For all our sakes, stop calling it insurance.  It isn’t, and thinking of it as insurance has got us into a heap of trouble.   

With the political left agitating about the need for a massive overhaul of the manner in which our health care is handled.  The preferred approach on the left has always been a national single payer plan.  Their promotion of this idea dates back to the days of LBJ and the Great Society.  Ted Kennedy has been after nationalization of all health care matters now for almost half a century, and it seems that he won’t die until he sees it achieved.  The last major iteration in the cycle, often referred to as Hilary-care was derailed when a significant portion of the medical professions objected to their forced into government service with criminal penalties for anyone treating a patient privately.  This time around the government health system machine has opted for stealth.  Instead of an instant takeover they are proposing a plan that will, at minimum take a few years to crowd private health care systems out of the market.  Stealth seems more likely to succeed because the intended targets appear unable to appreciate the peril, and have become oblivious to the long-term effects of a government takeover, to themselves and their patients.  

Meanwhile, everyone addressing the issue appears to have no idea what is wrong with the system as it is presently managed.  It is the perception of insurance that is at the heart of the issue.  Insurance, properly understood does not mesh with health in the vast majority of situations because insurance is linked inextricably with risk, while health care is in many ways more a matter of regular maintenance.  

Ask any insurance professional what a policy covers and they will tell you risk of loss, and that loss is catastrophic and unexpected.  Take for example, if another driver who isn’t paying attention hits your car.   (Reminder, don’t drive and read IntellectualConservative at the same time.)  It is unexpected, catastrophic, and causes a loss.  Insurance will pay for collision damage, but it will not pay for regular oil changes, replacement tires or belts and hoses when they wear out.   It certainly wouldn’t pay for the new motor mounts I needed last year after about 250,000 miles.  

By the same logic, insurance should pay for when you fall and break your leg, or suffer a heart attack, or come down with some other severe illness.  It should not pay for anything reasonably necessary as regular maintenance on the human body such as vaccinations, annual checkups, and confirmation that you have come down with a cold or the flu.  Unfortunately, this is exactly what the average person believes health “insurance” is for.  They want it to pay for the equivalent of oil changes and new tires, and this is one of the major reasons why health payment plans are frequently so expensive.  It is the equivalent of having a zero deductable on your car or homeowners insurance.  

A government, universal, plan covering all health needs will not be cheaper than what the today’s health coverage companies provide.  It will certainly be more expensive, which is precisely why such a plan leads in unavoidable rationing.  First, in order to cut costs the amount paid to professionals such as doctors, nurses, technicians and so on for the work they do will have to be reduced.  However, this will be insufficient, as the amount of work in an “everything covered” plan, which the folks on Capitol Hill envision will lead to increased demand.  If you think the people going to emergency rooms for a case of the sniffles are a problem, think how many other minor ailments will become a case for the doctor when there is no cost to the patient.  Demand will skyrocket, while the supply of professionals will fall due to the low level of compensation.  Or, if the level of compensation is kept high, then the cost to the public will be past the stratosphere before we know it.  There is no way on earth that the tax paying public can afford it.  The result is either a bankrupt system, or a system, which rations care, and/or provides a low level of quality and service.  Probably both.  

One other aspect of the current American system that makes it so expensive is accounted for by the high quality of service available.  Every hospital wants to have the latest and most effective treatments ready at their location.  They don’t want to take second place to anyone.  The difficulty with this is that new technology; particularly extremely new technology is expensive.  Consider what it costs today for a flat panel television compared to ten years ago.  This, combined with the pace of technological development, creates a massive need for continuing capital investment and drives up the cost of doing business in the medical field.  Anyone who wants to cut costs can do so by reducing the rate at which innovative technology and new medications are introduced, but this will also reduce the level of quality overall, and likely prevent effective cures from being used.  

Finally, there is the problem of the cost of new medications.  This has become progressively higher over time as the difficulty of finding effective medications, working on the molecular level increases.  Add in the regulatory costs, premarket testing, and it is no wonder that new medications are so expensive.  Someone has to pay these costs and the one who gets stuck is the patient, or the person who pays the bills.

Is there an answer?  Yes, but it is not one that a lot of people will like.  First, they have to give up the idea of “free health care.”  They must take responsibility for their own needs, and be willing to pay for them, at least up to a point.  Second, health plans should be freed from government regulations that specify what they can and cannot provide.  Plan subscribers should be able to pick from a variety of different compensation options, which can fit their individual needs and budgets.  Those who are chronic illness victims are the only ones who should be eligible for government assistance in this, which should be in the amount of a subsidy that they get to use any way they wish.  

Finally, to deal with the problem posed by people who get tax free medical coverage through their employers, give people who don’t have that benefit a tax credit (that’s credit, not deduction) for the amount they have to pay for health coverage, and for all our sakes, stop calling it insurance.  It isn’t, and thinking of it as insurance has got us into a heap of trouble.