Visit to a Country Doctor, Norman Rockwell

BUCK writes:

When my father was a boy, there wasn’t much in the way of health care, not a tenth of what is available today. Most surgeries were still done in your own home. Antiseptic methods had not yet been well established. There was no income tax, no Medicare, no Medicaid, no Social Security, no health insurance.

A 1919 study revealed that four times more money was lost in wages for missed work than was spent on whatever ailed you. Why would anyone buy health insurance? They didn’t; they bought “sickness” insurance instead, like today’s disability insurance, which arguably is under utilized. They also bought a good bit of burial insurance. These were risks that people could understand and calculate.

In 1940, about 10 million of our 132 million were enrolled in a health insurance plan. By 1948, when I was born, there were almost 60 million enrolled. By 1960, 130 million of our 180 million were enrolled.

In 1927, a committee investigated the American families’ medical expenses. In 1929, the average family paid $108 for care, with only $15 of that for hospital visits. Urban families, earning between $2,000 and $3,000 a year, averaged $67 if no hospitalizations, but $261 with. Families wanted more, so costs began to rise.

It all began in 1929. A group of Dallas teachers paid Baylor University Hospital $6.00 for 21 days of hospitalization. The “plan,” or pre-paid hospital care, was born. Single hospital plans started competing. Community hospitals organized to meet the competition. This organization became Blue Cross.

The new American Hospital Association established guidelines to reduce competition and in cahoots with government, legislation got them tax-exempt, non-profit status, and freedom from the usual insurance regulations. They didn’t have to act like real insurance companies; no reserve requirement, no taxes, sweet-heart hospital deals.

(As we go along, everything that happens is heading us straight into compulsory national coverage; universal, socialized, single payer health care and the end of health “insurance.”)

But, why the special deal?

Blue Cross plans benefited the low-income and were deemed to be in the “best interest of society.” We need a shield!

So now the doctors, seeing the writing on the wall, joined forces behind a shield. They had to shield themselves from the inevitable encroachment into physician-patient relationships by the voracious hospital plans and from the feverish talk of compulsory national health insurance caused by the new Social Security scheme. The docs wanted to protect their incomes and their autonomy.

Funny. I always thought the “shield” was for our protection.

Then, the docs went to work on Congress. They got the same sweet deal; no insurance regs and no taxes. Eventually they all gathered behind the Blue Shield, in 1946.

Government got behind the plans, encouraging companies to provide it as employee compensation. Technology kept advancing the science of medicine and it snowballed. Regular commercial companies poured into the market. Enrollment went from 20 million to 132 million just in the ’40s.

The scheme inevitably fed the push for today’s compulsory national coverage. The employer group plans made the impossible task of assessing and calculating risk no longer a problem. They made huge profits because of the naturally diverse cross-section of workers. The healthy young carried the aging. It’s just what the doctor ordered, so to speak. What better model for Obamacare?

My mother, for whom I am throwing a 90th birthday party in a few weeks, remembers when she purchased her first health policy. It was through a group plan at her second job. It only covered her. A year later she married my step-father and was allowed to add him. None of us three kids were ever covered by insurance. All of our births and ailments were paid for in cash. My asthma-runs to the hospital were paid right there and then, in cash. “We never made any payments,” my mother said.

My parents lived a hand-to-mouth existence: “We paid as we went and were lucky to have a dollar left for the weekend. We lived week-to-week.” I asked her if she knew or ever heard of anyone who ever went without care because they could not pay. “I don’t remember anyone ever having a problem paying.”

My first health plan was through the USMC. Then there was a gap of ten years without. Then a group plan for about eight years. Then I paid for my own.

Today, many employers provide both sick pay and health plans that pay the associated bills.

Commercial insurance companies knew that there is no way to accurately assess the medical risks of individuals. They loved the large pools of employees, but they had to up-charge individuals. Common sense. People lie. No, doc, I don’t smoke, chew, or drink to excess. I do nothing risky and I always wash my hands before eating my tofu salad. I promise that I won’t engage in any unhealthy behavior if you’ll reduce my premium. I swear.

Life insurance is easy. Set aside war, plagues and forty-year floods, and you can develop dead-accurate mortality tables.

All insurance is based on risk, nothing but risk. If there is zero risk, there is a zero premium. If there is a huge risk, there is a huge premium, if there is a 100 percent risk, the premium is a single payment equal to 100 percent of the value of the subject at risk, plus overhead. Look at any standard mortality table. It is the basis for the simple costs of all life insurance, in all of its hidden configurations. If, as in the 2001 table, for every 1000 nine-year-olds, .23 died at the end of the year; then the pure cost of a one-year annual renewable term life policy would be $.23 per $1000 of coverage for a nine-year-old. It will go up each year that the nine-year-old survives and ages toward death. By my age of 64, of every 1000 of us, 16.4 will die by year’s end. The pure cost of my life insurance would be $16.40 per $1000 of death benefit; plus commissions, overhead, profits, bundled investments, etc.

That’s it. Health insurance, in theory, is no different. No insurance is any different. Lloyds of London is no different.

It’s a lie to keep calling the “coverage” of a pre-existing condition under Obamacare “insurance.” That’s not insurance; it’s welfare or charity or Obama money or theft and redistribution. It’s anything but insurance. Why this persistent lie?

Marx himself said that there can’t be Communism (goal of socialism) without first seizing the wealth created by capitalism. The Communist pump has to be primed. The compulsory, universal health care pump is primed.

So, the seemingly invisible 800-pound gorilla in the room – the mostly ignored and uncontested issue of coverage for pre-existing conditions that so quietly blows up every possible pricing model and any actual private “insurance” scheme – destroys, by default, everything but single-payor, universal government health care. How can we possibly end up anywhere else?

— Comments —

Eric writes:

When Ron Paul (remember him?) was running for President, he pointed out that people use health insurance for routine medical care. Insurance, by definition, is a hedge against catastrophic events, like your house burning down. It is intended to protect you from rare, unpredictable, and unavoidable calamity. Winter colds, sprained ankles, pregnancy, and arguably even death are not rare and unpredictable (death, of course, is unavoidable). I don’t remember Mr. Paul’s exact words, but he said something to the effect that using health insurance to deal with the flu is like buying starvation insurance and putting your lunch on the food plan. It introduces another middleman, which can only increase overhead and reduce responsiveness.

Why do we get any health insurance at all, except catastrophic coverage? It doesn’t make sense. I buy insurance because even minor health ailments can generate catastrophic expenses, and because buying health care out-of-pocket exposes me to predatory pricing by the providers, and insurance provides some shelter from this. I would like to stay away from the system and go “cat-only,” but the numbers force us onto a more comprehensive plan, which is very expensive.

Health ‘insurance’ is not really insurance the way life insurance or fire insurance or car insurance is. It is more like a tax.

Laura writes:

I think you mean it’s more like a service plan.

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