HEALTH INSURANCE AND THE BORDER WALL

Since the Inauguration of President Trump anyone who’s flipped on a news program, watched a typical talk show, has picked up a newspaper or read stories on line has been besieged by a never-ending series of stories that are negative.  Most of those have been directed toward the president – but Republicans in general have also been beneficiaries of the sometimes brutal tripe that is put out for our consumption.

One of the loudest cries has been, “They have had seven years to come up with a replacement for Obamacare and they don’t have a plan to replace it.”  Well, the House passed a replacement plan the other week.  So, of course, the usual parade of vitriol, directed to a bill that will probably little resemble the final version if it even gets past the Senate, has begun.  Both sides are missing the point – and in their obfuscation of the facts, the American people have been led down the proverbial primrose path as well.

Neither the Obamacare legislation nor this replacement are about healthcare.  They are both about health insurance. Before I attempt to establish my point, we should have a brief discussion about the nature and purpose of insurance.

Insurance is a vehicle by which two parties share risk on an agreed basis and in exchange for a certain amount of money (premium).  That principle is the same whether the risk is a home, a car, an individual’s health or his life.  Having insurance does not suggest that your home won’t be lost in a fire, your car will never be involved in an accident, you will never get hospitalized or that you won’t die.  It merely mitigates the financial effect should any or all of these things happen.  That’s insurance plain and simple.

One, but not the only problem with the Obamacare insurance scheme, was that it was based not on reality but on ideology.  This explains why insurers are abandoning the exchanges in droves.  It might be politically correct to charge the same premium to men and women of the same age the same premium.  But those premium charges ignore the facts that women are more expensive to insure than men because they typically have more hospital stays than men – in part due to pregnancy.  Similarly, it is absurd to consider a person who has an extensive history of heroin addiction to be in the same health as a person who has never used the drug.  Yet their premiums were mandated to be the same by the law.  Abandoning sound, actuarial facts results in financial chaos for the insurers.  And that is the simple explanation of why they have been withdrawing from Obamacare.

Now those on the left will point to their exit as being a function of sheer greed on their part.  But think about this.  If an insurer cannot assemble a risk portfolio which enables them to earn a profit, eventually they will run out of capital to pay legitimate claims.

The new replacement law will probably not do much better because it also is predicated on the misconception that health insurance and healthcare are interchangeable terms – which they are not.  And this fixation on health insurance, were it not such a dominating force in this discussion, would be laughable.

I am not arguing that insurance, whether health or any other kind, has no value.  It does.  It gives the owner some peace of mind.  But insurance is unique in that it is the only product whose owner hopes never to collect on it thus recouping his premium payments.  No one wants their home blown away by a tornado or their car wrecked in an accident or wants to have a serious medical problem or have a loved one die just so they can collect on the insurance proceeds.

So as we have seen, the value of insurance is in mitigating the effect of a financially tragic event.  It does nothing to prevent that event.  Real healthcare would focus not on responding to disease but in preventing it in the first place.  That is an argument that is seldom heard in the Congress, the medical industry or the press.  One can only wonder why.  And the old saw, “Follow the money,” presents perhaps the simplest and most likely answer.

Our focus as individuals should be on staying healthy rather than getting better. So what if the new “healthcare” bill had a provision that funded a massive effort to eliminate cancer or cardiovascular disease?  That would be something that would receive great press and high endorsement from the voting population.  But one has to wonder if all those “charities” that have been raising money and paying their executives high six and seven figures for the last fifty years would be on board with that.

The truth of the matter is that there is a great deal of money and profit in having a population that is diseased.  If a cure for diabetes were announced, how would that impact the profits of those companies who manufacture insulin and all the ancillary products that are used to deliver it to the patient?  Their profits would plummet.  Do you feel they would adopt a laissez-faire attitude were the announcement of such a cure to be imminent?

We have spent hundreds of billions of dollars funding the CDC and NIH.  Presumably, we do so because we trust the research and recommendations that these two organizations make.  They are supposed to be independent and free from political pressure.  And they may well be.  But once they make a recommendation, it is up to our politicians to review and, if it has merit, to implement it.  So let’s look at the reality of what really happens.

Both of them have attributed the rampant ratchet up in overweight, obesity and diabetes to Americans’ over-consumption of sugar.  Have you heard even a whisper of this analysis in the “healthcare” debate?  Of course not.  And the reason is very simple.  The sugar industry not only contributes to the re-election campaigns of our politicians as do Coca-Cola and Pepsi, two of the companies that substantially contribute to Americans’ sugar consumption

One can understand how a company wants to maximize it’s profits and sell as much product as possible – irrespective of it’s harmful effects – until forced by public opinion and ultimately government to accept responsibility.  But what is truly amazing is that the American sugar industry is subsidized by our government, the NIH and CDC reports notwithstanding.  (By the way, the tobacco industry which is widely reviled, also still receives federal crop and insurance subsidies – even as the feds and local governments continue to heap large excise tax increases on tobacco products).  These obviously conflictive official and “real” policies can only be described as disturbing – if not downright corrupt.

This is an excellent example of the swamp about which candidate Trump spoke when he was campaigning. And I suspect now as president, Mr. Trump is probably amazed that swamp is as extensive and thoroughly alluring to those who have helped create it.  Sadly, running and fixing a massive federal bureaucracy is going to be more challenging than running or fixing a business.

Perhaps that reality is no more apparent than as regards the border wall.  What most voters believed was going to be a solid and impenetrable brick and mortar edifice may have morphed into something less contiguous and involving more modern methodologies than Hadrian employed in Britain.

What we should realize is that the point of building the wall is not “building the wall.”  It’s securing the border and cutting down on the inflow of illegal immigrants who have had free reign to come into the country.  One of the tools which, based on the recent decreased number of illegal entry attempts, is not the wall, which has not progressed, but the mere threat, the power of the Trump administration’s bully pulpit with respect to enforcing the laws that are already on the books.

I view and always have seen the “border wall” in somewhat metaphorical terms.  If we could accomplish the goal of reducing the illegal flow of people into the country without spending money to construct a physical structure, I’m fine with that.  After all, accomplishing that goal should be our primary focus.

Wouldn’t it be great if we viewed “healthcare” in that same light?