Wednesday, November 06, 2019

To have, or not to have insurance

In one of my threads on Facebook, a friend suggested that the concept of insurance is a bad idea. He thinks insurance creates the illusion of an endless pool of money allowing medical professionals to overcharge and patients (in the case of health insurance) to not accept personal responsibility for their health.

I find those ideas interesting, but I also feel insurance is needed due to the wide range of health circumstances that people face. Here's what I wrote in response.

I think it was invented, in part, because there is such a vast discrepancy among people regarding health. Some folks; like me (knock on wood) have been healthy for years while others have real expensive medical conditions. Some folks are born with conditions where life, or at least quality of life, is real expensive to maintain. In the past, lots of these people just died and / or were an even greater burden on their families and loved ones. Insurance helps to take care of those less fortunate.

It also enables less healthy lifestyles and greed at the top. Creates the perception of a limitless money pot. It can go both ways.

If everyone were fairly healthy and of reasonable income, one could just use their savings accounts for medical needs. There have been attempts to create medical savings accounts with this in mind. I have one that my employer pays into. It works unless, of course, I were to have catastrophic illness, or long term illness. I also have high deductible insurance from my employer for that eventuality.

That friend has some libertarian thinking so he is suspicious of attempts to use government to provide things like health insurance or even public transit. I tend to favor things like the Medicaid expansion under Obamacare. Private health insurance seems to be serving less and less people, these days.

Whether public, or private, I still feel there is some need for the concept of insurance. Here's more of what I wrote in that thread.

One thing Libertarians seem to overlook and not provide an answer to is the problem of vast discrepancy in medical needs between different individuals in society. As I mentioned earlier; some people can get through life with very little need for medical care while others face chronic illnesses and, in some cases, birth defects, that require loads of care. Without something like insurance, the people with more extreme medical expense are more apt to be left behind. I think that is one of the original reasons for creating the insurance "large pool" concept. Its to soften the blow on those who are medically less fortunate.

Having said that (above), the system of insurance is ripe for abuse and there does need to be smart ways to deal with those problems. I do think there needs to be more competition, so to speak, and transparency in the medical profession. Also more incentive for healthy living. As with communications technology (you mentioned in your comments), this can help to bring down the costs.

There is a lot of technology in medicine. At the same time, not all things work like the amazing advances we have experienced in communications technology over the last few decades. Medicine may not be quite as easy, in that way.

Competition has helped in the advancement of technology, but there has also been lots of government participation as well in the basic research and the development of things like the Internet backbone.

Seems like a mix of strategies is the best way forward. We need something better than just all "libertarian free enterprise," or all "government." These are extremes in thinking that may look good in theory. A mix seems to bring us forward, but nothing, even a mix, is without it's potential for abuse. Insurance, whether, private or government, can easily be corrupted.

I know there are some solutions that libertarians have for taking care of the medically less fortunate. Solutions; such as charity care and volunteer service, but it seems that without the big pool to soften the burden, these solutions would still leave many folks out in the cold. The needs of the less fortunate are just too overwhelming.

In the past, lots more people, with serious illnesses, just hobbled along without the technology, we have available today, to address these handicaps. Today's ability to bring more people into normal living, through medicine, does create a high cost, in many cases. Also, in the past, more of these people just died earlier. Flashback to a somewhat critical letter I wrote, back in 1986, to Group Health Insurance Cooperative in Seattle. They responded.