Blame Government, Not Health Insurance Industry

LTE to Star-Ledger, 3/19/09

Insurance industry to blame

President Obama recently said of health care reform: "We didn't get it done .¤.¤. in recession, in booms, in wartime, peacetime .¤.¤. We didn't get it done."

The main reason "we didn't get it done" was the health insurance industry, which has fought meaningful health care reform for over 50 years. It invented the concepts of pre-existing conditions and cherry picking, gave us "Harry and Louise" and confuse the issues by using bizarre terms like "moral hazard" and "adverse selection".

And now they have the gall to say, "Trust us."

Karen Ignani, president of America's Health Insurance Plans, says, as you quote in your editorial of March 15 ("A good prognosis"), "You have our commitment to play, to contribute and to help pass health care reform this year". Do tell. Why do we even consider giving these people a seat at the table?

As someone said recently, the health insurance industry should not be at the table, they should be served on it.
-- Kevin Twine, Orange

My Commentary:

Posted by Zemack on 03/19/09 at 5:28PM
Kevin Twine's anger is completely misplaced. The health insurance crisis is a classic example of an industry and a market crippled by massive government intervention. And in further classic form, the blame is placed on the victim...the government-shackled industry. Mr. Twine's unjust, un-American, and dangerous solution is to deny to insurance industry officials the right to speak out and participate in the functions of government in direct violation of the First Amendment...for the sin of complying with their own government's irrational dictates.

This is not, however, an endorsement of the status quo. But before any discussion on reform can begin, the nature of the beast we erroneously call a "private health insurance system" needs to be understood for what it actually is, and how we got here. In the slide toward a healthcare dictatorship, which began decades ago, we are probably in about the seventh inning. All along the way, the problems in healthcare and insurance have grown in tandem with the growth of government controls.

Today's health insurance industry is a government controlled and protected cartel, not a market creation. The insurers are insulated from the insured (their actual customers) by the government-imposed third-party-payer system. The policies insurers write are dictated by government through thousands of federal and state mandates...community ratings, benefits, and mandatory guaranteed issue...and not based upon objective market considerations such as the needs, judgements, and budgets of their customers, or economic and risk assessments. Interstate competition among insurers is virtually non-existent, having been unconstitutionally barred by law.

The current "private" health insurance industry is really a quasi-private extension of government that could not exist without government force. It is not really insurance at all, which is supposed to be protection against unforeseen or catastrophic financial loss. Our current system is a forced prepayment of medical services and is really nothing more than wealth redistribution masquerading as "insurance". It is socialism coming through the back door of fascism...with business superficially private but controlled by government. It forces one to pay enormously for services one has little control over and to cover other people's health expenses, while removing personal responsibility for one's own healthcare.

Leaving aside other problem areas of American healthcare such as the market-destroying government-run "insurance" schemes (which should be phased out and abolished), a good place to begin reform is to eliminate the immoral, rights-violating interventions cited above. This would break up the cartel and establish a free market, which essentially means the recognition of the rights of all people to think and act on their own judgement, for their own benefit. Insurers, health products and services providers, and their customers/patients would be free to contract with each other voluntarily to mutual advantage. People would be free to spend their own healthcare dollars as they see fit and new market-oriented insurance companies would emerge. The competition for those dollars among insurers, doctors, pharmaceutical companies, and other providers would inevitably lead to lower costs and better quality. Further cost savings would come about as a result of the elimination of the huge government-imposed and necessitated administrative costs embedded in our current system.

The government's proper role in a free market is to protect the rights of consenting adults to their contractual rights...which are derived from their rights to life, liberty, and property...and to protect against and prosecute fraud and breech of contract.

This would be a start, but much would remain to be done. No talk of rational reform is valid or possible without a fundamental re-evaluation of every aspect of our current system, including the most sacred of our sacred cows. What currently passes for "reform" ideas is nothing but more of the same destructive rewarding of the cause of the crisis...the government...with more power.