A Monster Called Health Insurance...

Publisher’s Note:  Given that she is a trusted, regular contributor, I normally don’t offer a foreword to an article by Sybele Capezzutti; and I’m only writing this one as a sort of caveat.  This is a tad longer than her normal articles, and with good reason.

Sybele did a lot of homework and found out some things that a lot of people don’t know and probably wouldn’t take the time to find out about.  This is an excellent, readable, and very informative piece and I trust you’ll agree after reading.

So stop what you’re doing, pour a splash of your favorite adult beverage, and spend the next few minutes learning how the government and combined medical industries essentially did to modern medicine what Henry Ford did to the fledgling automotive industry of his day.   

Sybele Capezzutti:  Let’s talk Health Insurance..!

In 1850, the first U.S. insurance firm was founded.  It offered insurance against injuries received during an accident.  Hospital and medical expense insurance wasn’t introduced until the 1920’s; instead, individual hospitals (and in 1929, employers) offered pre-paid plans to help cover the cost of medical expenses. Employer (or union) sponsored health insurance became commonplace after World War II when it was offered as a benefit to compensate for limited wages, or as a recruiting tool in job categories with high demand and limited supply.

President Truman began throwing around the idea of a government sponsored health plan during this post-war period, however it wasn’t until 1965 that Lyndon Johnson signed Medicare and Medicaid into law.  In the 1970s, changes in the law allowed managed care through HMOs (Health Maintenance Organizations).

But how exactly did the idea of health insurance come about..? I was curious so of course I had to research..! 

Americans did not spend much in healthcare in the early 1900’s.  Women had their babies at home, people ate healthier, and when they got old and sick they didn’t try to extend their lives.  Cancer wasn’t even a household name like today.

Before the birth of modern medicine, hospitals were poor houses where the indigent went to die.  Then came the discovery of effective medicines, especially antibiotics, along with a revolution in medical schools.

Suddenly, says economic historian Melissa Thomasson, "Hospitals are marketing themselves as places to have babies."

Health care became much more effective, and much more expensive.  Clean hospitals, educated doctors and real pharmacological research cost money.  People proved willing to pay for care when they were really sick, but it wasn't yet common to go for checkups or survivable illnesses.

By the late 1920s, hospitals noticed most of their beds were going empty every night and they wanted to get people who weren't deathly ill to start coming in.

An official at Baylor University Hospital in Dallas noticed that Americans, on average, were spending more on cosmetics than on medical care.  "We spend a dollar or so at a time for cosmetics and do not notice the high cost," he said, and continued, "The ribbon-counter clerk can pay 50 cents, 75 cents or $1 a month, yet it would take about 20 years to set aside (money for) a large hospital bill."

Then Baylor hospital started looking for a way to get regular folks in Dallas to pay for health care the same way they paid for lipstick — a tiny bit each month.  Hospital officials started small, offering a deal to a group of public school teachers in Dallas.  They offered a plan for the teachers to pay 50 cents each month in exchange for Baylor picking up the tab on hospital visits.

When the Great Depression hit, almost every hospital in the country saw its patient load disappear. The Baylor idea became hugely popular and it eventually got a name: Blue Cross.

Blue Cross eventually expanded through the entire Country, and then WWII happened.

"The war economy is an entirely different ballgame," Thomasson says. The government rationed goods even as factories ramped up production and needed to attract workers.  Factory owners needed a way to lure employees.  She explains that the owners turned to fringe benefits, offering more and more generous health plans.

Like any other business, healthcare cost grew with demand and now they didn’t have to lure customers anymore; the customers were begging for service.

Healthcare today is a 3 Trillion dollar industry, the fifth largest industry in the US.

Clearly, there is no interest in shrinking it, and an industry this powerful has the ability to decide exactly what your healthcare future will be, mainly when the law makers are not at all affected by its exorbitant prices and receive the best of care.

It is important to note that health care and the pharmaceutical industry go hand and hand and they feed off each other.  So how much is the pharmaceutical industry worth..?  Over 50 Billion dollars are spent annually on pharmaceuticals in the US.

Interestingly enough is that even though the amount spent on pharmaceuticals is much lower than the amount spent on healthcare, pharmaceuticals is one of the most important contributors to healthcare’s exorbitant cost.  Lobbyists pay our law makers so competition is not allowed in our faux free market so they can control their pricing; the definition of crony capitalism.

Another big contributor that no one ever talks about is our legal system.  Law suits are so common and profitable that the entire medical industry (doctors, labs, hospitals) have to spend small fortunes in liability insurance and attorney’s services just to stay in business, and that cost is passed on to you, the consumer. Some of those law suits wouldn’t exist if the pharmaceutical industry did not control our elected officials and the FDA, money talks and harmful medication walks..!

I know, this is getting too long..!  Let’s get to the Affordable Care Act, which by mandate forces everyone in the Country to buy health insurance or pay a fine.

Some will argue that the ACA has some redeeming qualities such as the elimination of pre-existing conditions and affordability for the lower income bracket, but at what cost..?  And were there better ways to solve the ever increasing health care costs..?

The reason I took the time to first go over how health insurance was created was so we could all ask ourselves a very important question…do we really need to use hospitals and doctors as much as we do..?

Are we making ourselves sick by not living a healthy life because we know we can always count on a pill to fix it..? 

While you think about that let’s see if the ACA solved the main problem – health care cost and accessibility.

Cost:  Health insurance today costs about 30% more than it did before the ACA was created as a result of eliminating the pre-existing condition, it is only affordable for the ones who qualify for subsidies or would be on Medicaid to begin with. 

In 2008, the average employer sponsored family plan cost a total of $12,680, with employees footing $3,354 of the bill, according to Kaiser Data.  By 2016, the cost of the average employer family plan was up to $18,142 for the year, with workers picking up $5,277 of the tab.  Deductibles also increased considerably, some as high as $10,000.

That’s around a 50% increase..!  Have your pay rates also increased by 50%..?  What about the company you work for; has it increased its revenue by 50%..?  If the answer to the first question is no, then you have less money for food, clothes and entertainment now than you had before. .If the answer to the second is also no, then the company will be looking into workforce reduction; thus, an anemic economic recovery.

Accessibility:  Most of the ACA enrollees would have qualified for Medicaid through their State; the ACA just gave them access to a federalized system, but unfortunately also reduced the Federal contribution to the States, meaning that some people fell into a gap where they neither qualify for State or Federal Assistance.

They are uninsured today.  Oh…but the “evil” rich people are now paying more; the sweet taste of revenge..! Well, that really didn’t hurt them at all, but you know who really got hurt..?  The ones who were not poor enough for Medicaid or rich enough to not care..!

Entrepreneurs in particular..! They had to curb their daring spirits and get a job that offered health insurance instead of starting the new Apple in their garage because they can’t afford to pay for insurance or the penalty. Again, reflecting on the economy.

So, after billions of dollars spent by the Federal Government we still have people who are uninsured, people who can’t afford to pay for Insulin, people who can’t afford to pay for their Chemo treatment and thousands of GoFundMe pages asking for help to pay for their medical treatment.

The undeniable truth is that the ACA’s main goal was not to provide health insurance affordably.  It was created and put together by lobbyists for the hospitals and pharmaceutical industry exactly the same way the first health insurance was created….and with only one purpose in mind: to make sure they, not you, profited from it.

What better guarantee that you will pay for it than a government mandate that is enforced by the IRS..?

So what is the solution..?

Certainly not the bill introduced by the Republicans this week..! It does nothing to fix the rising costs of healthcare, but that’s another article, one I will work on once we see how they and President Trump will react to our displeasure with the plan they’ve presented.

Unfortunately, we’ are so conditioned to the idea of having health insurance that our choices are limited at this point.  Most people would rather take a pill to “fix” their ailment than live a healthier life, delivering a baby at home is not even a passing thought anymore and our diets lack the proper nutrition to prevent simple diseases.

We have forgotten what it is like to have a family doctor that you pay cash for, a doctor that knows you, your parents, your kids, your entire medical history, and can take care of you better than the ER doctor after putting you through 25 different exams because he is so afraid of a law suit that he won’t even touch you.

 

But we can at least try to free ourselves from the chains of the greedy pharmaceutical industry disguised as government controlled healthcare by demanding the return to true capitalism instead of cronyism and make the monsters fight against each other for our business instead of handing it on a silver platter through a government mandate.