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Blog of Mass Destruction

Healthcare Insurance IS Socialism

By The Reverend Published: August 15, 2013

No links. No references. Just The Reverend opining.

Because conservatives and Teas have been pep-rallying themselves in preparation for creating yet another needless crisis over Obamacare before September is out.....I thought I would mention something about the for-profit health care insurance industry, you know, the "market-based" healthcare insurance industry.

Conservatives and Teas hate that government is involved in providing healthcare at all. In their Randian dreamscape, the divine and invisible hand of free-market capitalism is the answer to all consumer needs. Yet it is exactly because private health insurers did not want anything to do with covering old, sick people....that we have Medicare today. The "market" didn't work for the geezers and so the government had to step in to do something about that.

But let's consider what insurance is for a moment. Is for-profit, market-based healthcare insurance the boot-strapping, rugged capitalistic industry conservatives love and admire? Or are private insurers involved in one of the most socialistic enterprises in the homeland today?

First, insurers pay claims of sick people by using the money they collected from not-sick people. Not-so-sick people who pay for insurance are subsidizing those who are sick. Think of it as a sick Ponzi scheme. Or a Ponzi scheme for the sick. You decide.

Fire insurance works the same way. Homeowners paying home insurance to protect them should a fire destroy their home are mostly paying to subsidize the handful of home owners who will see their homes totally destroyed by fire. Fire insurance is the ultimate one-for-all, all-for-one socialistic enterprise. Everyone pays, yet only those who experience tragic circumstances are reimbursed and made whole by insurers.

Insurance is not like purchasing ice cream, clothing,  building products or whatever.....when you pay your insurance premium you are usually paying for others to be made whole should they encounter tragedy. That is the very definition of socialism. The many paying for the few.

Now, it is absolutely true that you or I may experience tragedy and need to be made whole again by insurance......but if everyone who paid for fire insurance, for example, saw their homes destroyed by could not possibly make all policy holders whole. Not without being bailed out by, say, the government.

In essence, that is what happened to AIG.....the mammoth seller of credit-default swaps. AIG sold insurance to large investors in mortgage derivatives, and when those derivatives blew up in a frenzy of uncontrollable fear and greed, AIG could not possibly make whole all of it's "policy holders." Big Government had to step in to save those "policy holders"......the penultimate example of private industry socializing their losses.

When it comes down to for-profit healthcare insurance the dynamic is similar. Huge for-profit insurers gather up monthly policy payments from sick customers as well as non-so-sick customers. The policy payments from all customers make up a healthcare insurer's "pool" from which the healthcare bills of sick people are paid. In effect, not-so-sick customers are subsidizing the payments of delivered healthcare to sick customers.

I won't go into the co-pays, the deductibles, or the yearly limits private health insurers come up with to minimize their exposure to even sick people....let alone the frustrating nature of customers being dicked around by having to worry about which "network" their doctor, hospital, clinic, or specialist is in. That stuff is like bad-icing on top of a for-profit, socialized cake. A socialized cake which all customers pay to make yet only some customers get to "eat."

Faced with the passage of Obamacare, conservatives and Teas recoiled in a fit of rage allegedly because Obama and the Democrats were turning healthcare insurance into Big Socialism. Which is humorous....because healthcare insurance, like all insurance, is socialistic by nature. The many pay so that the few know, like food stamps or aid to dependent children.

Because insurance is a socialistic enterprise, the most intelligent and efficient way to insure all people would be to have one giant "pool"......not a thousand little ones. Since insurance is already a socialistic enterprise where the many pay for the few.......the bigger the "many" group is, the more economical the insurance policy becomes. Spreading risk wider translates to lower costs for all.

So, when you hear.....and who can avoid it.....conservatives, Republicans and Teas complaining about Big Government takeovers of one-sixth of the economy and declaring that they don't want any more socialism.......simply smile at their total lack of self-awareness.

Insurance is socialism in it's natural "market" state.

The only question left then is: When it comes to healthcare insurance, what is more important to a nation of citizens who risk losing everything if they get sick? Socialized, limited "pool", private insurers who continually construct complicated and frustrating plans full of legalese...all for the sake of a few.......or socialized, biggest "pool", healthcare insurance which would be less expensive and still protect all Americans against risk equally?

Which form of socialism would you prefer?



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