09 January 2013

The Tragedy of Obamacare

Let’s look at what insurance is supposed to be: when a lot of people each face the possibility of something financially catastrophic happening, they enter a relatively small amount of money into a pool. They understand that this event, say, an earthquake destroying their house, may not happen to them, but if it were to happen, they would be compensated for the cost of repairs out of the pool. This system works because even in remote cases, the number of participants far outweighs the actual number of people who will end up requiring a payout.

Imagine how insurance would look like if the thing that you’re insured against was incredibly common, almost expected to happen, and the insurance company could actually refuse to compensate you? The dramatically increased risk would result in even an even higher cost to join the pool, almost to the point where you are paying a third party for the outright cost of your individual payout when you’re not receiving it, and the possibility of denied payouts would degrade the quality of the insurance product to the point where it could be considered substandard and superfluous. Now imagine that participation in this insurance pool was mandatory.

This is the state of the current US healthcare system; Obamacare, as it is called.

Why do we need health insurance to cover our routine checkups and care? One reason is because it is not covered by any other form of benefit that we receive, so we try to save money by invoking insurance payouts for non-emergencies. Another reason is because the cost of standard healthcare is so high. Have you heard of people stumbling into the hospital and walking out with a $15,000 bill? It’s by design. Health insurance companies want healthcare to be expensive. An economist will explain academically how various factors caused the cost of health care to rise so astronomically (loss of focus on preventative care, fewer regular patients as a result, etc.), but it’s been the insurance companies who have profited from and who may have even fostered these conditions. Let’s start out by acknowledging them:

1) Health is incredibly important to us as individuals. Obviously. It is hardly optional. This makes it a persistent market.
2) If routine healthcare were affordable or provided on a national level, insurance would only be necessary in very select cases; the ones with low-to-medium risk and high cost. Thus the pool would not need to be so large.
3) When the cost of caring for even the smallest (and sometimes very common) ailments is capable of bankrupting a middle-income family, insurance becomes necessary.

Thus begins a natural economic cycle in which insurance companies become the target market for healthcare billing because they position themselves to provide the highest potential of profit for providers. This inflates the price of goods ($75 for a swig Listerine, anyone?) and services to an astronomical level, not because they actually cost that much, but because insurance can and will pay it. This prices out the average consumer, requiring them to purchase insurance for even routine healthcare needs. Insurance companies have thus solidly established themselves as a parasitic entity upon the interface between the American people and their basic human need to stay alive and well.

And now, by law, we have to hook ourselves into this money-sucking machine. We shouldn’t even call it insurance at this point, and it certainly isn’t healthcare. We are paying a middleman to inflate the market while we receive substandard services. Somehow, the soul of what we’re trying to accomplish through insurance and through a national healthcare initiative has been lost.

It makes very little sense for an individual to pay $400+ a month for health insurance, in its current incarnation. If an established company or union employs you, you may not ever feel this cost on your paycheck; your company pays it in bulk and you probably don’t even care about this argument because you’re insulated from the economics entirely. However, if you’re a freelancer, contract worker or work for a very small company, health insurance is such a hit to your income that going without it is usually a viable option. It was for me for the past 4 years, but I will soon be forced to buy in.

I currently pay around $430 for my health insurance, which is arranged, not provided, by the small company that I work for. And that’s the cheapest option I was given. They are able to compensate me for part of this cost, per my employment agreement, but that is irrelevant to my point. This is how much it costs to insure me as an individual. My girlfriend, who is a freelancer, pays even more. That’s a lot of money. And I’m perfectly healthy. It’s money that comes out of my pocket that I am not benefitting from until something bad happens. I could go ahead and arrange a bunch of appointments just to feel like I am getting my money’s worth, but that is also beside the point. As much as I pay, my coverage plan would not fully compensate me if something bad were to happen in the first place.

Whether you believe that the government should provide universal health care for its citizens or if you believe it should be up to individuals to support themselves, this current method is neither. It is a submissive bow to health insurance companies, who in return add nothing of value to the healthcare process. It is corporatism embodied. It is a boldfaced sell-out to private interests at the cost of the nation's well-being. It's immoral, irresponsible, and, frankly, frightening. An absolute tragedy.