“Health care reform” has been in the news for a long time but none of the proposals that look like they have any chance of being enacted make any sense. It seems to be generally accepted in the US that health insurance should be provided by your employer. This idiosyncrasy of the American system stems from a loophole that allows employers to offer health insurance as a form of tax-free compensation. It proliferated during the 1940s when wages were frozen, so employers used health insurance as a way to sweeten the pot for employees.
This system may have made sense at the time, but many people in America seem to think this is just How It Should Be because That’s How It’s Always Been. There are countless problems with this system, and after thinking about them I find it hard to believe that even the Republican party can support it.
First of all, if your health insurance is tied to your employer then when you lose your job you lose your health insurance. There’s COBRA, but that just says that your employer has to offer you coverage at the price they were paying. If you had been contributing $200 per month to your insurance and your employer had been contributing $200, COBRA means they have to “let” you continue on their plan for 18 months, but you have to pay $400 (your share plus their share) plus a 2% administrative fee. How generous.
Now assume you’re comparing compensation offers from several prospective employers. In addition to the salary you also have to evaluate their health insurance – nearly an impossible task. Do you work for employer A, offering $40,000 but you have to pay $100/month toward the insurance (which your current doctor doesn’t accept), or employer B, offering $45,000, but you have to pay $250/month for insurance that your doctor does accept but which has a $40 copay? Assume you go with employer B, but two years later the employer changes insurance carriers and your doctor no longer accepts the insurance.
On the employer side, they have to employ personnel just to manage these insurance plans and constantly need to be evaluating the best deals, how to keep their costs as low as possible while keeping as many of their employees satisfied as possible, performing arcane calculations like trying to determine the intersection of doctors covered by carrier A and doctors covered by carrier B so they can announce to their employees that “95% of the doctors covered by A are also covered by B!” Well, health care just can’t be reduced to numbers like that.
The health insurance industry is a huge middle-man. It’s a wall between patients and doctors that adds no value in its current incarnation. The fundamental problem is it’s a for-profit industry wrapping itself like a snake around something that’s essentially a nonprofit industry, squeezing the life out of it in the process.
The whole point of any type of insurance is distributing risk. A large pool of people pay a monthly premium and a few people cash out. 1000 people paying $100 in a month pays for one guy to have a hip replacement for $100,000. That’s how it works. Insurance companies make money by making sure they take in more than they pay out. This means raising premiums, bargaining down costs with hospitals and doctors, and denying expensive care. This is what a for-profit company does. However, health care just cannot be considered for-profit. The purpose of a business is to make money. That’s why it exists.
The purpose of a government is to do things for its people that serve the common good that they cannot do individually: building roads, bridges, sewers, schools, maintaining a military. Why not a healthcare system? Why not take the money currently paid by every employer and employee and put it into a huge fund to run the healthcare system, working in a similar capacity to the current insurance companies but without the profit motive? If the premiums were paid as a tax and were uniform across employers and employees, then employees wouldn’t have to worry about losing coverage when they lose their job, or comparing coverages across employees, and employers wouldn’t have to worry about any of this stuff and could instead focus more on running their companies. The GOP touts itself as the friend to small business, so why isn’t it all over this? It would make small American businesses more competitive with their European counterparts who’ve had such a system for years.
I realize this is basically socialized medicine, and the word “socialism” is political suicide and thus we won’t see anything like this anytime soon in the USA. Even without the Red Scare, the insurance industry wouldn’t let it happen. The FUD would be pretty thick – I’d expect to see talk of death panels and rationed care.
In the end I guess it just comes down to what kind of a society you want to live in. Social Darwinism sounds cool, but does it really seem right to have people having to choose between food or vital medicine while bankers make $57,000 per day (by causing the financial crisis that caused millions to have to choose between food or medicine)?
I’ve long wondered why this sentiment seems so much stronger in the USA than in other countries and I have a feeling it goes back to Calvinist Puritans who basically saw success on earth as evidence that you were chosen by God. There’s a strange reverence for the rich and famous in the US, maybe because we don’t have official royalty. Whatever the case, if socialism is the term needed to describe a healthcare system in which everyone’s basic needs are met and it’s not up to an accountant at an insurance company whether or not people can receive medical care, then bring it on.
I should probably point out that many Americans are served by a system like this already. For instance, the VA hospital system for veterans. Why not expand this for all citizens? As Paul Krugman points out:
And what would terrify the right, of course, is the likelihood that genuine socialized medicine would actually win that competition.
Obamacare is I guess a step in a logical direction, given the current political climate. But if you’re legally requiring people to purchase health insurance, why not just go the extra step and make it into an actual tax? Then you eliminate the middle-man. Everybody loves eliminating the middle man! Anybody with any business sense knows that when you eliminate the middle man you get a better deal, right?
I haven’t even touched on quality of care. Americans like to say they have the best doctors in the world, but I don’t think most non-Americans agree. And even if it was true, great care that you can’t afford isn’t of much use. I think it’s well established by now that the US pays much more per patient but doesn’t get correspondingly better outcomes. To say nothing of benefits like maternity leave. Almost every other country on the planet has a fairy reasonable maternity/paternity leave policy, understanding that bringing a new human into the world is a major undertaking. Most offer 2-3 months for the mother with at least some percentage of base salary. The USA offers 12 weeks unpaid leave with the “guarantee” that you can get your job back when you return. Something is clearly wrong.
I don’t get it. I’ve ranted about this to everybody I know, now I’m ranting to the Internet. Oh well.