Here’s Your Better Health Insurance Plan, Mr. President

At his State of the Union address, President Obama asked for other ideas on health care reform:

But if anyone from either party has a better approach [on health care reform]…let me know. (Applause.) Let me know. Let me know. (Applause.) I'm eager to see it.

Since yesterday’s health summit produced no results or new ideas, here’s your better health insurance plan, Mr. President.

This is What’s Really Wrong With the Current System

Insurance is a bet. Every month when people pay $1,000.00 for health insurance, they’re betting they WILL get sick. The insurance company is betting they WON’T.

While there are unfortunate people who get sick, serious illness for most people is rare for most of their lives. Every month working families make a sucker’s bet: Betting $1,000 dollars that they will get sick when the odds say they won’t. Month after month they lose the bet, and lose another $1,000 that could be well spent elsewhere.

Under the CURRENT system, for many families, the only winning move is not to have insurance (so many choose not to). In ten years they will save $120,000 -- more than enough to pay doctors for the usual sicknesses and calamities such as broken bones, etc.

But if you are an American who has wealth to protect either in savings or home equity, you should buy medical insurance not for the bet, but to protect your assets in the rare instance you do get terribly ill. However, if you are the average American living “paycheck to paycheck” with little savings and little home equity, the better bet for you is not to buy insurance at these prices, since the $12,000 price tag is a whopping 23.9% of American median income ($50,233.00). Why spend 1 out of every 4 dollars on something you don’t use?

What’s Wrong With the System Democrats In Congress Are Proposing?

COMPETITION is what drives PRICES DOWN and QUALITY UP. The reason to have a Department of Justice Anti-trust Unit is to make sure there is no monopoly, no single source for goods or services, because that hurts price and quality.

Now imagine a country were EVERYONE is insured, even with PRIVATE coverage. Richer people will buy costly policies and poorer people cheaper policies. All of the money gets “pooled” and only people who get sick or are rich or poor, will use it. Those who stay healthy won’t use it.

So full insurance will work like this: “From each according to his ability [wealth], to each according to his need [illness].” Sound familiar? It’s exactly how Karl Marx described the principle of communism in 1875.

A system where everyone is fully insured is therefore “privatized communism.” Nothing changes if you include a “public option” or “co-ops” or go fully socialized with a government single-payer plan. The financial theory of communism still governs.

Full insurance is bad policy because the more insurance you have, the less competition you have.
In America, there are approximately 630,000 physicians who could be competing for you medical dollars. They used to, and they hustled from house call to house call to be your doctor.

Today, you sit for 2 hours in a waiting room to be seen, for no other reason than the doctor takes your insurance. Why did that change happen?

Competition was whittled down from 630,000 doctors to 1,300 health insurance companies. Also, you can’t buy insurance across state lines. Therefore, the competition for your insurance money is really a choice of about 25 companies authorized to sell insurance in your state. The president once argued that in 34 states 5 or fewer insurance companies control the market. Adding one government insurer won’t help. Don’t be fooled into thinking insurance companies represent the best of capitalism. They don’t. Insurance pools limit your choices instead of expanding them.

So what would make for a better system?

The Fix: Bring Back “Hospitalization” and “Catastrophic” Insurance

Ever wonder why Ozzie & Harriet, Howard & Marion Cunningham or even Fred Sanford never complained about the cost of health insurance? In the 1940’s, ‘50’s and ‘60’s people could buy a “hospitalization” policy to cover them only when they went into the hospital, and a “catastrophic” policy to cover them when they had a disease that needed constant care. Since those events are rare, the policies were CHEAP.

People paid their family doctor directly. Only the costly items were insured. In those days that was real choice determining how to insure yourself.

In the 1970’s, the concept of the HMO was unveiled. Suddenly there would be coverage for EVERY LITTLE THING, from the visit to the doctor right down to the 10 cent aspirin. Ask anyone with health insurance how much their doctor charges for an office visit. They don’t know and they don’t care, even though they are paying $1,000 a month for insurance to cover that 10 cent aspirin.

Doctors and insurance companies love the current insurance plan! They’ll no longer sell you just hospitalization or catastrophic insurance, so you HAVE TO buy the whole package, even if you rarely or never use it, or you can buy nothing at all. It’s called an “illegal tying agreement” when a company makes people buy a second product in order to buy the first. That’s why the Department of Justice Anti-trust Unit sued Bill Gates for selling Windows bundled with Internet Explorer.

But the DOJ, who slept while so many companies became “too big to fail” and filed no charges while the companies bragged about it to Congress to get tax dollars, is still sleeping. Insurance killed competition among doctors. Insurance killed competition further by forcing you to buy comprehensive coverage instead of just coverage for things you want. – Making you unable to buy insurance across state lines killed competition further. The DOJ snoozes.

The best plan for health care reform is old-fashioned capitalistic choice – let people choose to pay their doctor for office visits, and buy hospitalization and catastrophic policies, across state lines, to cover just the expensive items.

Expect doctors and insurance companies to fight the idea – they don’t want to compete or lose the money you’re wasting on them each month by being excessively insured.

Read more Tommy De Seno at www.JustifiedRight.com.