There is an idea that keeps persistently arising that seems to be gaining popularity. It is a variation of two propositions.
a) The Church should provide health care to all her members from gifts from the faithful.
b) The Church or a para-church organization should organize a cooperative insurance company to provide medical insurance and/or services.
(a) has no basis in reality. I’m not being snarky. I’m being direct. Relief funds to provide health care and old age assistance for retired priests and nuns are nearly insolvent. Let me repeat that so that it sticks. Relief funds to provide health care and old age assistance for retired priests and nuns are nearly insolvent. We both know that the population of aged religious is significantly smaller than the population of Catholics in the United States. It is smaller than by more than a few orders of magnitude.
But this isn’t the only problem. In the Archdiocese of Milwaukee there are 650,000 Catholics. A very rough estimate of the cost of providing health care for this population would be $3,250,000,000. The bishops appeal last year was for just short of $8 million. Is there any evidence anywhere that Catholics would be prepared to offer the support necessary for such a system even if they desired such a system? It isn’t like the Church has the power to tax people.
(b) sounds like such a wonderful idea. (b) has been tried though. (b) was part of the reforms under Clinton, if I recall correctly, that allowed associations to market to their members health plans. If I remember, a few of these organizational plans were even operated by Catholic organizations, although that point is one I’m not all that firm on. This was originally marketed as a way to allow small business to get the advantages of a larger risk pool. The only problem is that many of these plans are bankrupt, and nearly all the rest of these plans are no longer competitively bid.
The reason why isn’t all that complex once it is explained. Picture a teeter totter. As you go higher, the cost gets higher. As you go lower the cost gets lower. You as an individual or small business stand on the fulcrum. You are a member of 2 risk pools – possibly more, but rarely: You as a sole entity and the association. You price insurance for yourself and the association. If the cost is less for yourself, you walk over to the left side of the teeter totter, causing the right side to go up. When things are re-evaluated in another year, some on the right side of the teeter totter go over the left side because their premiums are now lower when their risks are evaluated in their own right. This causes the right side of the teeter totter to go up again. Eventually the right side of the teeter totter becomes a high risk pool that no one wants to touch with a 10-foot pole.