For-profit health insurance is an obscenity

Do you think modern medicine is on the brink of eliminating disease forever? Not quite yet, it seems, which is why health insurance will remain a necessity for at least the next few decades. But just because we need insurance doesn’t mean we should allow corporations to steal from the healthy to cheat the unhealthy.

Any bets on how much longer we’ll have to worry about getting sick? Making a wager like that is exactly what buying health insurance is all about. If you knew for sure that you would never be injured or come down with a disease, you could safely and confidently skip buying insurance. Most of us, though, aren’t willing to take that chance. So we enter into a risk-sharing venture with other people, paying premiums and hoping we’ll never really need the benefits.

Now, should that kind of arrangement be subject to profit taking?

By its very nature, any for-profit business will try to maximize its bottom line. Nothing wrong with that. The company’s first responsibility is to its owners and/or shareholders. That’s how capitalism works, and in most cases, for most kinds of business, it works just fine.

If a company doesn’t focus effectively on making a profit, it will go out of business. (Or need a bailout - snark.) So the profit motive is generally a positive aspect of a capitalist society. It makes companies compete, work harder, try to please their customers, and excel at what they do. So far, so good.

But there are some kinds of services for which the for-profit model is clearly the wrong one. Take, for instance, policing. How well would it work if you had to rely on a group of competing local businesses to fight crime and provide public security? Would you like it if you knew that your neighbor would be better protected because s/he could afford to pay for more expensive policing than you? Obviously, we decided long ago that such matters are not the place for competition and profit making. Enlightened societies recognize that public safety is a common good—a human right—and that it doesn’t belong in the hands of protection rackets.

In my view, health insurance should be treated the same way: as a common good, a human right. The problem with for-profit medical insurance is that business imperatives are too often in direct conflict with those basic goods. To make more money, the company may need to reduce costs. That might require dropping customers who are costing too much—taking too much out of the system—in favor of those who are healthier and don’t need the benefits. It could mean deliberately denying service for people who are in need. Sometimes it results in misleading if not outright dishonest practices: misinformation, obfuscation, delay, complexity; anything to slow down payouts and cut down on claims.

Note that I’m not calling for insurance companies to act more humanely. As long as they are in the business of making a profit, worrying about the general welfare of society is not their job, and it shouldn’t be. But that is precisely why health insurance is the wrong kind of business to be left in the hands of for-profit companies.

The only logical—and ethical—solution is single-payer insurance in which we collectively share both risks and benefits. Of course, most countries already know this, and many practice it quite effectively. Consider this story:

In November 2007, Maggie Yount was rushed to the emergency room after a drunk driver crashed into her car on a Nova Scotia highway.

Yount awoke from a coma four days later. She had suffered a brain injury in the head-on collision. Thirteen bones were broken, from her leg to her cheek. The other driver was killed.

Yount, a Canadian citizen, spent three months in a Halifax hospital, receiving treatment and rehab that must have cost a small fortune.

“I have no idea how much it cost,” she said. “It’s not something I’ve ever needed to know.”

So who paid the bill?

“The government of Canada.”

The United States is the only industrialized democracy that doesn’t have a government-run insurance system. Under such systems, universal coverage is provided through tax revenue. There are no premiums, co-pays or deductibles.

It’s not a perfect system—people often end up waiting for nonessential treatment. But it won’t leave you destitute if things go bad. Basically, you’re covered. For everything.

It’s only here in the USA, the world’s richest country by far, that profit-making is still considered a legitimate enterprise for health insurance providers. That’s wrong, and it must change. (Read the rest of the linked article to learn about Maggie’s disastrous experiences with privatized insurance, American style.)

To reward their owners, to please their shareholders, to make a higher profit, it is in the bottom line interest of for-profit insurance companies to charge you the highest premiums they can get away with. And it is equally in their interest to deny, delay, suspend, or eliminate service to those in need of benefits, especially those whose needs are the greatest, for they will cost the most.

Just because we all need medical insurance doesn’t mean we should let corporations steal from the healthy to cheat the unhealthy. Allowing this to continue is obscene.