More Right Wing BS: Insurance, Risk, And Morality

For Your Reading

A conservative friend of mine recently sent me this article.

It made my blood boil.

Nonetheless, hours before the historic health reform vote, it’s important to address. Because it’s a classic example of the oversimplified and often erroneous arguments making this bill – a bill that will cover 32 million and reduce the deficit by more than a trillion dollars over two decades- such a tough sell.

My immediate instinct is go after this article for its moral repugnance. I can’t imagine, as a writer and, moreover, a human being, putting my name on a phrase like:

patients have no more “right” to demand service than a gambler does at a sportsbook counter.

The entire piece asserts a parallel between SICK people and gamblers – i.e. people hoping to “win” something they didn’t earn. And that, in itself, is outrageous. I think we can all agree that no one purchases health insurance for the thrill of the game. No one hopes to get chronically ill so they can ‘cash out big’ on a minimal investment. It’s a truly crass comparison.

But my emotional outrage is based on a feeling – apparently not a universal feeling – that as a developed nation we have a social responsibility to ensure every person has access to quality health care. And I’ve been advised appealing to the fundamental generosity and goodness of humanity doesn’t tend to fly with conservatives when we’re discussing health reform.

So we’ll skirt the ethical issue for a moment and discuss the merits of this amazingly simple-minded argument.

Let’s start with the misleading premise that the health insurance industry actually works like a casino. It doesn’t – as anyone with even a basic understanding of insurance knows. And so the analogy does not clarify the argument against forcing insurers to cover pre-existing conditions; it obscures it.

In actuality, insurance profits are not made by betting on the odds someone won’t get sick. If that were the case insurance would work on an individual basis and not in large groups – as it currently does in employer-based coverage. Rather, insurance companies create a large pool of individuals who share risk.

And yes, individuals with pre-existing conditions are a greater risk and therefore more expensive to cover. But alternatively, if they’re not covered, we as taxpayers end up footing their medical bills anyway when they seek ER treatment. Take the case of ‘Million Dollar Murray.’ And he’s not an anomaly – there are countless studies citing uninsured individuals who run up 6 figure ER tabs, paid for by you. In a casino, the other gamblers aren’t expected cover other players when they lose their shirt on a bad bet.

That’s not to say the higher expense of patients with pre-existing conditions isn’t a reality – it IS. And that’s why the current reform plan mandates coverage for all people, whether or not they are sick. Adding millions of healthy people to the pool allows insurance companies to cover even the most expensive claimants. This is already proven in large employer-based insurance pools -where risk is spread over enough people that everyone is covered regardless of medical history.

Therefore the conclusion of this piece that forcing insurance companies “to take on more than they are capable of or willing to,” (read: sick individuals) will put them out of business, is fundamentally flawed. And the analogy that the insurance industry works like Vegas is grossly inaccurate.

The writer lacks an understanding of how insurance works. And he certainly doesn’t grasp what’s at stake. From the onset, he admits a fascination with matters of “wealth and ruin.” But I’d ask, is his attitude so flippant about life and death?