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babylonsister Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 07:19 AM
Original message
The Absurdity of Preserving Profit in the Health Insurance Industry
http://pleasecutthecrap.typepad.com/main/2009/09/the-absurdity-of-preserving-profit-in-the-health-insurance-industry.html

The Absurdity of Preserving Profit in the Health Insurance Industry


You know, one component of the health insurance reform debate that has always puzzled me is this notion that somehow health insurance companies are entitled to make a profit for using your money to pay for your health care. It's truly one of the strangest concepts I've ever heard of, and I think it's time we put that notion to rest, once and for all.

Did you know we're the only industrialized nation on the planet whose health care financing system is controlled by a for-profit health insurance industry? Yeah, that's right; and we're also the only industrialized nation in which health care makes up more than 10% of its GDP (Health care accounts for 17% of our GDP), even though we're also the only country that doesn't cover virtually anyone living within its borders legally. (Fully one-fifth of our population has no coverage, or access to health care.) Coincidence? Not even a little. If you think about what for-profit insurance companies do to maximize their profits, it actually makes perfect sense that our system is screwed. Health insurance, even when it works, doesn't actually provide a marketable service. Essentially, they take money from a bunch of people, who give it to them in good faith to pay for any health problems that might result, but they alone seem to decide what is necessary and what is not. And whatever they don't spend, they get to keep.

How is that fair? More importantly, I'd like for some wingnut to explain to me how that meets any sort of rational "free market" capitalistic model.

The health insurance model we live with now is patently absurd. They actually increase their profits by NOT providing services. In what way does that not stand capitalism on its head?

Think about it this way...

Imagine your brother-in-law came to you and said, "Send me $18,000 per year, and I'll keep it for you. Whenever you need money to spend, just come to me, and I'll pay the bill for you, as long as I approve of the item you plan to buy. Then, at the end of the year, whatever you haven't spent, I get to keep."

Would you take that deal, or would you laugh at him and suggest to your wife that he be committed?

What if you deposited money in your bank, but in return for using the debit card (your money), the bank got to approve your purchases, then zeroed out your balance every December 31, kept the money and made you start over? Would that be a fair capitalist model? What if they approved you for a mortgage this year, then ten years later canceled it because the home's value had dropped slightly or the neighborhood had changed? Wouldn't you consider that unfair and take them to court? Oh, wait; you can't take them to court, because the mortgage contains a mediation clause.

The above examples are almost exactly how health insurance works now. Our current health care financing system is absurd, and it will cripple our economy if we continue with it. By the way, this shouldn't come as a surprise to anyone, but the current for-profit insurance system is actually relatively new, and pretty much a neocon creation.

snip//

For-profit insurance works against any sort of logical model, because it incentivizes the actual non-payment of bills. Opponents of health insurance reform like to bring up "free market" a lot, but it's as if the mere fact that insurance companies make a profit is proof of a "free market" model. That's absurd. That's not saying insurance companies can't make a profit at all. If they'd like to take 3-5% of premiums off the top in a competitive environment, I suppose that might be acceptable. But the current system is simply not a "free market" system any way you look at it.

The next time someone comes to you and tells you that we need to preserve the for-profit aspect of the health insurance system, ask them if they'd take that offer from their brother-in-law or the bank. Then, remind them that health insurance in this country didnt spin completely out of control until the for-profit model took over. Ask them to explain such coincidence.
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Hepburn Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 07:27 AM
Response to Original message
1. That is totally what I have never understood....
...why in the hell is healthcare for profit? If anything should NOT be profit motivated, this most certainly is at the top of that list.

JMHO
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crim son Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 07:30 AM
Response to Original message
2. Absurd is the word.
It's as if human beings exist for the corporation and not the other way around, IOW, it's a moral crime.
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DrDan Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 07:38 AM
Response to Original message
3. preserving the profits preserves the campaign contributions
keeps those bucks flowing . . . .

gotta line those pockets
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Ruby the Liberal Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 08:37 AM
Response to Original message
4. This is well done. The examples of the BIL and debit card
are clear, concise, and low enough on the comprehension scale that even the dolts who walk among us could understand them.
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Blue State Blues Donating Member (575 posts) Send PM | Profile | Ignore Tue Sep-15-09 09:25 AM
Response to Original message
5. Brilliant Argument, K&R ... but
I think this metaphor does a brilliant, concise, easy-to-understand job of showing the absurdity of the current system.

I believe it will be an effective way to convince many if not most people who cling to the system we have simply because it is familiar and change seems strange and scary. And more effective than invoking, "the rest of the world does this better by doing it differently," for many people whose brand of patriotism reject any comparison of the US to any other nation in the world automatically.

But. From experience, I would caution be careful who you choose to use this argument with.

While it will be an effective metaphor for many people, if applied to the kind of person whose world-view doesn't extend past the tip of their own nose, what you will get in return is, "then I should be able to put MY money away in a special savings account just for ME. And you'd better not tax my account, dammit. And then when I get sick, I can pay for my own damn doctor. Because there's no way I want one cent of my hard-earned money going to pay for someone else who doesn't deserve it."
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Laelth Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 09:36 AM
Response to Original message
6. k&r for the truth. n/t
:dem:

-Laelth
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vanbean Donating Member (957 posts) Send PM | Profile | Ignore Tue Sep-15-09 09:51 AM
Response to Original message
7. I've been saying that for 40 years.
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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 10:53 AM
Response to Original message
8. Rec, another nice one, Sister!
But, the for profit health care industry, from the hospitals to the insurance industry, is not going to give up their "free money". And the government and media are going to help them hold on to it at the expense of the American consumer.

The American consumer has been fucked since the PTB yanked Phil Donahue off the airwaves. His frequent guest was Ralph Nader, on his early programs, anyway. See, there is no free speech. There is corporate free speech that the SCOTUS is going to strengthen. Poor corporations, they just don't have enough clout. :cry:
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Kablooie Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-15-09 11:39 PM
Response to Original message
9. How many NON-industrialized nation's health care is controlled by insurance industry?
I would wager the answer is none.

So instead of saying we are the only industrialized nation that has this, you might say we are the only nation, period!, that does this.
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inna Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 01:03 AM
Response to Original message
10. exactly! kr+28
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yurbud Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 11:21 AM
Response to Original message
11. kick
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