The Idea Of Seniors Shopping For Health Insurance Is Insane
If you have ever had to purchase individual health insurance you know exactly how insane Paul Ryan’s senior health insurance vouchers are. If you haven’t then you might want to read a post I wrote in November 2008.
Fact: Individual health insurance is only cost competitive if you’re young and healthy, because health insurance has nothing to do with health care and everything to do with risk assessment.
So… which insurance companies are going to insure our older citizens? Perhaps they’ll simply take them – and their vouchers – for a year, then raise their rates and watch as seniors drop out. Frankly, I’m having trouble seeing them take them at all. Seriously, why would a business based solely on assessing risk take on the riskiest demographic in this country? It’s bad business, and one of the driving forces as to why Medicare came into existence.
Which brings us back to Paul Ryan’s plan for future seniors and what it really means to everyone. Via Gooznews in a post entitled “Attention Future Seniors: Republican Plan A 100% Estate Tax”
So here’s the real argument young and middle-aged people need to hear, and the real reason why the “more skin in the game” argument can never work for seniors or other vulnerable populations, including them when they reach that age. Seniors and the poor account for over half of health care spending. Within those groups, 5 percent of the population accounts for 50 percent of health care costs; and 20 percent of the population accounts for about 80 percent. These costs come for the most part at times when economic incentives have no influence at all on medical decision-making: in medical crises; in treating chronic conditions; and, for most Medicare patients, in the last six months of life.
That’s why a voucher program for Medicare, which will shift an increasing share of those inevitable costs onto the elderly themselves, can fairly be categorized as a 100 percent estate tax or death tax. People under 55 need to know that if the plan crafted by Rep. Paul Ryan were passed, most of them will never have a cent to leave to their children. It will all go to the health care industry to support the American way of dying.
In the end, the Republican plan is a death/estate tax. It is a plan that will bankrupt the majority of Americans and lays waste to the GOP cries over their freedom loving right to be able to leave their hard earned dollars to their children. In many cases, children will be trying to help their parents make up the difference between the voucher and the actual cost of care, which, in turn, will leave them less prepared for their own golden years. In many other cases, no one will be able to help the senior, which has led me to start calling the Republican plan the Bring Out Your Dead! plan. (h/t Monty Python)
Tags: Health Care, Health Insurance, Paul Ryan, Republicans
If you have ever had to purchase individual health insurance you know exactly how insane Paul Ryan’s senior health insurance vouchers are.
Remember the banking heyday when you would get two or three credit card offers in the mail every day, most of them fraudulent teasers?
That’s what Paul Ryan’s health care plan would look like. It would be a gold rush to sell junk insurance to every vulnerable person in America.
Hey, maybe they can combine the scams:
“Tap Unused Equity In Your Home For Health Security! Hurry, Offer Expiring Soon!!”
An old maxim in the insurance biz is that “you can’t insure a burning building”. When it comes to medical insurance, seniors (as a group, on average) are on fire. The only way that you can insure a burning building is to charge them the full replacement cost of the building plus a percent for administration and profit.
Insurance companies fear the creation of a “rate spiral”, a situation where rates go up to cover claims to the extent that those at lower risk levels (in medical insurance terms: the relatively healthy) leave the plan and only the highest risks (the sick) remain on the plan, causing the rates to spiral higher and higher out of control. No well-run insurance company will stay in this business for very long and the entire system will, inevitably, collapse.
this is precisely why insurance companies cant exist as a for-profit entity and still actually insure people. They will ALWAYS loose money by providing people with the means to stay healthy and alive and they will NEVER make the choice to loose money.
Insurance only works as a for-profit company if there is a large pool of people who each have a simular chance of incuring claims for illness or accident. The healthy people pay the claims for the sick/hurt people and the insurance company coordinates the whole process. If there are only healthy people, they will leave because they don’t need the insurance. If its only sick people, they won’t see any savings so it won’t make any sense for them to stay.
“you can’t insure a burning building”
You don’t insure burning buildings; you just put out the fire.
For houses on fire, the most appropriate remedy is the publicly funded fire company, not a private insurance company.
That is why health care should be paid directly as single-payer, not with a patchwork of insurance scams.
you’re right FMD…. unfortunately for the insurance company business model, there is no way that can be counted on to work.
Here’s an idea: why not do away with insurance (and government subsidies for insurance companies) and let the service providers vie for our business directly? We have lots of choices when it comes to hospitals, doctors, lab tests, and I certainly don’t mind paying fair rates directly to my doctors. I’d rather get vouchers to pay for medical services on the open market than to pay for insurance. (Which might just bring us back to single payer.)
Anyway, just an idea.