordable Health Choices Act of 2009, has been on my mind lately.

But here's what struck me this morning...

When I decide to purchase car insurance, the rate I'm charged is based upon many factors, including my prior driving record. If I've had lots of tickets and accidents, I'm going to pay a higher rate. If I'm a teenager who's just started driving, I'm going to pay a higher rate than a middle-aged driver because I'm more of a risk. This makes perfect sense to almost everyone who drives. People want to be charged based upon their record - not someone else's. And we are perfectly happy with insurance companies charging more to cover people who have less-than-stellar records or higher chances of actually using the insurance coverage.

The same goes for life insurance. If you're young and healthy with good habits, you're likely to pay a lower rate than older or terminally ill individuals - the thought being that the farther away you are from your date of death, the lower your payments over the years need to be to cover the costs of the eventual payout. This, too, makes sense to almost everyone.

So why is it so many people have a different opinion about health insurance?

The same logic from auto and life applies equally to health insurance. If a person is young, healthy and has good habits, they don't pay as much as someone who is older, has existing illnesses or pre-existing conditions. Why should the rates for both types of individuals be the same? We don't expect it in other types of insurance, why do we change our perspective when it comes to health insurance?

HR 3200 restricts insurance companies from having higher rates for people with pre-existing medical conditions or for their age, despite the fact that these individuals cost more to cover. For some reason, politicians, and many Americans, think that you shouldn't have to pay for your own costs.

Why is that? What makes people think that their own conditions should not be part of their costs of coverage? Why do they think that their fellow Americans should pay for them, despite their own behavior?

Because that's what the bill would do - require others to pay a higher rate so people with higher costs don't have to pay as much. Democrats are constantly talking about 'fair' ... how is this fair?

And if we accept that this is not fair for car insurance and life insurance, how do we accept that it is somehow fair for heath insurance - or anything else, for that matter?

Now, if you happen to think that car and life insurance should be treated the same way as health insurance is in this bill, I can respect that. I may disagree with your position, but at least you're consistent in applying the same logic and opinion to all similar situations.

But if you're okay with being 'rewarded' for good driving by having lower rates and being charged more if you're a bad driver, how can you NOT support the same approach to health care and, accordingly, oppose this bill?


On the attacks so many on the right are getting from those who support 'Obamacare,' Eric Odom, Executive Director and Co-Founder of the American Liberty Alliance, makes a really terrific point worthy of consideration:

"The problem these pro-government groups has is that they seem to be miscalculating the silent majority of America. They lash out at some of us who have been a part of a true grassroots movement in a leadership capacity, and in the process they fail to see how it insults hundreds of thousands if not millions of Americans who are all a part of this.

The Silent Majority doesn’t subscribe to an email list because we’re told to, we subscribe because we choose to.

We do not show up at a rally because we’re told to. No, we show up at rallies because we choose to.

The silent majority is not paid to rally, we aren’t bussed in from one state to another, and because of this we don’t have to manipulate the scenario in order for it to appear grassroots… because it is!

And the majority of Americans know it… because we’re all a part of it.

My message here is simple. You’re seeing a lot of back and forth right now. It’s important to note, though, that one side doesn’t like the message. The other side doesn’t like the messenger."

1 comment:

Kadim said...

You could make the argument that whole life insurance is fairly similar to what's being proposed.

Any 18 year old who gets whole life insurance is likely to be given the same rate as any other 18 year old. At the end of their life, or at some pre-defined time, a big payout is made.

This is pretty much like health insurance...since most healthcare spending is made during the last few months of life--a big payout occurs.

Since a life insurance company, when issuing a whole life policy to an 18 year old, can't predict what and when the 18 year old will die, risks are pooled with others. Some will die quickly, some will live long, etc.

If you thought of a health insurance scheme as a cradle to grave system with shared risk pooling, like a whole life insurance policy issued to someone young, then not having discriminatory pricing (based on age, lifestyle, health, etc.) makes sense.

If you thought of it in more of car insurance sorta way--where you can enter and exit the market at will, then price discrimination makes sense.

Of course, car insurance is price discriminatory only in the short run. There is an average american driver, they may go through cycles of tickets/bad luck/age, etc, but for the most part, 80% of them, if not more, pay the same for car insurance over the course of their lives (with some variations for the car driven, state insured, etc.)

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