Health Insurance- What a Scam?

Note from Dan: While I’m away with my family on vacation, I’m treating you to some columns from the past year. 

This one appeared March 13. The health insurance industry is alive and doing very well. Once again, I’m pondering what to do after I get out of this writing business. I’ve decided to form a health insurance company. In my own increasingly jaded view, it’s the best racket going. Boiled down to its core, insurance is bookmaking. 

When you buy auto insurance, you’re placing a bet you hope you don’t win, because that probably means you got into an accident. The same goes for life insurance. It’s a bet you will die. If an auto insurance company or a life insurance company fails to pay off, customers will flee and the company will go out of business. The same happens to a bookie who welshes on paying off sports bets. 

But health insurance is different in a number of ways. First, most of us are captive customers, signed up with the insurer their employer chooses and subsidizes. We can’t easily or afford-ably jump to another company. Second, health insurers employ legions of desk-jockey goons. 

Their goal is to find loopholes on how not to pay off on health insurance claims, and to deny coverage for procedures your doctors say are necessary. One of the ways they keep you confused is via those confounding Explanation of Benefits forms, which are hard for anyone who doesn't have a master’s degree in accounting to understand. 

These are separate from your medical bills, mind you (which are always formatted differently than EOBs). Actually, that’s the point — to create a big ball of confusion so consumers will just give up trying to get their insurance company to pay. If you call the company and beg them to pay, you’ll get one of these desk jockeys. 

Most of them have been trained never to give you their last name even though they insist on knowing yours. This is a great strategy for avoiding accountability for whatever they tell you on the phone. Third, the health insurance companies also employ another kind of goon. More or less, they blackmail doctors and hospitals into giving steep discounts on services to patients. 

No discounts, no patients. So the docs and hospitals bend to the lower rate, at the same time your premiums are rising. It’s like a bookie charging losing bettors more while pressuring winners to accept less. Except no bookie would try to bill this as “cost control.” The effect of all this is that the bookies — I mean profit-motivated health insurance companies — are cutting themselves larger and larger slices of the health care spending pie. 

They take some of those profits and invest part of them in Washington lobbyists who curry favor with politicians, who in turn vote against your interests — and in favor of the insurance companies. In that way, your hard-earned premiums help pass laws so they can screw you more down the road. Did you get that? 

You’re paying for your own shellacking. Nowhere was this more evident than in Washington during the debate a while back over the Affordable Care Act. Thousands of lobbyists, a large proportion of them from health insurers, fought for months over that bill. The nation’s 535 senators and representatives, many of whom get campaign contributions from the health insurance industry, naturally rolled. 

What emerged was better than nothing in certain ways. But despite what you have heard, it was not at all “government health care.” Instead, the law requires everyone to buy private health insurance. You could call it a full-employment act for private health insurance companies. “Government health care” exists, of course. It’s called Medicare, and it’s the most efficient health insurance out there. 

It’s for old people the private insurance companies don’t want. Putting everyone on Medicare, however, would once and for all end the profits that the health insurance companies are earning on the backs of people who get sick. That would put those companies and their lobbyists out of business. 

They will never let that happen. They will spend millions upon millions to convince you that would be un-American, and they will win that battle. This is why I’m thinking about getting into the business. I can’t beat them, so I’m going to join them. I’ll call my company ELEM Health Insurance. The acronym stands for “Everyone Loses Except Me.” Join me. We’ll make a mint. Otherwise, you can’t win.