A Dishonest Conversation on Healthcare

The conversation our country is having about healthcare right now is not honest. It’s not just the Republicans, the Democrats are just as dishonest, in a different way. Republicans talk about government death panels denying care. Democrats talk about insurance company death panels. Both positions are intellectually dishonest. Both Republicans and Democrats know that a part of insurance is drawing boundaries around the care that would be paid for by the group.  Any care outside that boundary doesn’t get paid for.  You can frame it any way you want, but this is a critical part of any insurance.

Insurance, whether healthcare or auto, is a risk pool.  A group of people pay into the pool and hope they don’t have to use it – hope they don’t have a wreck on their car, don’t have to go into the hospital.  Those few that do have to use it consume most of the money in the pool – the risk pool spends tens of thousands on the people that have serious car accidents, or hundreds of thousands of dollars on someone that has cancer.  That means that everybody else in the pool helps pay for the costs of the unlucky few.  Healthy me pays for the costs of tripped and broke his leg Bob.

The worst part of the Affordable Care Act that nobody talks about is its removal of caps on annual and lifetime awards.  There is no limit to the risk that the risk pool assumes.  Before the ACA, an annual cap for an insurance plan might be $500,000, with a lifetime cap of $2 million to $5 million.  Now those caps are gone – there is no limit to the amount of money a risk pool has to pay to keep someone alive.

This is a great thing if I am the parent of a premature baby, with medical bills approaching $1 million dollars, or a person with cancer that doesn’t respond to the first or second treatment.  But it’s also a choice.  No nation has an unlimited amount of money to spend on healthcare.  The more money we spend to keep the extreme cases alive, the less money we have to spend on wellness, or prenatal health.  The more money we spend on healthcare, the less we spend on education and roads.

The Democrats like to pretend it is the cold hearted insurance companies denying claims for its own benefit, protecting its profits.  Again, this is intellectually dishonest.  Insurance company profits are less than 5%, and even if you add in the executive salaries only a couple of points higher.  The insurance companies are trying to make sure that the amount of money contributed into the risk pool by all of the participants is enough to cover the cost of care.  The insurance companies are trying to keep everybody’s premiums from having to go up next year.

As harsh as it is to say, we can’t afford to save every life.  We can’t afford to pay for every $200,000 experimental treatment for a person on their deathbed.  The Republicans of course, are too afraid to just come out and say this, to state the obvious that we can’t afford to spend an unlimited amount of money saving any one person.  Instead they propose a strange bill that tries to limit how much government would pay but sidesteps the hard questions that our society has to answer, sidesteps a rational conversation on caps on healthcare spending.

It’s very possible that the Republican’s current bill will crumble under it’s own weight – it’s hard to bring real change without an honest conversation on the problem.  Let’s hope the Republican Party eventually remembers that it was the Daddy Party, and starts a real conversation about healthcare tradeoffs and costs.

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