Let's assume insurance companies operate for free and all employees are unpaid volunteers. It would take 400 homeowners paying into the pool to relieve the one who suffers a loss. Suppose half the homeowners decided fire was unlikely and canceled their policy to save $500. What would happen to the cost of insurance?
In the short term, the cost would double to $1,000 to rebuild the same home. Suppose one of the uninsured homeowners suffers a catastrophic fire. Should the 200 homeowners who paid to protect their home pay to rebuild the uninsured's home?
With all of the recent IHC bashing, these simple principles appear lost on some. Each month I pay an amount equal to a new car payment so that my family has health insurance. In the six years I've owned this policy the insurance company has never had to pay on our behalf.
But I don't want to sell my home so my child can receive a life-saving operation some day. I could have a new car or take nice vacations. Instead I drive an older vehicle, we go camping, and we have health insurance.
Some people believe it's not fair to expect them to pay for their own medical care. A single mother had an employer-sponsored health plan available to her. The employer paid the entire cost for her coverage but required a $30 monthly payroll deduction to insure her child. She refused the payroll deduction explaining that if her child needed care, Primary Children's had charity programs available.
It's really not that difficult to obtain medical insurance. If you or your spouse can work full time, you can usually get medical insurance regardless of your health. Our military will provide you with medical benefits and I hear they're hiring. There's no guarantee that you'll find this employment rewarding.
The healthy can qualify for an individual policy. As long as they keep paying the premiums, they can't be canceled if their health later deteriorates. The financially successful can continue the benefits of former employers through the COBRA/mini-COBRA programs, conversion options or the HIP program.
True, there are still people without options. Most of these people gave up their options when they stopped paying for coverage. Who can blame them? Medical insurance premiums have risen 15-20 percent for years with no end in sight. Are insurance carriers just greedy or is there some explanation?
Medical technology has developed treatments (and prescription drugs) for conditions that previously had no treatment. You either suffered with your condition or you died. Improvements to your medical policy may be unnoticeable. The policy language may not change, but there are more treatments to cover today than there were 10 years ago.
Ten years ago, a $100,000 medical bill was rare. Within the past six months my father and a nephew each incurred hospital charges exceeding $100,000. It took 400 people each paying $500 (and not filing claims of their own) to finance the medical expenses of these two people. Fortunately for them, they had insurance. But what if they hadn't?
Catastrophic medical expenses are one of the leading causes of bankruptcy. A recent story indicated that politicians favored leniency for those whose bankruptcies resulted from medical expenses. Put harshly, it's OK to be financially irresponsible with your health. If you didn't make medical insurance a priority, we won't expect you to repay your health-care providers when you're sick or injured.
This leaves health-care providers bearing a disproportionate share of our country's insolvency. Don't doctors and hospitals have expenses, too? How can they afford to offer free services? They must raise prices on those who do pay, often those with insurance. But if insurance companies have to pay more to subsidize those who don't pay, what happens to insurance premiums? I think you're getting the picture.
Charity medical care is not free. It is a gift financed by those who pay for medical care.
When will we learn that forcing insurance carriers to pay more will only result in higher medical premiums for the insured? Higher medical premiums will force more of the insured to drop coverage.
Perhaps we should require every individual to have a catastrophic policy that covers annual expenses falling between $10,000 and $300,000. When everyone pays, costs fall.
We must protect our health-care providers from the insolvency of others. Optional coverage for the first $10,000 of expenses and expenses exceeding $300,000 could then be purchased at affordable prices because the major risk has been eliminated.
Some believe that everyone should have coverage, and I agree. But it is not enough to wave a magic wand and deem everyone "insured" by legal statute. Everyone must pay for insurance. The risk pool needs more contributors, not merely more members.
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Debbie Santage is a certified senior adviser and Salt Lake City independent insurance agent.
