Insurance companies - do they deserve to die?

Normally, I write my own material. Sometimes, however, I find an article that already says exactly what I wanted to say! I am reprinting one here from Investors Business Daily, a newspaper my father subscribes to. It explains the situation with insurance companies better than I ever could.


Real Debate Is Individualism Vs. Collectivism
By ROBERT TRACINSKI | Posted Tuesday, August 11, 2009 4:20 PM PT

The goal of the Democrats' plan for health care reform is coming more and more out into the open: They want to eliminate health insurance.

This is the line of attack the Democrats have chosen as they've gone into the August recess:

Private health insurance companies are evil, and big government is here to save us from them.

According to the New York Times, President Obama is planning an "August offensive against the insurance industry." It is "a campaign of increasingly harsh rhetoric" that is "intended to drive home the message that revamping the health care system will protect consumers by ending unpopular insurance industry practices, like refusing patients with pre-existing conditions."

That part about pre-existing conditions gives the game away. Health insurance companies refuse to cover pre-existing conditions for the same reason that you can't insure your automobile after you crash it.

Insurance is a form of financing for the unexpected and unpredictable. It is not a mechanism to force somebody else to pick up the tab for expenses you have already incurred.

Do the Democrats even understand what insurance is? Insurance is a form of financing. It is a contract under which a health insurance company agrees to pay for medical bills that could run into the tens of thousands of dollars, if you are hit by a bus or are diagnosed with cancer, so that you don't have to pay for those bills out of your income or savings.

So let's ask the question the left never asks: How is it possible for an insurance company to pay for these giant medical bills?

Welfare, Not Insurance

For every person who needs open-heart surgery or chemotherapy, there have to be a certain number of other people who are paying their premiums but haven't gotten seriously ill. If the insurance company has gotten its calculations right, the expenses for any one person's catastrophic care are balanced out by the premiums other people pay "just in case."

You can see how Obama's demands undermine all of these calculations. To ask insurance companies to cover a patient after the tumor is diagnosed is to ask them to take on a known expense. Combine that with another of the president's demands — that insurance companies can't charge higher rates for those who are at higher risk of getting sick.

So if insurance companies have to take on a known expense and can't charge a higher rate for it, how are they going to pay for it? By raising everyone else's premiums, redistributing their wealth to the new freeloaders.

This isn't insurance, it's welfare. And that's the whole point.

Government regulations and enormous government spending have already distorted the health care market for decades, but the current legislation is the coup de grace. Its whole point is to force insurance companies to act as if they are government welfare agencies.

And when the insurance companies collapse under that artificial burden, the government will drop the pretense and have the welfare agencies, under the banner of the "public option," take over.

Don't be fooled by labels. The "public option" is not insurance, because it is deliberately designed not to balance premiums against risk.

Precious Right

And instead of choosing how much coverage you are willing to pay for, everyone is forced into a plan designed by an Orwellian "Health Choices Commissioner." When you get sick, you don't have a contract with a private company that you can enforce. You are dependent on benefits that are doled out uniformly to everyone by the government.

There are no independent individuals in this system. It is designed to make everyone dependent on the collective will of the government — which can decide to reduce your care or pay less for it when costs spiral.

The Democrats oppose health insurance because it's based on an opposite idea: that people are independent individuals who should be expected — and have the right — to pay their own way. It is a system in which people decide what level of coverage they want and how much they are willing to pay for it, and insurance companies balance an individual's premiums against his health risks.

Paying your own way is a demanding responsibility, but it is also a precious right that few people want to give up. He who pays the piper calls the tune, and when it comes to health care, our lives depend on being able to call the tune.

Will we be independent individuals with some control over our own fate — or will we be cogs in the collective, forced to be dependent on government for the most important needs of our lives?

Tracinski writes daily commentary at TIADaily.com. He is the editor of The Intellectual Activist and TIADaily.com.

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