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The real problem is that we have two Americas.  Healthy America which feels it is getting ripped off for health insurance.  And Sick America that doesn't want to die for want of treatment -- so the people in Sick America cost a lot of money.  The populations are dynamic - which is the wild card in this loosely shuffled deck.  The current system is broken, with too many people falling through the cracks when they go from healthy to sick, healthy people overusing healthcare because they feel they "pay for it anyhow," and states openly rationing subsidized healthcare at random (by lottery, in fact!).

I suggest that we adopt mandatory health coverage, but rather than the current proposals which mandate an expensive high level of minimum coverage, encourage HSAs for healthy people so more of the health care pie is left for the truly sick.  Health care for the sick Americans could be picked up by the taxpayers once a person's HSA balance has been depleted.  They could effectively carry a negative balance in their HSA, and this debt would be forgiven at death.  Tort reform and open rationing of care for non-life threatening ailments (President Obama's example of hip replacement for his grandmother during her final weeks springs to mind) could help to lower healthcare costs as well.

The insurance companies aren't the problem.  Unless we make a real effort to bend the cost curve, any reform will likely spiral out of control.  The cost would strangle our economy thereby limiting our ability to provide qulaity health care for all Americans.

posted 3 years, 2 months ago
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The Obama Administration's vilification of the insurance industry is a diversion.  It smacks of populism and isn't grounded facts.  In short, it is unhelpful.  That isn't to say health care reform reform isn't needed.  But the actions of the health insurance industry are a product of our bizarre system of regulations and subsidies - a symptom of the greater problem, if you will.

The insurance companies are businesses - unless there are laws against denying coverage, they shouldn't be expected to underwrite policies where they know they can lose thousands (or even hundreds of thousands) of dollars.  They do make profits on certain lines, but they compete for those profits.  And they compete with non-profits in many markets.  Group Health & Kaiser Permanente have different business models, yet still fail to outcompete the for-profits for a lot of business.  Why is this?  And if the health insurance business is so lucrative, why aren't there more companies entering the industry?  Heck, GEICO (a division of Berkshire Hathaway) has the capital and employs smart people, but I don't see them offering health insurance in Oregon. 

One of the main problems with the insurance industry is underwriting - this is a huge expense that contributes nothing to improved outcomes for patients.  But an insurance company without good underwriting wouldn't last to see the anniversary of its policies.

posted 3 years, 2 months ago
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