Wednesday, May 6, 2009

Do You Own ‘Gutter-Cleaning’ Insurance As Part Of Your Home Insurance?

When you buy a house, you are forced to buy home insurance to cover you and/or a mortgage holder in the event of a ‘catastrophic’ event such as a fire, wind damage or a tree falling on it. You might even buy flood insurance but odds are high you will not go out and buy gutter cleaning insurance.

On the other hand, though, if someone else was paying for your home insurance and offered to include gutter-cleaning services on a monthly basis, would you accept it?

If your employer, or the federal government, is paying for all or part of your health insurance, why are so many pre-paid maintenance services included? You don’t buy ‘pre-paid’ gutter-cleaning services, or painting services for that matter, through your home insurance plan. When the gutters clog up or your house needs painting, you pay someone to do it, or you do it yourself. Are there similar preventive health steps that individuals should be responsible for taking or is it logical to include all such things as part of our current health care “insurance” system?

The point is that in the case of home insurance, you buy insurance for what it is truly intended: coverage for unexpected, but possibly large costs caused by unusual, uncontrollable occurrences.

Not so in most health care plans in force in America today, including Medicare and Medicaid. Most health plans are really a pre-payment system designed to pay ahead of time for all of the potential health care consumed during the year. It is more correctly defined as a ‘pre-paid health care plan’ by you, your company or the general taxpayer. There are not many health insurance plans in existence today that are actual “insurance” plans, in the true actuarial and financial sense of the word.

And that means that your health insurance, as well as everyone else’s, is more expensive than it should be.

Do you know how and when the concept of “employer-paid’ health care plans came into existence in American business in the first place? During World War II, wage and price controls were instituted to help the war effort. To get around those regulations, employers increased compensation by adding health insurance as an inducement to recruit workers. Employer-provided health care plans later became a standard part of the recruiting and retention process for workers after WW II and became engrained in the general fabric of American life and business.

What would happen to the costs of all health care premiums, including the government healthcare plans, if the plans only covered the truly expensive unexpected costs of health care in case of accident, cancer treatment or other chronic or terminal illness? Premiums would plummet, you and your company should save a lot of money, health insurance companies would have to scramble to cover their overhead and keep current customers, and the whole dynamic of the health care industry in America might be turned on a dime, finally.

Why is this pertinent to the federal budget deficit crisis? Because anything, and everything, that drives up the cost of health care in America is also driving up the costs of American federal health care: Medicare and Medicaid.

You don’t have “gutter-cleaning’ insurance in your home insurance policy and we, as a nation, can’t afford to have a pre-paid, dollar-one health ‘payment’ system for everyone in the country at the private or public sector. What we really need and want is a pure “insurance” system, preferably administered by the private sector, that will pay for the extraordinary costs that we can’t cover normally on our own such as for accidents, cancer treatment, heart attack, stroke victims or other life-threatening situations.

Isn’t that something that the Obama White House, the Democrat-controlled Congress, the loyal opposition Republicans and the vast number of Independents can all agree upon?

Well, isn’t it?

And since America is still a generous, compassionate place in which to live, we can help the less fortunate or lowest-income people cover their basic, routine health needs if necessary. As long as they commit to living a more healthy lifestyle, like the rest of us are going to do from now on, presumably.

Fortunately for most of us, the vast majority of Americans stay healthy (meaning staying out of the hospital each year) when compared to the relatively few, by comparison, who fall critically ill. And staying healthy, eating right, exercising and smoking and drinking far less is what is going to really drive down health care costs in the long-run anyway.

In short, what we really should be debating about is how to establish a true health “insurance” plan similar to the house insurance you buy to cover catastrophic loss to your house.

Not one that pre-pays for every health care expense during the year, regardless of the lifestyle you lead. That is a recipe for further fiscal disaster and meltdown in anyone’s book.

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