Why Call It Insurance?

Marmor et al, in their recent book, do an excellent job of illuminating and analyzing “social insurance” in the United States.(1) This is a term that the authors used to refer to public policies that protect citizens against the six greatest risks that threaten personal and family well-being, one of those risks being ill health. But here, the term “insurance” is more of a metaphor and not a reference to private, personal insurance. These authors end up concluding that universal health care is “not unaffordable but could be in modern-day America, where a commitment to market-based solutions to rising health care costs may make unaffordability a self-fulfilling prophecy.” The health insurance game is one of those solutions that is preventing the creation of a sustainable, universal health care system in our country. 7% of U.S. health expenditures go to insurance administration. That’s $531.20 per capita per year. Countries like Japan, Finland, Australia, Austria, and Canada spend from $53.60 to $153.30 per capita.(2)
It is mind-numbing to listen to the cacophony that rises up from the health policy interests in the United States today. Moral hazard, cost-sharing, eligibility, co-pays, silver plan, risk-management, narrow networks, rating band, medical loss ratio, underwriting, the HIAA, exchanges, etc., etc. We have arguments, debates, laws, rules, complex computer programs (and glitches) all to continue the charade that the answers to our national health care problems lie in tweaking an insurance system. There is nothing inherent in paying for our basic health care that requires some sort of medical insurance. In fact, this particular mind-set is rather unique with the United States. Most developed countries defer to private insurance only for uncovered items such as private hospital rooms, cosmetic surgery, etc.
Traditionally, the term insurance referred to a contract by which regular payments were made to provide financial recovery in case of severe, unpredictable, emergencies (accidents, fire, death, etc.). For most of us the term insurance still carries that implication. But this meaning fails us when we try to apply it to all of the health care needs people have during a lifetime. Many of those needs are preventive, or routine, or comfort-driven, or for disease management as well as emergencies. We don’t talk about pre-school insurance, kindergarten insurance, K-12 insurance. We don’t talk about fire insurance to put out our fires or police insurance to respond to our 911 calls. We don’t buy highway insurance policies so that we can drive down the road to our family or jobs. We don’t buy National Guard insurance so that we can receive aid and protection in emergencies. The problem is that we keep trying to find ways to provide for our health needs within an insurance system, distorting and shape-shifting the elements of that system. It is not more or different insurance that we need; it is a different framework. Let’s stop talking about eligibility, copays, etc. Let’s talk about a real, comprehensive system that defines, guides, and finances adequate health care for everyone. This is the moral imperative. We must do it, not just because our economy requires it, or because every other developed nation has done it, or because we lag behind most developed nations in healthcare results, but because it’s the right thing to do.

As R. Paul Olson says: “To state this more generally, I am asserting that ensuring universal, equitable access is not merely an aim, it is an obligation; it is not merely a goal, it is also a duty; it is more than merely a noble ideal we might like to realize if only we could afford it; rather, it is a reality we must bring into being for the entire population our health care system is designed to serve. It is morally unacceptable to say that universal health care is desirable, but optional; rather, it is a goal we must achieve because it is grounded in a universal human need, not merely in what people want. Universal access must be ensured as a priority and prerequisite for a health care system to qualify as a morally justified system. Other factors being equal, a health care system that provides universal access is morally superior to a discriminatory system that limits, delays, or denies equitable access to portions of the population. Stated positively, the ethical arguments in favor of universal health care are so compelling as to make implementing it a moral mandate. It is also a practical necessity because to someone denied access, it simply does not matter that the system provides high quality and cost-effective care. Inaccessible care is ineffective care; indeed, inaccessible care is no care at all.”(3)

Suggested Reading:
(1) Marmor, TR, Mashaw,J, Pakutka,J. Social Insurance: America’s Neglected Heritage and Contested Future. California, CQPress, 2014, p 134.
(2) OECD (database). Version 06/2011 The Commonwealth Fund Commission on a High Performance Health System October 2011.
(3) Olson, RP. Moral Arguments for Universal Health Care: A Vision for Health Care Reform
Indiana, AuthorHouse, 2012 , p7-8.

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