Insurance:
Writing from the USA:
What is insurance
intended to accomplish? What is
insurance actually doing?
Purpose of insurance:
Pay the insured for losses incurred as specified in the contract. This prevents loss of assets and possible
impoverishment of the family incurring the losses. The idea is to have a 'pool' of people who
pay into it and who then take turns using the fund as losses occur. The theory is that the fund will remain
solvent. Originally, insurance purchase
was voluntary.
Problems with this voluntary insurance design:
Insurance funds do go bankrupt due to thievery or
stupidity.
Thievery can come from many directions, from bogus medical
claims, through the denial of legitimate claims and gambling clients' money
while calling their activities 'investments'.
Medical personnel have been known to bill for no visits, or to milk the
number of visits like an overripe cow.
The biggest problem is that these insurance schemes 'insure' more value
than they have, so if there is a flood of claims, money is lacking to pay the
claims. I know of one 'insurance' scheme
that was drained while paying for a political campaign.
The voluntary insurance plans were competitive in the
marketplace, which tended to bring costs down.
The unions pushed for 'benefits' and employers were forced to buy
insurance for their workers, again without any mechanism to keep costs down.
And this was before even more insurance schemes became
mandatory. When insurance became
mandatory, several more problems surfaced like pond scum.
Mandatory auto insurance was instated in Arizona by one of
the most crooked legislatures on record.
The prices for insurance immediately rose and the insurance people went
out and bought new Cadillacs. Their
income is so secure, the police are even notified if a driver does not buy
insurance. The state takes away your
license to drive if you do not pay these insurance people. It was suggested that this insurance be
voluntary, that individuals insure themselves if they so desire, but we were
told that these insurance brokers are the best people to handle our money, and
if you were lucky enough never to use it, you just lost the money. You are not permitted to save this money in a
special account so if you do not use it, you could have it. These insurance people get richer and richer
because actual price controls were never instituted. Insurance prices are so high, people struggle
to make the payments.
I see a huge new problem when mandatory health insurance is
instituted. The medical profession
protests low government payments for services for the insured while they pad
the bills. Exorbitant charges are
foisted off on the uninsured and 'costs' are out of control. They say that about 60-70% of all personal
bankruptcies are caused by medical bills while the patient has insurance. Thus the insurance is expensive, does not
cover the hospital costs yet the patient
is forced to buy it while the medical costs rise unchecked. The cost of the insurance has few controls,
so people must pay more and more every year.
Some attempts have been made to cut administrative costs of the
insurance companies, forcing them to spend on the insured instead of their
second yacht.
The main gripe with mandatory insurance is that the free
market is not working when individuals are forced to buy anything. The lack of controls on charges while forcing
individuals to buy creates inflation in the health care market and a further
drain on other sectors of the economy.
Anybody who calls this capitalism is foolish. The politicians have merged the indigent care
problem with the private market and then expanded it to include more people,
displacing church and traditional family based care systems, while subsidizing
some private businesses paying CEOs huge sums .
My second question: What is insurance actually accomplishing?
Medical care was already available for the indigent but is
expensive for the ordinary individual needing specialty treatment. Express medical care clinics are located all
over town and are reasonable in cost. So
the question was never if medical care is available. The real question is who could be forced to
buy insurance, which would then increase the size of the insurance pool money. So now the IRS is leading the charge to
punish those who do not buy insurance, whether or not they make a claim on the
health care system. They will be charged
whether they use it or not and they will never see their money again. I think it is a function of individual rights
not to be forced to buy. The insurance
companies and the government are now taking a sizeable chunk of income from
consumers, who cannot now spend it on the economy. More and more money is tied up in insurance
every year, which drains the rest of the economy. Unions have negotiated exorbitant benefit
plans that are bankrupting local governments and more and more money is
controlled by the insurance brokers.
So the majority of the people in the USA have good medical
care but at exorbitant escalating costs to themselves now mandated by the
government. Indigent care has always
been freely given. The health care
charge forced by the IRS is justly called a tax by the Supreme Court. All this is not the quality of the health
care, but is about the scramble to collect and hold the money mandated from the
taxpayers. Current insurance systems are
larded with bureaucracy, high operating costs and administrative perks, all at
the expense of the insured. Our health
care money is being spent on expensive administration costs and resort vacations. I think the system needs reform.
Health care goals are being met but the financial cost is
crippling other segments of the economy as the people struggle under the
burdens of mandatory auto and health insurance costs, high fuel prices, and
guaranteed inflation of at least 2% a year, which devalues the money and raises
consumer prices.
Washington D.C. Grand Central Station
