Posts Tagged ‘insurance’

In Part 1 of this series, I wrote about the role of the banking industry in our government and how, via the lobbying industry, they were able to influence our government to create or remove laws regarding the banking industry.  You might call it a buyout of our government.  One of the rather unique features of the banking business is that it doesn’t create a tangible product, like washing machines or automobiles.  It just loans money to you and then its meter starts running, and you have to pay back the money plus an additional amount – and that additional amount can be enormous.  For example, if you take out a $100,000 mortgage on a house at 5% interest for 30 years, by the time you have paid back the bank you will have paid $193,255, almost twice the purchase price of the house. If you have the misfortune of having an adjustable rate mortgage you might find your total repayment to be a lot more. Which is one of the reasons we are now in a worldwide recession.

There is another financial industry that is a close cousin to the banking industry.  It also produces no tangible product, but unlike the banking industry, where if all goes well you eventually wind up owning your own house, in this other financial industry, if all goes well you wind up with no return on your investment at all, i.e. you get nothing.  I am, of course, talking about the insurance industry.  Little more than legalized gambling on the probability of personal disasters, the insurance industry is one of the big money-making businesses in our country, and if we care to recall the activities of AIG and credit default swaps, it is also one of the leading causes of the worldwide recession too.

Like the banks, the insurance industry is in the business of taking more money in than it gives out.  Today we have insurance for life, health, accidents, fire, hurricanes, you name it.  You can get insurance for just about anything.  If you are an average American you will never collect as much money in claims as you pay in premiums.  It has to be that way, otherwise the insurance companies would lose money – and that isn’t going to happen.  Like the state lottery, your chances of winning when you buy insurance are small – and the insurance companies want to make your chances ever smaller.

Which brings us to the topic of health insurance.  Until Barack Obama became president the insurance companies were pretty content with their system of health insurance, i.e. don’t insure high risk people and set the cost of insurance high enough so that even when the expected number of people have legitimate claims there will still be enough money left over for a fat profit.

Enter President Obama.  Without waiting to hear the details of his plans for health care reform the insurance companies began their anti-reform campaign.  Why? Were they worried that the American consumer would be hurt by reform?  Were they concerned that it wouldn’t be fair to some citizens?  Were they worried that some people might be left out?  Were they worried that our medical system would be inundated with millions of new patients when everyone had insurance and therefore the quality of healthcare would deteriorate? No.  They were worried about losing money, that’s all.  They had a good thing going by only selling insurance to people who would probably never use it.  That last thing they want to do is to sell insurance to someone who is going to run up a big medical bill.  So, they had to take action.

The health insurance, and entire health care industry, began a massive spending campaign on lobbying Congress – much larger than their usual massive campaigns. In the first quarter of 2009 this group of businesses spent over $35, 000,000 lobbying members of Congress. Ummm, let’s see now… there are 100 Senators and 435 Representatives…so 35 million divided by 535 is, uh, $65,420.56 per person.  Not bad. Of course that’s just in the first quarter too.  Who knows what the total amount will be by the time the voting is done.  And, naturally, the money is not spread around evenly.  You can bet there is strategy involved. There are certain key Senators and Congressmen whose votes might make the difference.  It’s a great system we have. If you own a business, you send your money in to Congress and then you tell them how to vote so that your business makes a fat profit. The fact that by so voting a Congressman might actually harm rather than help his/her constituents is just not part of the equation for many members of Congress.

The direct link from wealthy owners of major companies to our government representatives via lobbyists is well known.  The remarkable thing is that the American people do not seem to be very upset about our system.  Of course, when things don’t turn out good in the end the people always vote out the bad Congressmen and even Presidents, but these people are just replaced by a new and eager crop of recruits, eager to participate in the same process – i.e. pocketing money from lobbyists. We have the best government that money can buy.

That of course is the problem.  It is the wealthy who have the money to spend in this way, and it is the wealthy who hire the lobbyists, and it is the wealthy who then tell our elected representatives how to vote.  In Part 1 of this series I showed how this invisible hand of the wealthy directly led to the failure of our banking system and the worldwide economic meltdown. Now we have the same process occurring in one part of our insurance industry – namely the health insurance industry – and the result could well be as catastrophic, because if health insurance reform doesn’t happen the cost of insurance will continue to escalate while the insurance companies continue to find reasons to disqualify treatment for certain diseases, even for people who have paid their premiums.  This is what the insurance companies want – maximum profits and minimum losses.  Our government should be protecting us from these vultures, but how can that happen when the elected members of our government are receiving millions and millions of dollars from them?

The invisible hand of the wealthy isn’t really all that invisible, but it is very powerful because it pervades the entire economy and budget of the country.  We have already seen how the banking and the insurance industry exerts its control over our government.  However, the wealthy are involved in other industries too.  We’ll look at that in Part 3 of this series.

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What would Voltaire say?  Here we are facing the prospect of trying to cope with a catastrophic pandemic flu in a few months and we don’t have enough vaccine for everyone.  Meanwhile, our government, through the department of Homeland Security and it’s countless subdivisions, has made plans for the distribution of what vaccine we might have.  Meanwhile, our government is debating the merits of providing medical care via the commercial insurance industry or through some sort of “public” insurance program – the latter funded by taxes, which will not be raised , except on those people on whom they will be raised.  Meanwhile, the government assures us that they have taken the “govern” out of government and they will not dictate what medical care we will receive via the public or private insurance programs.

Meanwhile, the Centers for Disease Control has published its “recommendations” for determining who will be allowed to receive flu shots before the pandemic sweeps over us. First of all, if you are over 64 years old you can forget it.  You aren’t getting a pandemic flu shot.  The good news is that you will get the shot for the “seasonal” flu – that’s the one that was expected to come around anyway. But the pandemic? You’ll have to take your chances because a cousin of this flu was around about fifty or sixty years ago and you probably, or could have been, or might have been exposed then. Therefore you might, perhaps, maybe still have some sort of antibodies to the half-century old cousin of the pandemic flu. So, bottom line: you’re out –  unless, by some miracle there is some vaccine left over, in which case feel free to help yourself.

So, here we are.  Sort of like being on the deck of the Titanic, knowing that our rudder is way too small, and we have nowhere to hide.  Our government, the one that has promised it won’t meddle in our health care choices has already determined the order in which the lifeboats will be filled, regardless of whether you have expensive private insurance or not.  So much for the Republican Party argument that private health insurance will keep us free of our government making our health decisions for us.

Speaking of health insurance, here is the way I look at it: Let’s suppose a bunch of people get together and decide to pool a bunch of money in a big pot – just in case one of them gets sick and they need a doctor.  The money in the pot will be used to pay the medical bills for this unlucky person. Of course someone needs to take care of the pot, so we ask Fred to do that, and Fred says he will – if he can have 25% of the money in the pot. We say OK.  That’s private health insurance.

On the other hand let’s suppose we all put some of our money in the pot and then we elect someone to watch the pot and handle the disbursements.  It turns out we elect Charlie and we tell him that he can’t have any of the money in the pot, but we’ll pay him a salary of $10 a month.  That’s a government insurance plan – where the money in the pot comes from taxes instead of insurance premiums.  So which one is a better way to go? The first way is good old American Capitalism (with a capital C, which rhymes with P which…).  The second is European Socialism. Which do you think is cheaper?  Which has more money in the pot available for your health care? Which one will get you better health care?  Actually, the record speaks for itself.  People live longer in socialist-health-care Europe because they simply have better health care. Same thing with Japan – you can’t beat their welfare state health care. It’s that simple.

We are not going to have that.

Because the Blue Dogs and the Republicans like Tom better than Charlie we’ll be putting our money in Tom’s pot and then getting 3/4 of our money back for our health care needs.  Even so, this private health care system will still be apparently be under the watchful eye and control of our government (as in the aforementioned “recommendation” for the CDC).  So,  even though we’ll have a completely private system (except, of course, for the VA system that is government run and is clearly the best health care system in the U.S.), people who don’t know you at all (like the people who work at Homeland Security or the CDC), or care about you personally will be making your health care decisions for you when it comes to things like pandemics, despite what you thought was going to happen when you bought that expensive private health insurance.

I guess it’s like Candide said: we need to  cultivate our gardens.  Frankly, I thought knee deep would have been enough.

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