It's Time to Bet on Health Insurance Reform

[Blue State Blues]

Beau Friedlander
Editor-in-Chief, Air America Media

By now you know that "health care reform" is a misnomer. It should be called "health insurance reform." Chalk up the missed opportunity to the Democrat's pluralist mode, but a little message discipline might have gone a long way here.

What's the message? Insurance companies are corporatized casinos. It's still gambling. Actuaries perform the same function as bookies: discover how to get more money out of you than you can get out of them. In theory, this is fine if the bets are being placed in a neutral arena. Health care is not neutral.

Friedlander explains the insurance concept of moral hazard, the risk that an insured person will take risks or use services because someone else is paying. He then explains that it is one thing for an insurance company to refuse to pay a claim on an auto or a home owner's policy, because the insured person has time to appeal the decision and can fight back.

He then continues (emphasis mine):

There is no time to fight back when an insurance company refuses to pay for a new cancer treatment. Moral hazard comes into play here. It is against the law for a third party to take out a fire insurance policy on your home, because arson would become a real risk. The fine print of an insurance policy is an institutionalized form of moral hazard in reverse. It's the price of doing business in America, and it's something we've learned to accept with regard to the property we choose to protect with insurance. It is not morally defensible when the issue is a human life, and that's the point we've lost sight of in the health care reform debate.

If folks get a little doctor-happy when they know someone else is paying, insurance companies might tend to get a little miserly. Both are expressions of moral hazard, and no one is to blame. The very nature of the health insurance industry is antithetical to its stated reason for being: helping people stay well and to get better.

Only a sick society allows its institutions to bet on the lives of human beings. It's the stuff of ancient Rome. The chances of a person surviving a particular form of cancer are known, but they should not predicate whether or not you receive the best care. In the same way you can't bet on your enemy's house being burnt to the ground, insurance companies should not be able to bet on human life. This is a moral issue.

Read more at: http://www.huffingtonpost.com/beau-friedlander/its-time-to-bet-on-health_b_320291.html