Saturday, November 02, 2013

I'm Not More Politically Active Because They Won't Let You Have Cattle Prods

So the current manufactured scandal afflicting Obamacare (and as an aside, I am more than happy to have the biggest improvement in America's healthcare since Medicare permanently associated with the name of a prominent Democrat, who by the way got bin Laden and Qaddafi) is that many people are finding out that their old plans are no longer available to them under the new insurance rules. My goodness, these people are having to pay more money for better insurance! This is a cosmic injustice that simply cannot be borne! What happened to their freedom of choice? The Republicans, who utterly demand freedom of choice for white males and white males only, are predictably outraged. They are also predictably outraged that people are having difficulty signing up for the thing that they tried to delay, defund, and repeal for the past three years running, probably because it infuriates them that Obama is even better at obstructing Obamacare than they are, but that's a different story.

The simple answer, which for some reason isn't getting more press, is that one of the things Obamacare does is set up minimum standards for what an insurance company can get away with actually calling "insurance". You see, basically there's been a trend over the last decade of predatory, anti-consumer "insurance policies" out there that offer ultra-low premiums, but that have coverage so limited and deductibles so high as to be useless in any kind of practical way. This has been sold as a great alternative for young people without much disposable income and a low likelihood of getting sick or injured...but these are exactly the people who need good insurance the most.

Why? Because if you've got low income and a low likelihood of getting sick or injured, you probably don't have much of a safety cushion in place for when you do get sick or injured. Lots of people are living paycheck to paycheck and can't afford to be out of work for a few weeks under any circumstances, let alone with massive medical bills. These people are basically suckered into taking a major gamble with their health, one that could have catastrophic consequences for their financial future should they get into a car accident or fall down the stairs or get a major illness. And up until now, selling these people high-deductible, limited-coverage plans has been a lucrative scam for insurance companies.

How do we know it's a scam? Simple. If it wasn't, the insurance companies wouldn't sell it. Think of it this way--these plans give health insurance companies thousands less in revenue per person per year. For a theoretically healthy person who's not using their insurance, the insurance company's most profitable strategy is to convince them to sign up for the most expensive plan possible, because all of that money is pure profit to them.

But they're not. They're pushing--actively pushing--the cheapest plan possible. They're tacitly admitting that they make more money when you buy a plan that has very low premiums but less ability to make claims. The only way that this is a financially viable business strategy for them is if they expect you to make claims often enough to more than offset the difference in premium price. In other words, they're gambling that you're going to underestimate the likelihood of making a claim. The only way this isn't a scam is if insurance companies don't understand odds as well as you do. Have I mentioned that they employ hundreds of full-time statisticians and actuaries?

So when the news says, "Obama is taking away your insurance plan, young people!" ...they actually mean, "Obama is ending a scam that ends up bankrupting thousands of sick and injured people each year." But for the news to say that, they'd have to admit that several of the biggest corporations in America have been running a scam on its most financially vulnerable citizens for years and they haven't said anything, and we're not a country that generally likes admitting that the only difference between Blue Cross/Blue Shield and that guy on the corner offering to sell the Brooklyn Bridge for fifty bucks is that one of them wears a suit and tie. So it's easier to sell this as a "choice" and hope nobody's paying attention.

Lucky for us, the federal government is paying attention and doing its job. No wonder the Republicans hate it so much. They've been insisting that's impossible for so long that finding out they're wrong is kind of breaking their brains.

1 comment:

magidin said...

Lucky for us, the federal government is paying attention and doing its job.

Unluckily for us democrats, the federal executive and the democratic party are doing their usual lousy job explaining it to people.

(Just like they've completely messed up explaining the reason that a mandate needs to exist, if you are going to eliminate the "pre-existing condition" issue).