Tag Archives: insurance

Health Care Reform, continued

Because health care (chiefly what hospitals, doctors, laboratories, pharmaceutical companies and drug stores provide us with)  is so expensive, most people find it difficult if not impossible to pay for out of pocket. Well duh! Yes, I know, it is so obvious–but I mention this only as a preface to serve as a distinguishing feature to the the health insurance issue. Insurance, in the general sense, is a pooling of risk by individuals who contract with an insurer who promises to reimburse them if stipulated risks or events occur. One can buy insurance against almost any form of risk. You buy whole life insurance and “win” the bet with the insurer if you die earlier than the time by which your premiums exceed the policy payout. You buy term life insurance and pay a lot less during your 40s or 50s because the insurance is for a fixed period during which it is not so likely you will die. Property and casualty insurance covers your house, your car, your boat, or you as an individual against loss due to covered perils or liability to others for harms caused on your property or by your negligence. There are many other forms of insurance, including health insurance. But health insurance has some peculiarties, which partially explains the difficulties of making sense of health care reform.

Like other forms of insurance, the insurance companies ostensibly base their premiums on the risk that they will have to pay out on the health insurance policies. But they earn their income not simply on the difference between the payout and the premiums but on the revenue earned on the investment of the capital in the form of premiums. So when the stock market goes south, they, like other institutional investors take heavy hits. Then again, in the case of health insurance, many major companies are not-for-profit rather than stock holder owned. Accordingly, they don’t have to win on the investments–except they do if they want to price their products correctly. Also, unlike the case of homeowner insurance–payouts for which may ebb and flow with hurricanes, earthquakes and other disasters, but otherwise is relatively less risky for the insurer–medical insurance can reliably expect to pay out substantial sums every year for many people. More on this in the next post.

Oh no, Health Care Reform

I didn’t really want to do it, but I need a topic that lends itself both to some amount of continuity and also fits the notion that this blog is about expressing what really is happening–reaching beyond ignorance and illusion. So as arrogant of me as it may be, I will latch onto this topic and like Clarissa, try to explain it all. First, some bold statements without citations of authority (because it’s my blog and besides, if you don’t believe me you probably won’t check the references anyway): The United States does not have the best health care system in the world.  (If you doubt that, check infant mortality, life span, incidence of diseases and disabilities with other industrialized or “first world” nations). There are more (on a percentage basis and an actual number) uninsured and underinsured people here in the U.S. than in several other nations. We get less “bang for the buck” here than many other countries–in other words, we pay more for inferior care. Oh yes, there are countless high tech tools and innovative processes available to American patients, but they are also available elsewhere and they may not be most effectively utilized. OK, that is it for starters, we will do more on this every few days.