Tuesday, May 5, 2009

Why Is The US Health Insurance System So Screwed Up Anyway?

Another fundamental problem (there are about 100 of them, it seems) with our current health care insurance system in America is that is violates basically every actuarial and financial principle known to the insurance industry.

Back in 1965, we took all the seniors out of the general insurance pool and placed them under Medicare. We took all of the lower-income wage-earners in the nation and placed them under the joint federal/state/local program, Medicaid. So, we selected the more vulnerable and higher-risk patients and took them out of the general insurance pool and violated the basic principle of balancing higher risk patients against the lower-risk patients who don't have a need for a lot of health care services in a given year.

Any kind of insurance only works when the premiums of the lower-risk patients exceeds the costs of all of the higher-risk patients in a given year. And, fortunately, since the number of people who remain healthy in any given year far exceeds the number who need a lot of health care, the actuaries can precisely identify risks and the managers can invest the money, cover costs and make a profit to stay in business for the next year.

Unless the insurance company acts in an unprofessional manner such as AIG, for example.

The upshot of all of this was that in 1965, (LBJ or President Lyndon Baines Johnson for all of you youngsters out there) and Congress was able to take all of the higher-risk patients in the nation and put them in two taxpayer-supported health care plans, Medicare and Medicaid, to be paid for by taxpayers for generations to come and not by the generally-accepted fundamentals of private health insurance in America.

And ever since 1965, Congress has generously expanded both programs for political purposes with scant, if any, regard for the taxpayers of the future.

Meaning most of you out there reading this.

For a nation that put the first man on the moon, defeated the Nazis in WWII and then communism in Russia and Eastern Europe in the 1990's, and invented virtually important technology known to mankind over the past 50 years, don't you think we could 'invent' a health insurance plan that covers everyone for the services they need?

Can't Congress and President Obama just step up and fix it?

No, they can't and they won't unless a majority of the American voting population learns about these issues and forces them to make the proper changes we need to reform healthcare insurance.

Unfortunately, the next steps towards national health insurance look to be another layer of added cost on top of an already broken and distorted system. Fixing the American health care system in a piecemeal fashion over the years has been compared to putting bandaids on a cancer patient and hoping that it will make the patient get well again.

Every hearing I ever went to in Washington confirmed the need for a radical overhaul of both the Medicare and Medicaid programs, especially as it pertained to the long-term viability of the federal budget and general economy health in this country. But politicians are too scared to even bring the topic up for fear of triggering some Doomsday Machine at the AARP headquarters in Washington that will doom them in their next election.

How can you change that? You, your family and colleagues can change it by: 1) understanding the issues and 2) contacting your elected representatives and senators in Washington on a daily basis.

So what is holding you back? You can use the links on the right side of this column to contact them in about 30 seconds. Just look for the "US House" or "US Senate" link, click on it and it will take you to your elected representatives websites. After you are done, bookmark this link and hit it every morning to express your concerns about health insurance in America after you have had your morning coffee. You'll feel better knowing that you have done something good for your children and grandchildren.

We'll be addressing other fundamental problems and options for health care in the coming weeks. But to start with, tell your legislators that you want a true health insurance system that is will not interfere with your right to choice your own doctors and which is not distorted by further government actions or interventions.

If you don't, you might be sorry later this year.


  1. Here it is I have Blue Cross/Shield of IL through my husbands teamsters (won't mention which one) He retired three - four years ago and they dropped my pharmacy and dental I have had to pass on MANY subscription (I needed) because I could not pay out of pocket and get a cheaper version, therefore my bad cholestrol went sky high. Then the teeth thing in 2011 I had to use care credit and ended up owing over $3,000 and still need some dental work that will inevidently cost my about the same. I broke my leg badly in 2012 and the only thing that was helping (REALLY HELPING) was my chriopractic and electonic machines My insurance cut me off. So I went to my primary care doctor who sent me to SPINE INSTITUTE who took more X-rays this was after others from my primary care including a MRI which the insurance did not pay even half. The bottom line it is going to cost them thousands when as my Spine Doctor told me today and I already knew to go back to therapy and chiropractic care WHICH IS WHAT I WAS DOING and knew that IS THIS STUPID OR WHAT?

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