Thursday, March 23, 2017

GOP Grasp of How Health Insurance Works is Dumb and Also Very Dumb

Between cases today I watched a little of Sean Spicer bloviating at his daily press conference. He seemed vastly uninformed on the nature of Essential Health Benefits (EHB) and how health insurance works, in general.  As per Spicer (start watching around 13:45):

Mr Spicer seems to think that health insurance premiums are going up because people are being forced to buy health insurance packages that they don't need.  Old men buying maternity leave "packages" and young healthy Americans being forced to buy "Cadillac all-inclusive prescription plans" when they are perfectly healthy and fine.

This is very dumb.  It betrays ignorance.  It is embarrassing.  It befuddles.

First off, insurance premiums have not "skyrocketed" under Obamacare.  Americans who obtain their health insurance through employer based plans, which represents the majority of Americans, have indeed seen their premiums rise, but at a much lower rate than they had been rising prior to the passage of the ACA.  Let me say that again.  Health insurance premiums had been skyrocketing for years prior to 2008, contributing to wage stagnation, higher deductible plans, and an overall sense of panicked consensus that "something needed to be done".  This is a fact.  

Secondly, health insurance doesn't work like this.  You can't just go to the "insurance store" and peruse the shelves, looking for a product that "fits your needs".  Illness and disease are unpredictable events.  You can't reasonably say, oh I'm a healthy 29 year old male.  I don't need insurance.  I'll just a get a bare bones plan like I have on my car.  It's possible that you may remain healthy and avoid lymphoma or perforated appendicitis or a car accident that results in a 3 week ICU stay and 6 weeks of rehab in a brain injury facility.  Odds are, you'll get away with it.  But if everyone in reasonably good health opted to either not buy insurance at all or just buy a cheapo plan to cover catastrophes, you leave large swaths of Americans, the ones with chronic disease, serious illnesses, expensive health care needs, who are left to purchase the more encompassing plans.  What would a reasonable person conclude if this were to play out?  What would happen to the premiums on those plans covering sick, high cost Americans in a market run by private, for profit insurance companies?  Well the premiums would have to go up, stratopherically, in order to maintain that thin profit margin.  The death spirals would ensue.  The market would collapse.  It's just common sense.  Freshman year economics.

Health insurance is not a "product" like other tangible goods.  It isn't something you run down to Target and purchase.  You can never predict how much health care you will consume at any given time, either now or in the future.  (Actually that's not true.  You can be assured that you will need more health care the older you get.  Thank goodness for Medicare!)  But the fact remains, health care costs are abstruse and opaque.  You cannot make an "informed decision" on what you need.  Not now and certainly not ten years from now.

The only way it can all hang together, absent a move to a single payer system (like Medicare), is to mandate universal participation in health insurance markets, regardless of actual, in the moment health care needs, and to remove the profit making incentive from health insurance companies, i.e. they must re-invest any surplus premiums back into patient health care needs.  This is how it is done in Germany and France (where universal coverage is achieved, without resorting to single payer, at half the cost).

So no, Senator Roberts, you aren't being asked to "give up your mammogram benefits".  If a nation decides to ensure that all its citizens are to have medical coverage, then, to paraphrase Dostoevsky, we all must become responsible for one another.  My premium will fund your mastectomy and reconstruction and hopefully, some day, your premium will help fund my 2 week stay in the ICU after a rocky post op course following a prostatectomy.  A nation that stands together in illness, will heal together.  .

Unfortunately, the United States has yet to make that leap of moral imagination.  We remain the last advanced western democracy without universal health care coverage. If only the shame of this  might suddenly alight in the consciousness of folks like Sean Spicer and Paul Ryan and Pat Roberts....

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