The insurance game is a balancing act involving premiums, benefits and enrollees. It works (makes a profit) only when the insurer can control two out of the three elements. When the government mandates coverage for everyone and sets standards of treatment, the system breaks down - insurers are driven out of business or it becomes one elaborate subsidy for the companies and a work-program for medical insurance filing clerks. For an insurance company to make money there have to be people paying premiums who get little or no benefits. Those kind of persons are hard to find when literally everyone is enrolled and their aging puts added demands for ever more costly benefits.
Employer-funded plans prosper because their enrollees need the least amount of medical care: they are young and healthy. Try to expand that program to include all non-workers over 65 and the wheels start coming off. That is why any national health care plan that is built on an insurance model is doomed to failure. It makes no more sense than attacking hunger with food insurance.
Once you have a population with increasing demands but limited resources to pay premiums the profit potential is squeezed out of the formula and insurers take their money out of the insurance game and put it elsewhere. This is why there is no market-driven solution to the healthcare crisis in America. And that is why those of us who are serious about healthcare reform know we have to be looking at a single-payer plan, modeled after Medicare (without privatization), that implements an electronic filing and payment system.
And what about costs? The first thing is that we have to kick the habit of looking at the cost of everything and the benefits of nothing – the insane tax-reduction mania that has mesmerized some otherwise sane politicians. Health is not just a checkbook item; it impacts the very quality of our life. There has yet to be a therapy that trumps prevention when it comes to how any of us approaches our own health. But costs can be reasonable if we do the following: (1) take out the 30+% overhead costs associated with the insurance approach, (2) credit the savings preventive medicine brings, (3) credit the system for improved productivity through reduced absenteeism and drug addiction, (4) credit efficiencies in doctor’s offices, clinics and hospitals and (5) add in savings from negotiated lower pharmaceutical costs. Do this and we are well on the way to providing everyone in America with basic health care with no new taxes.
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