Stop treating health insurance as a product lest nothing changes

One of the biggest problems with health insurance is that we allow Republicans to treat it as if it is a consumer product. It is not.

Republicans love to talk about leaving health insurance to market forces. Their ideological blindness or callousness leads them to believe that what is good for a capitalist market is always right for the individuals it purports to serve. The reality is that we have made the capital markets our God, our religion as opposed to making it a tool that makes life better for us all.

A company does not sell a product that is not profitable. The fiduciary responsibility of business in a capitalist market is to their shareholders, not the customer. The client is, but a means to transfer wealth to the shareholder and the executives running the business.

A company cannot make a profit on an unaffordable product. Prices must rise, or costs of manufacturing the product must go down lest the product ceases to exist. And that is what is happening to health insurance under Obamacare. Some insurance companies raise their prices while some just abandoned the health insurance ‘product.’ Because of proper regulations, they could not make the product less expensive. In other words, Obamacare did not allow health insurance companies to sell their customers a crappy insurance policy.

Republicans argue a lack of choice allows these businesses to charge exorbitant premiums. They claim overregulation forces health insurance companies to provide services people don’t necessarily want. They say that disallowing interstate health insurance purchases reduce competition and competitive pricing.

If one is honest, there is some truth in those statements. And that is because as long as one sees health insurance as a product, that abridgment of market forces is detrimental to the company’s bottom line and also to insurance pricing for Americans.

Health Insurance as a product is immoral

Insurance as a product is corrupt on many levels. The sole purpose of insurance is to collect money from the masses who uses said money to pay the bill for those who get sick. Since we are never sure who will get sick, it is a way to mitigate the high cost of getting sick. It is bad enough that we allow a middle person to profit for paying a bill with our money, it is worse when the intermediary can risk-assess those people who they select, leaving those with pre-existing conditions with poor or unaffordable options. While Obamacare mitigated this and the new Republican plan preserves said mitigation, the new GOP plan allows insurance companies to sock it to older Americans, the ones likely to have the most pre-existing conditions.

For any insurance scheme to be viable, everyone must be in the insurance pool. The only way to do so is to force sick, healthy, young, and old to purchase insurance and henceforth the mandate. The current GOP plan gets rid of the mandate and instead applies a hefty 30% penalty for anyone with a two-month lapse in coverage. This penalty could cost more than a mandate given the cost of insurance for someone who may be having financial difficulties.

Altogether the GOP repeal and replacement of Obamacare would be much worse than the correctable problems in Obamacare. Mother Jones’ Kevin Drum says it best in his article titled “Republicans Unveil Their Health Care Plan. It’s a Bloodbath” where he also links directly to the bill.

Republicans have finally released their shiny new health care plan. It’s pretty much the same as the discussion draft that leaked a couple of weeks ago, and includes the following basic features:

• Subsidies (in the form of advanceable tax credits) are age-based, starting at $2,000 for young people and going up to $4,000 for older folks.
• The subsidies begin to phase out above incomes of $75,000 ($150,000 for households). This will affect about 10 percent of the population and probably reduces the cost of the bill by about 5 percent at most (since most people at that income level already have insurance through their employer).
• Obamacare’s Medicaid expansion is frozen in 2020 and then gradually phased out.
• The bill allocates about $10 billion per year for high-risk pools run by states. This is far too little to work effectively.
• The tax meant to pay for everything was removed.
• Insurers are required to cover everyone who applies, even if they have pre-existing conditions. However, if you have a coverage gap longer than two months, insurers can impose a premium surcharge of 30 percent for one year. This “continuous coverage” provision is designed to motivate people to buy
  insurance,
  since the bill repeals the individual mandate. However, this is very weak motivation and won’t persuade very many young, healthy people to get covered.
• The funding formula for Medicaid is changed to a “per-capita allotment,” which is a fancy way of saying it gets cut.
• All the Obamacare taxes on the rich are repealed.

In other words, the GOP is making insurance more of a product as it repeals the taxes on many with means who currently support it.

Here is the reality. We do not decide when we get sick. When we get sick, we cannot just shop around for the hospital and doctor who provides the best price for some disease folks do not yet know they have. Sickness does not know our socioeconomic condition so having a choice to purchase a plan we can afford means we get wealth based health care. Health insurance is not a product. Selling it that way is immoral, unamerican, and downright evil.

Learn why Single-Payer/Medicare-For-All is our future as we use Obamacare to buy time till we get there.

Call your Senators and Congressional Representatives every day and let them know you do not want the Affordable Care Act repealed. If you do not know how to get in touch with them, click here.