Health Insurance in the Real World

I seem to have missed a few days, but as I was saying . . .

Last time I talked about insurance in general, and how what seemed like a good, socially responsible idea at the beginning had become corrupted into a scam to enrich the already-too-rich.

Today (tonight?) I'd like to explain what health insurance means to some people who were lucky enough to have it (ha ha ha!).

At my last place of employment, I worked as a contractor for a recruiter-contract house that I won't name.  As part of the benefits package for this contract house, they offered health insurance for me, my wife and my family.  I though that this was a nice gesture since, as a contractor, I would not otherwise be eligible for health insurance through the employer, even though this was supposed to be a contract-to-permanent position.

I should probably point out that, before that job, I had been disabled for almost ten months before I recovered enough to go back to work.  At that job, I had FREE health insurance coverage from my employer with a plan that covered 90% of most of my health care costs, with a reasonable deductible, low copays, reasonable prescription drug payments (discounted up front) and an annual out-of-pocket maximum expense per person and per family.  It wasn't ideal, but it was right up there with the best insurance I've ever had.  When I was disabled and went onto COBRA, I was able to get that exact same coverage for the entire ten months for less than $1000 per month, which wasn't too bad, all things considered.

Unfortunately, since there is no universal health care, or even universal health insurance, and there is virtually no regulation of what kinds of benefits an employer is required to offer (oh, my, God - that would be - SOCIALIST!!!!  NOT), this contract house was able to get away with offering the worst insurance coverage I have ever had - the deductibles were about the same, but the coverage was only 70%, with higher copays on office visits and NO up-front prescription drug coverage at all.  I have to submit claims to get reimbursed for my prescriptions, and they routinely take a little more than a month to pay, which means, if I'm lucky, I get 70% of what I need to refill a prescription within a week after the last dosage runs out.

Also, there's an annual maximum benefit.  This is not an annual maximum out-of-pocket expense for me, it is an annual maximum amount the insurance will pay before I get stuck with all the costs.  I'm not even 100% sure how they calculate it, all I know is that it hit me fairly hard last January and I had loads of fun for the next six months working around the limits.

One real hospital visit for about three days, and I will have to declare bankruptcy, and thereafter get "health care" from whatever free clinics I can find because my wonderful insurance won't cover anything.

Not only that, I get the dubious privilege of paying for this exotic coverage, to the tune of over $1200 per month.

I suppose I should quit my crying and just suck it up and act like a man.  The problem is that the job market where I can (almost) afford to live is pretty lean and I've been unemployed now for over a year.  My disability ran out and unemployment pays less than half of that, which was less than half of what I need to keep my house, my car cover transportation for necessities and, oh yes, HEALTH INSURANCE!

Maybe at this point you think I should consider dropping my health insurance altogether.  After all, if it's so bleaming expensive, it must not be worth it.  You may be right, so let's look at that.

One of the scams that our current health accounting (oops, I mean insurance) industry has managed to set up over at least the last 30 years is that they contract out to some approved set of doctors for discounts on their services.  If you have PPO (Preferred Provider Organization) coverage, you go to one of their doctors and get their services at a fairly steep discount.  (Makes me wonder just how good their services can be when they're getting undercut on their rates, too, also to the benefit of the insurance accountants, er, industry.)

If not, you pay through the nose (or whatever other bodily orifice you find most appropriate to consider for this).

If you have an HMO, you're in much worse shape, although, until you get sick, it seems to be a better deal.  If you're young and in good health, maybe you're better off.  I'm neither any more, and I trust HMOs about as far as I'd trust Tricky Dick Nixon and Ed Kaiser, who convinced the nation that HMOs were a good alternative to real insurance.  I'm not going there tonight (but I strongly recommend the movie SiCKO if you have not yet seen it).

So, if I go to see my regular doctors once a month, I pay $20 per visit, plus the $1200+ to cover my wife and kids for their visits.  Without insurance, I'd be paying around $200 per visit, and that does not even begin to include X-rays, lab work, MRIs (especially MRIs - yee-ouch!), outpatient surgery (with any kind of anaesthesia, nurses, ORs, surgical center fees, etc., etc., etc.) or, heaven forbid, an actual in-patient visit to a hospital.

That's the health insurance scam in a nutshell, and Congress is about to give away the store to the health insurance lobbyist industry because that what they paid our "representatives" to do.  If you don't believe me, go take a look at how much money Senator Ben Nelson took from the insurance industry to step on the "public option" (which is a whole other scam, but I digress), or how much Joe Lieberman, a name almost synonymous with Benedict Arnold in many people's eyes today, was paid.

Oh, wait, I forgot - they weren't paid.  They were given campaign contributions.  According to the U.S. Supreme Court, money is the same thing as speech, and we can't restrict the freedom of speech, particularly not for the legal fictions known as corporations, which are, believe it or not, persons with the same rights as individual human beings, under the law.

And that, dear readers, is the real scam in the guise of "health insurance," or any other kind of insurance, in another nutshell....

Insurance - Legitimate Business to Consumer Scam

Today's issue is about insurance, what it was and that into which it has morphed.

A long time ago (I haven't taken the trouble to research exactly when), some people took note of certain costs that a lot of people routinely encountered and figured out a way to make it cheaper to afford those costs.  They set up a risky, legalized gamble where they would collect certain small sums of money from large groups of people as security against a future loss, and then when a loss occurred, they paid for the loss using the proceeds from the monies they had already collected.  The idea was a pretty good one, and soon enough, it caught on like wildfire.  Insurance became less of a risk because the odds, which the insurance companies researched as deeply as they could afford to without adding to the potential losses, were pretty good, as long as the insured people were honest and didn't file too many false claims (and get away with them).

After many years of these practices, the sharks moved in and took over.  They figured out that this insurance stuff looked pretty lucrative, and they could make it even more so with an number of provisos.

First, they had to prosecute false claims.  Then, they arranged to make it a serious crime (probably with massive campaign contributions) to defraud an insurance company.  Gradually, they expanded insurance to the point where it covered lives, property losses, health care costs, car damages, liability for damages in virtually all areas, and more.

But it was still a risk.  When people had catastrophic losses, they expected to be able to collect astronomical damages, maybe even more with punitive or exemplary damages as well.  So, the insurance companies went to their friends in the legislatures again (and we all know that these are the kinds of friends that money can buy, over and over again, with or without term limits - probably more in the latter case) and arranged to make automobile insurance a legal requirement for a person to be able to register a vehicle.  They went to the banks and mortgage companies and convinced them that a mortgage wasn't safe without casualty insurance on the property.  They went even further and convinced the bankers to require title insurance on every sale of real property, which reimburses the buyer (i.e., the buyer's lender) if the property turns out not to have been owned by the seller.  (How often does that happen in real life?)

They even managed to convince the lawmakers that the costs of the fields that were insured could be brought down by placing legal limits on how much an injured person could collect from insurance (in the guise of the insured ones who caused the problems and were shielded by the insurers).  To everyone's surprise (haha), insurance premiums did not go down, but insurance company profits went up!


Then there were mergers and acquisitions, and each time the insurers grew richer and bigger, and the laws changed to allow them more and more latitude.

And still it wasn't enough.  There were risks that they might not be able to wring every possible dollar and cent out of an increasingly impoverished clientele (a.k.a. the public - you and me).

So they went back to the lawmakers and arranged to be allowed to cross the lines that were established to prevent another depression, like 1929 and its aftermath, so they could go into business with bankers, credit card issuers and other financial institutions.  They became too big to fail (which really means that they were so big that their failures would cause economic damage on a global scale yet to be fully realized).

Finally, they created the most colossally unbelievable financial insurance of them all - credit default swaps, commonly known as derivatives - as a way to insure against the loss of an insurance policy on a financial instrument that might actually have some value.  In other words, they created insurance for insurance.

A lot of this has been going on for years and years - decades, actually, but it was all carefully kept secret, hidden away from prying eyes of the average person who a) wouldn't understand what it was, b) couldn't possibly collect any money from it anyway, and most importantly, c) might think these things were pretty fishy and try to get them taxed or outlawed.

In the spring of 2008, to the great consternation of people who were completely ignorant of all of these things, some of these now gigantic insurance schemes began to unravel.  By fall, the unraveling could no longer be hidden even from the mainstream propaganda media, and more and more massive losses, staggering losses, began to pile up as first the real estate market and then the derivatives market began to fall apart.

So, the banks/insurers/credit-card-issuers, who can never get enough of our money, not even if they have all of it, pulled the greatest scam of all - they went back to their favorite toys, the lawmakers of the land, and convinced (most likely through covert bribery, also known as campaign contributions, overt bribery and outright blackmail) them to cover their losses with "tax money" (really just paper printed by the biggest insurance scam artist of all, the Federal Reserve, whose money is not even real money) because they had no prayer of being able to do so themselves.

After all, a lot of them were too busy going on multi-million dollar luxury cruises and buying expensive cars, land or other property that was also losing its value at a staggering rate.

Now we, the taxpayers of the United States, are getting stuck with a bill that has been predicted may run higher than $25 TRILLION, which is just less than half of the current market value of the entire resources of planet Earth, and enough to enrich every nation on the planet except - oh, yeah, U.S.

That's what insurance is all about.


Come back soon, when I'll talk about just how wonderful a thing health insurance is and why we need to reform it so the insurance companies can make even more money!

Just my $0.02, and not even worth that much (in 1960's equivalent copper pennies) any more....