Health Insurance Is Not Healthcare

Insurance companies make a simple wager with you each time you sign a policy. They are betting that, over the life of the policy, they will pay out less to you and your beneficiaries than you will pay them. Insurance companies of all kinds make tidy profits on this simple wager. If they don’t, sometimes the government will bail them out.

Either way, insurance is still just a bet. And in America, we do not have a healthcare system. We have a health insurance industry. That industry has been one of the most profitable sectors of the economy for well over a decade. But costs skyrocketed and care suffered. We heard horror stories about rationed care, denied procedures and corporate bureaucracies run amok.

Ironically, these were the horror stories we were supposed to hear if the government took the reigns of the “best healthcare system in the world.” So, instead of a single-payer healthcare system, we got The Affordable Care Act—aka Obamacare. Instead of retiring the health insurance industry and its actuarial tables and profit margins and wagers, Obama “saved” the health insurance industry and enshrined it in perpetuity as the “Health Insurance-Industrial Complex.”

As the Affordable Care Act’s provisions begin to take effect, the folks in the Complex are wasting no time doing what they can to keep their profits tidy. Leading insurers in California are seeking increases in premiums ranging from 20% to 26%. Regulators in Florida and Ohio have already approved increasing premiums as much as 20%, and, since the ACA doesn’t set federal standards, insurance companies are moving in a number of states to force these spikes in premiums. Remember, if you can “afford” health insurance, you have to buy it. If you refuse, you’ll pay a penalty to the government at tax time. Some are exempt from this mandate. But, in effect, the ACA has guaranteed the health insurance industry a captive market.

Meanwhile, they continue to change the terms of all those bets they’ve placed against millions of Americans and the cost of the “best healthcare in the world” continues to rise. When compared to other nations with some form of single-payer system, the difference is so stark that it’s almost obscene. It’s not just the $800 difference between an MRI in France versus the U.S., it’s almost every part of a system that has at its heart the relentless desire to turn a profit. Even worse, a much-ballyhooed part of the promised “21st Century transformation” into greater “affordability” has turned out be little more than a profiteering scheme.

Remember the “streamlining” and “cost savings” guaranteed from the conversion to electronic medical records? Well, it hasn’t quite panned out. In fact, the only real beneficiaries of the conversion are companies like General Electric that sell electronic medical records systems. Not coincidentally, GE and other interested parties funded the key RAND study in 2005 that both predicted $81 billion in savings for America’s health care system and also became the driving rationale for the profitable conversion. This type of closed system is par for the course in Washington, D.C. Every door revolves in the nation’s only recession-proof city.

Is it any surprise that the woman who wrote the Affordable Care Act is now leaving the White House for a job with health care giant Johnson & Johnson? Liz Fowler worked for Senator Max Baucus (D-MT) during the drafting of the ACA and had the primary responsibility for authoring the legislation. After its passage, she migrated to the White House to help with implementation. Seems reasonable enough. However, it is important to note where she was before joining the staff of Senator Baucus. Yup, you guessed it…she was a bigwig at WellPoint, the nation’s second leading health insurance company with nearly 54 million policyholders.

All of this makes you wonder who knew whom in the breast milk-pump industry, which is seeing a huge spike in its profits thanks to a new coverage requirement written into the ACA. It may be too early to render judgment on a law that hasn’t yet been fully implemented, but it is not too early to determine that the profit motive might simply be incompatible with the equitable delivery of healthcare. As matter of course, businesses try to lower costs and increase revenue. That may be okay when they sell scissors or candlesticks, but it seems ill-suited to deliver labor-intensive care for those who are most vulnerable. And as far as the health of the insurance industry, it’s a safe bet that they’ll keep coming out on top as the Affordable Care Act is fully implemented.

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'Health Insurance Is Not Healthcare' have 7 comments

  1. January 13, 2013 @ 2:40 pm Bruce

    That’s PP(C)ACA, (C) = Cave-in; when INSTEAD we were PROMISED THIS:

  2. January 13, 2013 @ 7:32 pm John Raines

    Unfortunately the writer missed the mark. Japan has mandatory private health insurance for everyone. It is affordable. They also have price controls on every health care product and service. In America, we already have the price controls on every health care product and service for those over 65, and it’s called Medicare. The problem is that the Government can’t be trusted to run it. For several decades, the government taxes U.S. citizens for Social Security and Medicare, and then uses much of the money for something else, which would be an illegal Ponzi scheme for anyone except the government.
    It is also the U.S. government that approves, supports, and subsidizes junk food, including the unlabeled, poorly tested GMO’s that could be seriously undermining any health improvement efforts.
    By placing the blame on the “profit motive” of private insurance companies, the author is failing to comprehend that becoming more like Russia, China, and other socialist nations is not the way to become more efficient. Compare the U.S. Post Office to Federal Express and U.P.S. What’s really sad is that the author correctly grasped that Health Insurance is not Health Care. Very True. The purpose of healthcare is to promote and foster good health. The purpose of health insurance is to protect individuals from the financial devastation of a serious illness or accident. The costs of health care (promoting and fostering good health) should be left to the individuals and families to decide as they see fit. The costs of health insurance should be left to the competitive forces of the private market to keep prices as low as possible.

  3. January 13, 2013 @ 7:54 pm Health Insurance

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