Amer. Intelligence Test: Is Health Insurance Different From Home or Other Insurance?

America’s policy on Health Insurance is about to change again; but don’t worry it won’t be the last time. Eventually Congress may determine what it wants the nation’s healthcare policy to be and toss out a new set of rules; or they will simply let the President’s executive order sort itself out across the nation, the healthcare industry and insurance business. Will this fix the problems? As surely as our political leaders have solved the nation’s other problems, particularly healthcare itself, they will deliver the same degree of competence to the health insurance dimension for us. So, I am sure you are all feeling much more assured and at ease with this outcome. Please duck and cover.

Even though all the issues and risks with health insurance are now resolved, it may be interesting to see how well our representatives have understood the needs and reality of health insurance. Based on their decisions you can validate if the answers to the following test conform to theirs. While it would be nice for the issue to be done with, it isn’t because insurance is a system that responds to the factors that control it. We either have created a national approach to healthcare insurance that fixes the problems we were facing or we didn’t. Which is it?

Question A:   Are the financial demands and requirements of health insurance different from those of home insurance, auto insurance, flood insurance, or life insurance?

(1). Yes

(2). No

(3). They cannot be compared

Question B:   Is there any portion of healthcare that is or should be a citizen’s right?

(1). Yes

(2). No

(3). We don’t seem to be able to decide as a society

Question C:   Within the healthcare / health insurance industry, which of the following industry segments is the major cost-causer?

(1). Insurance companies

(2). Hospitals

(3). Physicians

(4). Drug companies

(5). Government

(6). Medical equipment manufacturers

(7). Financial/Investment industry

Question D:   Who should decide when a life-saving treatment is too expensive to be covered by one’s insurance?

(1). You, the insured

(2). Insurance company

(3). State regulatory board

(4). Federal regulatory board

(5). Statistical model

(6). Financial model

(7). Courts (and obviously lawyers from both sides)

(8). Congressional legislation

(9). No one, there should not be a limit

Question E:    Is healthcare and health insurance dealt with in the same way that we handle the counterparts of insurance for home, or auto, or flood, or life?

(1). Yes

(2). No

Question F:    If a health young person (or their parents) decides to not purchase health insurance and is injured in a sports activity which requires a lifesaving medical procedure beyond their affordability (e.g., two-times their total assets’ value) should it be public policy that they die due it being beyond their means to pay for?

(1). Yes

(2). No

Question G:   Do High-Risk insurance pools provide a more cost-effective approach to pre-existing conditions, specific genetic populations, or demographically variable cost markets?

(1). Yes

(2). No

Question H:   Is there a public cost to having uninsured people in the population?

(1). Yes

(2). No

ANSWERS:

Answer - A:  2 - No

Rationale - A:      Insurance is a product that like any other product has a cost, a price and either a profit or loss based on how its particular market-events transpire. If cost (payouts) exceed price (premiums) then the insurance company could go bust or will need to raise rates/lower costs. While each insurance market serves different environments, each operates fundamentally the same.

Answer - B:  3 – We can’t decide

Rationale - B:      There is both a recognized division in our society and what I’ll call an unacknowledged reality. On the political dimension we have folks who hold you are not guaranteed any right to medical treatment as a right, and we have those who argue that you are. I suspect neither is completely right nor completely wrong; but that will hardly settle the disagreement.

I believe every state mandates that hospitals provide emergency medical care. There’s nothing about that care which renders its cost free and there is no way to avoid the financial balance sheet, so it gets paid for. If states require this treatment under their law, how is that not a right? I’m sure we can quibble, but if it’s something that you have a valid legal claim to then whatever word you use is going to ultimately equate to you have a ‘right to’ that healthcare.

Now what about the ‘should’ have part of the question? Here the issue is convoluted in the sense that does a society have any reason to provide any healthcare to the public at large? Since the US and its states provide a large number of healthcare services to the public across a wide range of social areas there certainly must be some logic to providing it. Does that constitute a right? If our society’s interests are in danger from not providing such healthcare, would the US be fulfilling its obligations to the public/nation if it did not do this? If it must be done by the nation for the nation then it’s a right.

Does this mean all healthcare is a right? No. But that doesn’t answer the question or settle the issue. I think we have reached the state of “Complexity”. This is a question that needs sound, rational and reasoned judgement. Thus it is not suitable for politicians.

Answer - C:  2 – Hospitals

Rationale - C:      This is simply just the industry segment that has the biggest portion of healthcare spending about a third. You might think that physicians got most of the money, but you have to realize that a large percentage of physicians are employees of hospitals. Now Item 7 – Finance/Investment isn’t easily quantified nor even readily recognized as a part of the healthcare industry; however, we are talking about businesses and a that includes the profit-motive. So, the drive for profits (the imperative for profit) is necessarily pushed on all the segments. As long as we are dealing with a free-market with competitive players that are not constrained by externally imposed requirements or interferences in allowing the market to decide, then fair prices would be expected. Now, if you believe that the healthcare industry is a free-market then you do not understand healthcare in the US. Don’t jump to the conclusion that it’s realistically possible to just operate healthcare as a free-market; there is no reason that that is likely to be achievable or even actually beneficial. Healthcare is like most things in the universe, it’s never as simple as you wish it was; and if you think it is then you probably don’t competently understand what you think you do.

Answer - D:  2 – Insurance company

Rationale - D:      Since insurance is a business contract, the terms and conditions are defined within the contract that you choose to purchase or not. At least that’s the way it should be in a perfect world, which of course we don’t live in. But in a capitalistic system this would be the primary determining principle. In reality, the ability of the consumer (purchaser) to competently understand the product is highly improbable, so the need for Items 3 through 7 to be logically involved is going to play a role. Item 8 – Congress will also play their role but this will be to mostly screw up a reasoned and principled approach to delivering healthcare in the best interests of the nation.

Answer - E:  2 – No

Rationale - E:      If you didn’t purchase home, auto, flood or life insurance and suffer a loss then you or your heirs suffer the consequences. If you don’t purchase health insurance, then depending upon the nature of your infirmity you may yet receive medical treatment in emergency rooms or because state law requires treatment be provided in certain circumstances.

Similar efforts are not going to be part of home, auto, flood or life insurance. If the flood is declared a national disaster, then a loan may be extended under favorable rates. There is clearly something different about healthcare in our societal views and values. This shows that the rules we use must suit our values, principles and the common good.

Answer - F:  2 – No

Rationale - F:      This is the correct answer for a society that values life. The problem is that the social value doesn’t handle the financial facet of our healthcare system or policy. The dilemma is that both answers are actually true, since we are not talking about a known fixed situation. Healthcare varies widely, and the financial aspects of that healthcare are just another complex dimension. The cost of one instance may fall within a healthcare policy that is accepted as national policy, another instance doesn’t fit within the parameters of that same policy. The difficulty of course is setting the policy. Unfortunately, we rely upon the most ill-suited and incompetent people to define our national policy and thus we have the inane healthcare system that is a national issue and national disgrace. Yes, we let Congress make the policy.

Answer - G:  No

Rationale - G:     This is a mathematical matter of the economics of healthcare. High-risk pools are nothing more than a “left-hand doesn’t know what the right-hand” is doing ploy. It doesn’t make the healthcare costs more affordable, it just moves the “peas” around. The most likely outcome is that it adds to overall costs of healthcare and reduces the quantity and quality of care provided. It’s been shown that High-Risks pools don’t work so trying again will be a good test of Einstein’s advice.

Answer - H:  1 – Yes

Rationale - H:      As noted above we treat uninsured individuals within our healthcare system. We may not provide every and all medical services to them, but we don’t spend zero on them either. If we remember the principles of economics and laws of physics then you should connect the dots immediately. If the uninsured don’t pay, who exactly does?