“Uh-oh!”
Estimated 23 million would lose health insurance under Republican bill: CBO
This news story share that about 23 million would lose health insurance under the Congressional Budget Office analysis of the proposed American Health Care ACt (aka TrumpCare) popped up in my Facebook feed yesterday.
The intro said only “Uh-oh!” No solutions, no suggestions, no comments from the poster on any of the contents of the story or the problems of providing health care in this nation. Those spreading a little worry and fear does not bode well for where we are going. To that I thought, “Uh-oh!” The good news was that a few of the readers had suggestions.
I started to drive by the accident, reminding myself “not my circus, not my monkeys”, but then again, I thought maybe a little clarity of the underlying concept of insurance might be in order. Might not be my “monkeys”, but rest assured this is about ur “money”. So here goes. Let’s talk a little about money and paying for insurance since “uh-oh!” there is NO MONEY TREE!
As most of us already know, budget proposals are never passed as delivered to Congress who has the power of the purse in their authorizations and appropriations. But that, my friends, is another discussion for another time, and I would rather not speculate on that which is just a starting point.
However, I thought it might be useful to explain the concept of insurance – what you get and how you pay for it since nothing is free in this world.
This may be a little over the top, but I hope to contrast pure insurance as a choice paid for by those wanting the insurance versus medical care provided by the government as an entitlement and all being taxed.
Investopedia Definition:
“Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.”
Note there are two key concepts to this insurance definition. 1. A loss to be covered by a payor (ins. co.), and 2. The money to pay for those losses comes from a pool of funds shared by the many.
There is a key assumption in this policy. More people who have the insurance, then more evenly divided is the individual burden. The more in the pool, the less the individual costs. If the pool does not include the healthy and young, then the costs will be borne more heavily by others.
Therefore, the critical ingredient is inclusion. And the costs to getting your insurance will vary with the number of participants.
Since the insurance company is entitled to make a reasonable profit, then the amount of medical bills paid will have a direct relationship to the total amount of premiums they must collect. And the amount of individual premiums will depend on those who enroll/purchase the coverage. Therefore, fewer people buying the insurance will mean higher premiums. The more people buying the insurance will mean lower premiums
Whether medical care is provided by way of the insurance model or the entitlement model, there is no way of avoiding the costs charged for the medical care and the manner of getting the money to pay for that medical care (premiums or taxes).
Thus, we are simply talking about the delivery model if healthcare is raised to a de facto right for all.
Now as for those “losing health insurance”. Medicaid and Medicare is still there for those who are our poorest and oldest. The cost of medical care is spiraling up, and the ability to pay for it is spiraling down. Thus, these folks can buy their own insurance, but the premiums may be too high or they simply choose not to buy it. Or with the increased frequency of job changes, simply elect to forego insurance until covered again or stay away completely.
As for the CBO. Not my circus and not my monkeys. But remember, those monkeys at the CBO have no window to the future when they eyeball what people will do over the next few years.