Insurance companies are not evil

We have entered a new year in which we are inaugurating a new President, so some old debates have been stirred back up. Namely, the debate surrounding Obamacare and health insurance. I know I am going to step in it here but, contrary to popular belief, insurance companies are not evil.

Unfortunately, there is no easy answer to this debate because both sides of the debate have hard questions to address. Opponents of Obamacare must answer the hard question, “If the government doesn’t step in, then what happens to the terminally ill or extremely sick?” Proponents well, I cannot even attempt to summarize everything that’s wrong this thinking. (Now you can see where I stand)

How can I be against universal healthcare?

Before I tell you why I am against universal healthcare, let me give you the reasons why I “could” support it. My family has found themselves on the short end of the insurance stick many times. First, there was my baby brother Mike and cancer diagnosis at age 10. Shortly after, my dad’s company switched insurance companies. The new Insurance company refused to cover his pre-existing condition for a year. So, dad had to find an alternative for that year. When Mike was later diagnosed as terminal his insurance refused to fill pain medications several times. Later, I took a new job and cost prohibitive premiums made it impossible for us to cover the family. We went without insurance for 5 years.

Why do I believe what I do?

Despite all of these troubles, I am still against universal healthcare. Why? In my opinion, the best reason against universal healthcare lies in the foundations of our nation. America was not built as a socialist or communist nation, rather as a free-market, capitalist, democratic republic. Our forefathers drafted our Constitution to ensure we had the right to have a say in all we do. They gave us right to vote for our representative leadership and the freedom to choose. In this society, we are all free to make our own decisions. We can vote for whoever we want, we can buy or not buy what we want, we can start a business or work for others, etc. This is the true power of our Constitution–choice. The government was NEVER to be in our daily lives as much as it is now.

We live in a capitalistic society and we’ve used the power of choice to influence countless economic issues. Why can’t we use the same for insurance? The problem starts with the labor unions in the late 1800s and early 1900s. During those times, work conditions were terrible–long hours, poor environments, etc. Labor unions stepped in and fought for the rights of the workers. They won on the points of hours, work environments, pay etc. As a result, a large majority of businesses started offering paid vacations, holiday time off, and yes, even healthcare benefits. They didn’t do this because it would help their bottom lines, they did it because they knew that if they didn’t, people wouldn’t work for them.

Illustration:

Several years ago there was a debate in Indiana about banning smoking in public buildings (not just government, but also private businesses). The argument was that smoking in these places put our kids at risk. On the flip side, in America we don’t HAVE to go anywhere we don’t want to go. So, rather than banning it for ALL buildings on the state, why not just stop patronizing these places?

The power of a choice goes a long way in business. How? Say your favorite store allows smoking and you are allergic or have kids, what do you do? STOP GOING THERE! When a business owner sees or hears that enough people will not support him because of HIS choice, he has two options: Change his practice or suffer the financial consequences. Simple as that–you don’t have to shop there, so don’t. Take the money out of his pocket and give it someone else.

How does this relate to insurance?

Fast-forward to the early 2000’s. In 2005 I damaged my right knee and had no insurance. In 2006, I finally had an MRI and knee surgery. During that process, I just went to the hospital for the MRI because I knew the insurance would pay it. That MRI cost my insurance company $2,000+ in 2006. A few years later, I needed an MRI on the other knee, I went right back to the hospital and this time the insurance company only paid $800–my portion was $1200. Why the change?

About this same time, small MRI/imaging clinics were popping up all over the place doing MRI’s for between $600 ad $800. Surely these places were using shoddy equipment and lax procedures right? No. They were using the EXACT same machines and receiving the same quality images. The insurance stopped paying the full amount because they knew we could get the same MRI for far cheaper. Again, a few years after that I needed another MRI (no surprise to anyone that knows me). This time I went back to the hospital for some reason and that time, the hospital ER was now only about $1000. Why? Because people stopped going to the hospital because insurance wouldn’t pay–they had to look for the better deal.

Long-term solution

I understand that there were problems with the insurance industry before the government stepped in. However, instances like the above were becoming more prevalent and WOULD have eventually corrected the system. How you may ask? Think about all of your healthcare needs. Do you go the doctor thinking about how much it REALLY costs–I mean other than your copay? We don’t because except for the $25-45 copay, we don’t think of it. We know that if we have insurance, it only costs us that $25-45 copay, but what about the rest? My PCP typically costs about $115 per visit and all of my specialists are between $300 and $450 per visit. My cost is $35 or $45, so big deal right? Why do the specialists charge so much? Because they know that insurance will pay it (or a lot more than the $35 or $40 we pay.

Have you ever offered cash to a doctor for the whole visit? Typically if you’re a “cash” customer, the bill is 30-40% less (or more) than what an “insurance” customer would be charged. Some of that is all of the processing time involved, but some is just plainly because insurance is out there paying it. Do we do the same thing for the mechanic for our cars? No, because that is OUR money. When we shop for a mechanic, we try to find the BEST mechanic we can for the BEST deal. The same goes for plumbers, electricians, etc. Health care is one of those industries where the consumer has been taken out of the equation. Maybe if we had to think more about the financial impact (not just for ourselves), then maybe we’d be more diligent in our choice?

Conclusion

Why do we go to those specialists anyways? Are they the best? The most convenient? The closest? Think about it the next time. I do and I have a “cadillac” policy–albeit a policy that is self-funded by the university. That means that every penny of the “insurance” payments comes out of the University budget. If I make prudent medical decisions, where does the savings go? Better pay? More benefits? Upgraded facilities? Where do I spend MY savings?

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