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May 2012
“Health Insurance” vs. “Health Care”
By John Paul Galles

     When you purchase auto insurance, you don’t expect it to cover every ding or dent that happens in the parking lot at work or on a shopping trip. As a matter of fact, you carefully consider reporting minor damage to your insurance company for fear of subsequent premium increases. Your car insurance is there for an unfortunate accident or damage that is beyond your reach.

     Likewise, when you buy homeowner’s insurance, you don’t expect it to cover normal and customary repairs that are required every year. In fact, you make repairs and handle the upkeep as your own responsibility. Your homeowner’s insurance is there in case of damage that is beyond your capacity to afford.

     Similarly, life insurance. When you buy life insurance, it doesn’t cover anything that’s going to happen in your lifetime. It covers one thing—your death. Upon that catastrophic event, it pays.

     “Health insurance?” That perplexes me. We seem to expect this type of insurance to cover doctors’ charges for diagnosing every bump, bruise, ache, infection, flu, or other malady that affects our bodies—and even regular checkups. Not only that, we seem to expect it to cover every blood test, x-ray, CT scan, or other expense involved—even prescription drugs.

     In part, we think this because our employers pay for health coverage and we don’t have to be concerned with the actual costs or administration. In part, we think this because we figure we’ve paid for it in our premiums. And, at the same time, we realize how absurd it is to think these things.

     It is no wonder that our health care system is broken. Advances in technology, methods of treatment and medicines, and the increasing life expectancy of our predominantly aged population, have exacerbated the problem. At the same time, we have not restricted access to health care in any way other than making it “less available” or accepting a lower standard of care. All this plus increasing costs plus a stagnant economy! Whew!!

     Even if you have the health and money to buy “health insurance,” there is no guarantee your routine health care costs will be covered, let alone a catastrophic situation. Those who don’t participate in “health insurance” only pay for what they need as they need it. And if they have a health catastrophe, their costs will be paid for or subsidized by everyone else. It makes no sense. In fact, it is nonsense.

     In 2009, the U.S. spent $2.5 trillion on health care for the 310 million of us. That’s approximately $673 per person per month. In a pro rata system, a family of four would pay $2,692 per month ($32,304 per year) for our present level of health care.

     Are you paying that? I don’t think there are many of us who can afford that premium.

     What may have seemed like “health insurance” when it was first provided as an employee benefit in the 1940s, has in fact become “health care” nowadays. It is our “system” of providing it that has not changed with the times.

     As we wait for the Supreme Court to rule on compelling everyone to join the system and we listen to the debate from our presidential candidates, we need to pay close attention to whether proposed changes really acknowledge the difference between “health insurance” and “health care.”

     We cannot afford Medicare as it exists. Medicaid does not sufficiently support those who cannot afford health insurance. We know that more than 60 percent of all bankruptcy filings are related to medical bills and that almost 80 percent of those filers are or were insured.

     Here is reality: There are not many who support privatization of health care who also believe that only the wealthy deserve coverage. Correspondingly, there are not many who support universalization of health care who can afford premiums of $2,692 a month.

     Both sides are seeking a solution and that solution is somewhere between “insurance” which applies to catastrophes and “care” which provides all the drugs, medicine and services that we expect to consume over a lifetime.

     We can only afford what we can afford; we cannot provide all services to all people. We have to manage our “health care” system so that we can provide maximum level of health care to the maximum of number of people. And we should relegate “health insurance” to care beyond that point.

John Paul Galles is the publisher of Greater Charlotte Biz.
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