Let's Watch Our Language!

As I watch and listen to the debate about health care go on, I notice Dr. Ron Paul is the only one who is making this statement:  "It is still surreal that in a free country we are talking only about HOW government should fix healthcare, rather than WHY government should fix healthcare." (Texas Straight Talk, Aug. 3, 2009).  Truly, that is the important question.

Yet, something else is bothering me about this whole debate;  another question keeps coming to my mind, and it is:  Aren't we confusing "health care" and "health insurance?"  Maybe it is only a quirk of language or semantics, but to me this changes the entire argument.  To me, the terms "health care" and "health insurance" are not interchangable.  They mean two different things.

When I think of the term "health care,"  I think of the system of doctors, hospitals, care facilities,  research institutions, etc.  When I read about reports and polls that many Americans think we have a great healthcare system, I am inclined to agree.  I have no complaints about the care I receive at my doctor's office, or the care I have received in local hospitals.  I am quite confident, in fact, that I have received top-notch care from my "health care" providers.  Here in the U.S., we have some of the best medical schools, cutting edge technology, effective treatments, etc.   There are some parts of the system that are broken, admittedly, but overall, I would probably not trade it for any other country's system.

Now "health insurance," that is another story.  The biggest complaint is that many Americans cannot afford health insurance.  Even if a plan is offered by an employer, there are usually large premiums, deductibles and co-pays that make it so expensive that some eligible employees cannot afford to enroll.  And if an employer doesn't offer insurance, trying to find an affordable plan as an individual or family is just about impossible.

Why is "health insurance" so expensive?  My guess is that we expect our "insurance" to pretty much cover everything.  Why is this a problem?  Well, think of your automobile insurance.  The basic point of automobile insurance is to pay for catastrophic damage due to an accident or disaster.  Some policy owners may never have even one claim against their automobile insurance.  That means that the premiums those people pay for their auto policies go to pay for the relatively few actual claims paid by the insurer. 

It is the same with your homeowner's insurance.  It will pay if your home or belongings are damaged or lost to fire, hurricane, tornado, theft, etc.  I pay my premiums year in and year out, and I might never get any monetary benefit, if I do not suffer a qualifying event that results in a claim.

Another aspect of insurance is the assessment of risk.  Those who are statistically more likely to have a problem that results in a claim usually pay a higher premium.  Those who are low-risk pay less.   This makes common sense.  A person who has been at fault in several car accidents is statistically more likely to have future accident claims, and thus pays a higher premium than someone who has never caused an accident.  It is the same reason that people with higher credit ratings pay less to borrow money than those with a low credit rating.  The risk that the lender will lose money is greater for those with bad credit, and thus they must pay more money to borrow.

In other words, if an insurance company is at greater risk of paying a claim for you, you will pay more for your policy.

Imagine, however, if we demanded that our automobile insurance cover all routine maintenance:  oil changes, tire rotations, new tires, tune-ups, new freon for the A/C, every scratch and ding, every rip or stain in the upholstery.  In that case, the risk would be the same for everybody.  People would be regularly submitting claims to their insurer, and expecting payment.   In order to cover all these claims, the insurer would need to bring in more money, and the way to do that would be to raise rates.  It simply makes sense that if we expect our "insurance" to pay for more things, the cost will go up.  And because you are now paying into the system with more premiums to cover all your claims, this would essentially be "pre-paid auto care," but not "auto insurance," which is based on risk and pays only for rare, disastrous events. 

The same would hold true with homeowner's insurance; if we expected it to cover routine maintenance like replacing windows and carpets, filling cracks in the walls, paying for a plumber to unclog the drain, having the furnace or fireplace inspected or cleaned periodically, etc., we could naturally expect to be paying much higher rates, to cover the cost of all the claims the insurer must now pay out.  What would we have then?  Not "insurance," but--you guessed it--"pre-paid house care."

A few decades ago, health "insurance" operated much like automobile and homeowner's insurance.  It covered people in the event of a catastrophic illness or injury, and risk was based on a number of factors.  Families would pay for their own routine things, like medications and office visits.  Because the number of catastrophic claims was small, the rates were pretty affordable, but people could rest easy that if there was a disaster--terrible illness or car accident, for example-- insurance would cover the costs. 

Then in the 1970's government intervened in the "health insurance" system, and began requiring insurers to begin covering routine items, like check-ups and immunizations, and the mandated coverage kept expanding.  Also, companies had very little freedom to offer tailored coverage:  an elderly couple would have little use for coverage of birth control, well-child visits or pre-natal care,  just as a young couple has less likelihood of needing coverage for cataract surgery, prostate surgery or Viagra.

The result is that today, government madates mean that the American people must pay for one-size-fits-all policies that cover every health care expense imaginable, regardless of risk, need or choice.  We are taking more out of the system in claims so we must pay more into the system, by way of premiums, co-pays and deductibles.  It is no longer based on statistical risk, or catastrophic medical needs. 

Does this sound like "insurance?"   Remember, if the plan covers everything, someone needs to pay for everything.  That someone is you.  "Health insurance" has evolved into "pre-paid health care."  So let's watch our language, and call things what they really are.

I have addressed the technical difference between "health care" and "health insurance."  However, that is a minor detail in the entire scheme of things.  If we go back to Ron Paul's statement, everyone is talking about HOW government should fix health care ("insurance"), not WHY government should fix it. 

The most important questions we now need to ask ourselves are:

1) Is the federal government really capable of "fixing" anything?

2) Does the federal government have the money to "fix" the  health care ("insurance") system?

3) If the federal government does not have the money, should they forcibly take it away from Americans, through taxes, penalties etc. to pay for it?

4) Does the federal government have the constitutional authority to establish a national healthcare ("insurance") system?

The answer to each question is NO.

Print Friendly Version of this pagePrint Get a PDF version of this webpagePDF