IMovedOn.org

While people may have lots of views on the advisability of establishing some kind of Government-supplied, taxpayer funded universal health insurance – the debate itself leaves a lot to be desired.  Most of the mis-information and confusion comes from the lack of understanding of what "insurance" is.

In short, health insurance is a "pooled asset" that is used to pay for things in one very narrow case only – when you are sick.  To understand this sentence, let’s take an example.

If you had several billion dollars, would you need medical insurance?  Probably not…. you could pay for any care you needed "out of pocket"… your finances wouldn’t show even a blip under almost any circumstance – no matter how much care you needed.  This condition is sometimes referred to as "self insured".

The (sad) fact is that most of us don’t have billions of dollars – so we "pool" our assets as well as our risk into a bigger group so that statistically, in the off chance that we need to spend lots of money to restore our health we can appear to be worth billions in only this one aspect of our life.  The "pool" is a pool of assets – (our money) and a pool of our risk (the chance that some of us will get sick) so that we can be eligible to get service "in the off chance event" of our illness.

This is the way all "insurances" work – people pool their money so that they are eligible to "look rich" in in a single type of circumstance.  For example, "homeowner’s insurance" allows us to "look rich" in the single event of where our home is destroyed – we can rebuild it.  How many of us could rebuild our home in the off chance that it burned down – with insurance we can.

There are many areas where government asks us to "pool our assets" by taxing us.  The most obvious area is in defense – where we "pool our assets" to fund an army to defend our country…the primary and most ancient obligation of government.

Not many would argue that pooling our assets for defense doesn’t make sense…so how is health insurance different from pooling our assets for defense?

The answer:  the fact that you are defended from foreign attack does not diminish me in any way.  Even if you don’t pay into the "defense pool"…I don’t have to pay "extra" for you to be defended.  The fact that you are defended is essentially a free by-product

Pooled health insurance only makes sense if everyone is contributing the same for the same level of insurance.  Otherwise I am diminished by the fact that you are in my pool  and you didn’t pay anything and are getting the same benefit that I’m getting.

Being able to get health care is quite valuable – and it costs lots of money.  There may be ways of making the care cheaper…but giving it away to those who can’t afford it dimishes me (at a minimum, by taking more of my taxes and worse by potentially limiting my access to care) – and this is a cost that I get absolutely no benefit from.

If you claim that it is my "responsibility" as a fellow human being to care for the less fortunate – this argument I can understand and in fact is a the only valid argument.  But then it is quite a major move to force me to accept a responsibility that I didn’t have before, especially when taking this responsibility puts my family at risk either by excessive tax burdens or by reduced access to health care.  This is probably where all the "backlash" to the idea of universal coverage comes from – it threatens me, it threatens my family.

But in the end, if each of us as individuals accept it upon ourselves to help our fellow human being – it is definately a courageous and laudable act…but we should call it by what it is and not confuse matters.  This is not "insurance" … it goes by another name:  "charity".