Imprimus: A Short History of American Medical Insurance

Link to source.

Bottom line: Insurance is a lousy way to pay for health care.

Here the basic observation is that creating an artificial pool of money to pay for needs inspires an industry of special interests to form around the pool for the purpose of exploiting it. In the process, the hope of mutual aid becomes stillborn.

12 thoughts on “Imprimus: A Short History of American Medical Insurance

    1. RE: “cost of care is [the problem]”

      According to the article, cost of care is the reason the hospitals invented Blue Cross/Blue Shield to begin with. The whole idea was to get people who don’t use the hospital to pay for those who do.

      The boondoggle should have been obvious, but I suppose people thought they were getting something for nothing.

      Liked by 1 person

      1. Boondoggle?
        You mean how insurance companies try to get people to pay for fires in other people’s houses or damage to other people’s cars?

        With that said, the system that has evolved from those Blue Cross beginnings is a dog’s breakfast of profiteering, bureaucracy, waste and corruption. Time to cut the Gordian Knot. Time for Single. Time for Medicare-for-all instead of Medicare-for-some.

        Liked by 2 people

      2. RE: “You mean how insurance companies try to get people to pay for fires in other people’s houses or damage to other people’s cars?”

        That’s one way to put it. Taxes that pay for entitelments do the same thing, as would Medicare for All.

        Like

    2. If we actually knew the cost of care, maybe not such a problem.

      One thing is for certain, as insurance goes, Medicare has one supreme advantage over all other medical insurance… it’s nation wide.

      Liked by 1 person

  1. Good history of health insurance.

    One thing that we need to consider is how to get the individual to be the owner of insurance. That is, get the employment factor out it completely.

    Liked by 2 people

    1. RE: “how to get the individual to be the owner of insurance”

      Nothing easier. Just make insurance premiums so high no one can afford them. Or explain to people that self-insurance in the form of saving and investing is almost always better for them financially than giving their money to an insurance company.

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      1. Self insurance is fine for those who can afford it. Catastrophic coverage with HSA’s is not bad,but again for those with incomes high enough to start a HSA.

        A bad accident, cancer, heart surgery are all in the multi-six figure ranges now. Even middle to upper middle would have a hard time paying $250,000.

        True, if everyone did that, the prices would have to come down eventually or there would be no patients. But until then, a lot of people would suffer.

        Then we have to find out a way to train doctors for less than the debt loads the med students ($200K is not out of the norm.) now carry which drives too many into lucrative specialties instead of primary care.

        It is a tough nut to crack with so many players in the field who all want to keep making a lot of money.

        Liked by 2 people

      2. RE: “Self insurance is fine for those who can afford it.”

        The point is, self-insurance is better even for those who “can’t afford it.”

        Keep in mind, the whole point of mutual aid insurance is for those who don’t use medical services to pay for those who do. But there is no conceivable advantage in paying for other people’s health care instead of your own. Better to keep your own money and deal with problems as they arise.

        You might think that in return for giving your money away, you get a promise that gives you peace of mind that you will be taken care of. But for most people most of the time, that promise comes at a very dear price: They vastly overpay into the system for the services they actually receive. The system couldn’t work otherwise.

        In other words, to extend a benefit to those least able to care for themselves, the system rips them off.

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      3. Ooooh, oooh “self-insurance”… Like Romney? And then his famous 2012, “I like being able to fire people who provide services to me. You know, if someone doesn’t give me the good service I need, I want to say, ‘You know, I’m going to get someone else to provide this service to me.’”

        Self-insurance. How much wealth should one have before going that route? I’ve known two people whose healthcare insurance paid out — that’s paid out, not been billed — over $250,000 for less than one week in a hospital. Self-insured?? Better have more than $1M. Remember, the ACA not only struck down preexisting conditions, but it also eliminated lifetime limits.

        Liked by 2 people

  2. I read the piece and my takeaway was 1) While the author may disagree (as any good Libertarian economist would), it would make more sense to improve the ACA to ensure protection for those with pre-existing conditions, provide for competition across state lines, and tort reform.

    2) The advocating for death panels was (and is) a heartless way to take care of people. A recommendation would be a Living Will and a Durable Power of Attorney so that family members know the wishes of the afflicted and can have done what the individual wants done. (My mother’s DNR order, along with Living Will helped my brother and I deal with her passing in the manner SHE wanted.)

    Like

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