Interesting story on NPR today about how California’s insurance companies are raising rates for people who are not in jobs that provide insurance for them, although I’m sure those will be next.
The story may be viewed here (click). The key paragraph is this one:
So what does WellPoint have to say? The company got the letter and is working on a formal response. In the meantime, the insurer issued a statement saying rates reflect rising costs of health care. “Unfortunately, in the weak economy many people who do not have health conditions are foregoing buying insurance,” the statement says. “This leaves fewer people, often with significantly greater medical needs, in the insured pool.”
In other words — the insurance plan depends on healthy people to pay the bills for unhealthy ones. Farther down in the story the spokesperson for the insurance say, in so many words, that people need to be required to join policy groups to spread the costs around.
That, my friends is socialized medicine. It’s nothing new, it is how insurance works.
With medical insurance costs rising as the cost of medical care rises, the people who feel healthy enough to gamble are dropping out, leaving the sick and the non-gamblers to pay their own bills.
What I find interesting is the lack of cheering from the anti-socialized medicine crowd over California’s situation. Market forces are coming to bear, people are declaring their freedom from socializing medical care, and those who actually get sick are having to face their responsibilities, not shift them off on the rest of us. All we need to do now is get rid of Medicare, make those slacker old people pay their own bills (or their equally slacker children, which is more likely) and life in America will be free and perfect once more!
Is that not what people who deride government health care plans call for?
Maybe not. What all this really means is that the rising cost of health care, coupled with the declining economy, is going to put the business model of private and corporate medical insurance into a death spiral. As families see their insurance rates go up to really scary numbers, $20,000 or so, and that’s with a $5,000 deductible, they’re going to realize that they can pay most of the costs of medical care themselves if they’re willing to assume the risk.
Which means insurance companies will get stuck with only the horrendously expensive patients, which they’ll not be able to pay for because there are no healthy people paying in. They’ll come crying to Congress for help, and unfortunately they’ll probably get it. All those bribes-er-campaign donations will come home to roost.
What SHOULD happen is they should be forced to go broke, or to have to cancel all single policies, either way creating a national emergency because then hospitals and doctors won’t have anyone paying their bills. That will finally force the nation to do what it should be doing now: Socialize health care with a national single payer plan. Everyone would pay in because they’d all have to, but everyone would get their bills paid.
We might as well. Wehn the insurance companies go broke, and when people without health insurance go broke, we’ll all pay their bills anyway because society absorbes their debts in the bankruptcy proceedings.
The conservative thing to do, the practical thing to do, would be to forsee the problem now and take steps to avoid it, thus avoiding all the suffering and societal upheaval while achieving the same goal.
Will that happen? Sure, right about the time pigs fly.