An Insurance Lesson

Next time someone tells you how great the idea of not allowing insurance companies to deny people for having pre-existing conditions is, ask them the following:

Let’s say that my electric bill is $80/month. I’ll make you an offer: I’ll pay you $10 each month, and you pay my electric bills each month in return. How does that sound?

Of course, at best, you’d laugh in my face at such an offer. At worst, you’d call me an idiot for thinking of it.

Now let’s say that the government tells you that you have to accept my offer, you can’t raise my rates, and you have to offer this deal to everyone else, too. How long do you think you’re going to remain financially solvent? Answer: Probably not long.

Well, that’s exactly what all the “pre-existing conditions” business is, with you being the insurance company and my electric bills being replaced with my medical bills. And each number being multiplied by 10 or more.

Lest anyone think me a cold-hearted person, I certainly do not wish for anyone who needs medical treatment to go without it. My mother is in such a condition herself. She just switched insurance companies because the one she had was screwing around with her rates and coverage, and quite frankly, it’s rather generous of her new company to offer her a $100/month payment when her prescriptions cost over $1000. There’s no question they are losing money on her.

That being said, it should not be incumbent on insurance companies to provide private welfare to those who are already sick. Insurance is supposed to be a form of protection against something bad happening down the line, not a bailout program for once something bad has already happened. At the very least, if an insurance company is going to make offers such as they have to my mother, we should recognize that it is a bad deal for them and reward them for doing it for as many people as they do, as opposed to demonizing and punishing them for not doing so for all. If we keep doing so, they will simply run out of money, and we’ll have no place to turn.