Insurers Bet the Bad Won’t Happen, so Why Don’t We? Governments Can’t Fix Everything

Many societies believe an individual should be prepared, to take the umbrella in case it rains.

Consequently, opting for that health insurance at work, back in the twentieth century before jobs went overseas and Medicare helped increase healthcare, it seemed like a good idea and most of us checked the life and health insurance boxes, and felt like we’d done the prudent thing. After all, it didn’t cost that much.

Well, “cost that much” matters now. In twenty-first century now, the healthcare business having become involved with the federal government and pharmaceutical companies have priced themselves out of the middle-class pocketbook. This cost-that-matters includes many employer provided healthcare benefit packages where we are lucky to see 80% coverage which would leave a now devastating 20% up to the patient. Employees are not only paying a part of the premium but may still have to cover a deductible. With the demise of a collapsing system, many find ourselves responsible for our own coverage and protection regardless of any insurance we may have.

One generally has a good idea of their health. Most of us know how we feel, what we eat, and what happened to family members. As an example, my appendix did not reach the age of 50, and since both my parents’ appendixes failed, I was not surprised. Living without insurance, once you look at the annual costs of what you normally may need, is not that overwhelming. We each should get a check up and be ready to survive the periodic cold, maybe one or two visits to the doctor, unless we fall off a cliff or get hit by a car or need our appendix removed. Insurers bet that those outliers will not happen, and they do very well making that bet.

We can feel safe embracing that same bet individually. Insurers prove its validity. After the industrial revolution, state governments created their versions of the workmen’s compensation insurance act which, at least before special interests corrupted its workings, helped those who were injured at work. But wherever the government is involved, one can bet things will not go exactly as planned. First an individual gets workmen’s comp, possibly even a nice lump-sum pay off. Afterwards, there are those who go on disability and many augment that by making money off the record. Government cannot control human nature or, without error, manage these well-intentioned beautiful ideas.

Medicare, Medicaid, Veterans Administration, and workmen’s compensation all sound good on paper, but they are far too complicated to administer. What they all have in common is government. So, if we take the government away: will people, indeed can people, take care of themselves. If seniors had that money each month that Medicare takes from their social security checks for Part B, would they use it to buy the insurance they need, or would they buy that gadget from a shopping channel. Some will. Some will not. It depends on their individual problems. But if the price is reasonable, most will protect themselves.

Since the days when kings killed the physician if the patient died, we’ve learned that government cannot control outcome. Studies in 1916 for the government of the United States, Health Insurance: Its Relation to the Public Health, by Benjamin S. Warren and Edgar Sydenstricker showed that those living in poverty were more likely to die of health related problems, and that they could not afford health insurance. A century ago was a time when cities such as Pittsburg, Pennsylvania struggled to provide housing, water, sanitation, and safe milk for their citizens. Paul U. Kellogg describes in “Community and Workshop” in Wage Earning Pittsburgh the massive numbers of immigrants that poured into Pittsburgh and the resulting death from typhoid was compounded by the graft of the corrupt officials collecting taxes to build a safer water supply and sewage infrastructure. Greedy big business was not paying their workers very well. Underperforming city infrastructures caused people to get sick. City officials, politicians and people in the healthcare business have experience.

Consider California, the state where many of her people believe in open borders and state help for anyone in the world in need. In 1917 their social insurance commission claimed in California’s Need of Social Health Insurance that their Workmen’s Compensation Act had been such a great success against injury at work, that social health insurance was the next logical step because the cost of health insurance was beyond the reach of nearly all wage earners. They believed that a voluntary system would not work because of the cost. They tried to have legislature amend their constitution, Amendment 26, without taking the idea to the people for a vote.

Dr. Franklin L. Smith explains the shortcomings of Amendment 26 in Transactions of the Commonwealth Club of California, volume 13, where he reminds that the burden of workmen’s compensation is on the employer. He explains about social healthcare, “Does it not sound like the breaking down of the very warp and woof of our social fabric, the strongest fibres of which are those of individual initiative and independence? Does it not convey the suggestion of a devitalized democracy replaced by an energized bureaucracy—all in the name of material progress?”(page 300) In his closing comments, Dr. Smith added, “You cannot mechanize medicine accept to its destruction.”(page 302) He appreciated the relationship between patient and physician. Dr. Smith suggested doctors join together to provide preventative medicine for a nominal fee, an idea very similar to the concierge concept becoming popular across the nation today. The transcript reflects that the audience regaled Dr. Smith’s comments with prolonged applause.

In 1918, California tried to legislate social healthcare; it failed. In 2017, California tried to legislate social healthcare; it failed. But in 1918, it failed because they determined the idea of an amendment went against their constitution and personal rights; were it to be law, it should be put to a popular vote. In 2017, it failed because they determined it was too expensive for the state.

Governments have experience and they also have constituents who turn to them for the answers, for the help solving their problems. In congested cities replete with high-rise apartment buildings, row houses, and wards of low-income housing, government supplied answers make sense to those in need. But, when people turn to the government for help they need to be careful, because they open the door to government decisions about their life, the sad life and death experiences that exists today in countries with socialized medicine. This is America in the twenty-first century, and we need to decide how much a person’s lively hood and wellbeing need to be shouldered by the government. Letting the government shoulder for one’s wellbeing and lively hood sacrifices one’s freedom.

Compare 1900 with 2000 and we find that the poor still cannot afford health insurance and the poor are more likely to die since they likely do not have a family doctor. In 2000, the poor includes the middle class, a far greater number than the immigrants living in areas similar to one of the hill neighborhoods in 1900 Pittsburgh. In 1900, big business took advantage of immigrants and paid them low wages. Today, the influx of low skilled labor has kept our wages stagnant for over thirty years, but while the wages stayed stuck in the 1980s, healthcare prices kept going up. This is 2017 and we know how to manage milk, water supply, and sewage; what we need now is more jobs that pay enough that people can afford necessities including health insurance for catastrophic care.

While, roads, water and sewage are critical infrastructure in the management of a city, workings a city should manage, health care is not; it is a personal matter. We need government to back away from healthcare. We need businesses to let free-market insurance companies and groups of doctors sell directly to people and stop providing health insurance as a benefit.

When health insurance is a benefit it comes and goes with the job. As early as 1913 when income tax became a bigger part of our lives, companies were encouraged to provide health care as part of their employee benefit package. For mining and manufacturing it seemed to make sense at the time, but people took jobs and stayed with them for life. That is no longer the case, so people need to have options to buy insurance across state lines and take it with them where ever they go regardless for whom they work. Insurance companies do not need to be making deals with businesses for health insurance for their employees. Let the employee become the individual who makes their own deal. Let the individual be responsible for their decisions, and their life.

Let the individual risk a bet on his or her self.


Sources are free Google books:

Kellogg, Paul U. “Pittsburgh Community and Workshop.” Wage-earning

Pittsburgh. Ed. Paul Underwood Kellogg. New York: Survey Associates, 1914.

Smith, Dr. J. Franklin. “No. 8—Health Insurance October, 1918”. Transactions of the

Commonwealth Club of California Volume XIII February 1918 to January 1919. San

Francisco, 1919

Social Insurance Commission. California’s Need of Social Health Insurance. Sacramento.

California State Printing Office, 1916.

Sydenstricker, Edgar and Warren, Benjamin. S. Health Insurance: Its Relation to the Public

Health. Washington Government Printing Office, 1916.

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