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The
Republican Insurance Scam
August 1, 2001
by
Hochizen
If an insurance company promises to cover a loss or claim,
why do the Republicans want them to be able to break their
promise? This is the heart of the debate on the rights of
patients to sue their HMOs. Presently, virtually everyone
knows that insurance companies will, as a matter of policy,
deny claims or delay payments of claims which are valid. For
the insurance company, it makes all the sense in the world.
They get to keep the money, and earn interest on it, and write
policies against the reserve. Maybe the claimant will die
or just go away. The claims adjuster is pressured to not pay
claims easily.
So the right to sue an insurance company is of paramount
importance. Without the right to sue, you will literally be
at the mercy of the insurance company to cover whatever it
pleases. The idea of arbitration is of course to make it less
likely that an insurance company will have to pay money. The
abitrators will be hired by the insurance company....and even
if they are instead hired by the state, they will be courted
by the insurance companies much like the judges are nowadays.
The insurance companies are HAPPY to pay massive sums for
political campaigns... heck, if they give say $1 million to
a governor, and he pushes through tort "reform" (which actually
just means insurance companies don't have to cover some claims
they did before) then they make out like bandits. Hmmm...
insurance companies... bandits... yeah, I can see the connection.
But I digress. If patients can sue the insurance companies,
the insurance companies will lose some money because they
will have to pay claims they would otherwise refuse to pay.
This is what the entire debate is about. The Democrats say
that insurance companies should not be able to break their
promises to those they insure. The Republicans say they should
be able to break their promises. Let us examine the common
Republican response to this fact:
1. "Well, if insurance companies have to actually meet
their obligations, they will have to raise rates and millions
of children will be without health insurance"
This is the most common argument. It is also utterly ridiculous.
Insurance is valuable only to the extent that it can be relied
upon to cover a claim or a loss. If you have a health insurance
policy that refuses to pay for medical treatment, you are
worse off than if you had no health insurance. See, you rely
on the insurance in making many decisions (how much cash to
keep on hand, whether or not to buy another policy that would
cover the claim, and so on). If you lose health insurance
that does not cover claims, you are better off because the
insurance only provides an illusion of protection.
Also, if the premiums do in fact go up, then the "spreading
of the risk," which is the philosophical basis for insurance,
is merely meeting market demands. Those Republican rascals
do so love a free market... except when it might make some
of their donors lose money.
2. "The trial lawyers will make tons of money and the
Democrats are in their pocket."
This argument is real fun! See, a lawyer never awards a single
dime in damages. A lawyer cannot award anything! The jury
awards money, and juries are made up of American citizens.
The Republicans and the insurance companies fear the citizen
jury, though, because in court, a multimillionaire is supposed
to have the same rights as the poor person. The Republicans
thrive on being the ruling class; they do not like the prospect
of being subject to the same rules as everyone else. The insurance
companies accept trials as a part of doing business, but just
as they are not subject to antitrust provisions, they like
to limit their liability wherever possible so as to maximize
their profit (and the salaries of their executives).
The multimillion dollar verdicts you read about are news
because they are so rare! For every big verdict, there
are literally thousands of smaller claims which will be thrown
out or settled for a small sum. You do not hear about these
claims because they are not news. Yes, some lawyers will make
money off of cases brought to force insurance companies to
meet their obligations. Guess what? The insurance companies
will have their own lawyers too who will usually make much
more money than the plaintiffs lawyers.
The jury system is a basic part of our system of government.
Insurance companies and Republicans hate it, because they
do not want the average citizen to have any power over their
conduct. That is why it is necessary for the Republicans to
demonize lawyers (many of whom are Republican).
3. "Well, if we have a patient's bill of rights, why not
cap damages at $500,000 to keep the juries from going hog
wild?"
Simple. In every case where the verdict is excessive, the
insurance company has the right to seek a decrease in the
verdict. The insurance company also has the right of appeal
to a higher court in the event the vedict is not decreased.
The caps then become relevant only in those most egregious
cases where insurance companies have acted so horribly that
a multimillion dollar verdict will be allowed to stand. Why
should horrible conduct be protected?
Another point to ponder: say insurance company liability
will be capped at $500,000. Let's say you get into a severe
accident and after surgeries, physical therapy, speech therapy,
job retraining, and so on the bill will be in excess of $1
million. Do you think your insurance company will pay $1 million
if its liability is capped at $500,000? Especially when the
$500,000 would have to be paid say two years from now, after
a lengthy court battle? Trust me, they would not pay a dime.
Finally, there is the REAL reason Republicans oppose a patient's
bill of rights:
"A patient's bill of rights will cost our big campaign
donating insurance companies and their executives lots of
money, and they won't have as much to give to the Republicans'
next campaign if that happens."
Well at least it is the truth. You won't ever hear a Republican
admit it though!
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