From insurance companies to utilities

If an insurance company is not allowed to factor in risk but instead is forced to cover everyone, regardless of physical condition, and charge them all the same rates, it ceases to function as an insurance company. Instead, it becomes a government-directed utility that just pays people’s medical bills. This is not really any different from government-run health care; it just uses private companies to administer the benefits. This is the point made by Charles Krauthammer:

By essentially abolishing medical underwriting (actuarially based risk assessment) and replacing it with government fiat, Obamacare turns the health insurance companies into utilities, their every significant move dictated by government regulators. The public option was a sideshow. As many on the right have long been arguing, and as the more astute on the left (such as The New Yorker's James Surowiecki) understand, Obamacare is government health care by proxy, single-payer through a facade of nominally “private” insurers.

Perhaps that’s what we want. If so, we might as well just adopt a nationalized one-payer system and cut out the middle-man.

via Charles Krauthammer – One year out: President Obama’s fall – washingtonpost.com.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • DonS

    Except in the individual policy market, we already have that system. Group policies, such as employer policies, are issued to everyone in the group, regardless of age or risk. Here in California, the cost increases as you age into new age bands. If the group experiences higher than average health insurance claims, as a whole, than the group’s premiums can be increased up to 10% above the standard group rates, and, likewise, if the group is particularly healthy, the premiums can be lowered up to 10% from the standard group rates. But, that’s it.

    This whole “Cadillac policy tax” issue has been startling. They are talking about taxing health insurance policies for families that cost $24,000 per year. It’s crazy that there are any of those. $2,000 per month for health insurance? We don’t need government-mandated insurance, leading to more of the same, and even higher costs. We need health care industry reform. We need the government to exit the industry and allow market forces to control pricing again. A number of Christian agencies have arisen in recent years, which allow families to share medical costs outside of the health insurance industry, such as MediShare. I was talking to a dad whose family has joined one of these programs, this weekend, and he said that the model is that you pay cash for your medical needs, then other families in the program reimburse you. You have to write one bigger check per month to be in the program, and preferably several smaller ones as well. When he offers to pay cash, the bill is typically cut by 60% or more! What does that tell you about how well the system is working using third party payers?

  • DonS

    Except in the individual policy market, we already have that system. Group policies, such as employer policies, are issued to everyone in the group, regardless of age or risk. Here in California, the cost increases as you age into new age bands. If the group experiences higher than average health insurance claims, as a whole, than the group’s premiums can be increased up to 10% above the standard group rates, and, likewise, if the group is particularly healthy, the premiums can be lowered up to 10% from the standard group rates. But, that’s it.

    This whole “Cadillac policy tax” issue has been startling. They are talking about taxing health insurance policies for families that cost $24,000 per year. It’s crazy that there are any of those. $2,000 per month for health insurance? We don’t need government-mandated insurance, leading to more of the same, and even higher costs. We need health care industry reform. We need the government to exit the industry and allow market forces to control pricing again. A number of Christian agencies have arisen in recent years, which allow families to share medical costs outside of the health insurance industry, such as MediShare. I was talking to a dad whose family has joined one of these programs, this weekend, and he said that the model is that you pay cash for your medical needs, then other families in the program reimburse you. You have to write one bigger check per month to be in the program, and preferably several smaller ones as well. When he offers to pay cash, the bill is typically cut by 60% or more! What does that tell you about how well the system is working using third party payers?

  • fws

    Adam Smith probably would have supported universal health care actually.

    This is not about free market vs not. anyone who thinks we have anything other than pure government supported monopolies in the health care industry is naive.

    I would rather see the government undo the monopolies .

    since that will never happen, universal health care.

    Just how is universal health care different from catastrophic insurance or natural disaster relief? How does it affect peoples incentive to work harder? how would it make people more lazy and less willing to work?

  • fws

    Adam Smith probably would have supported universal health care actually.

    This is not about free market vs not. anyone who thinks we have anything other than pure government supported monopolies in the health care industry is naive.

    I would rather see the government undo the monopolies .

    since that will never happen, universal health care.

    Just how is universal health care different from catastrophic insurance or natural disaster relief? How does it affect peoples incentive to work harder? how would it make people more lazy and less willing to work?


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