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ObamaCare ignores basic concept of insurance PDF Print E-mail

Letter to the Editor:

In response to the Jan. 8 Robert Reich column, “Health law deserves time.”

Robert Reich says that the Affordable Care Act deserves time before we can pass judgment on it. He admits that only 35% of those questioned in a CNN poll support the law.

Turns out it is not affordable because it ignores the basic concept of insurance. That rationale is to provide coverage for a large, unexpected loss. Homeowners insurance is a good example. You purchase this by using your own money to pay premiums. The deductible tends to be large.

You essentially self-insure for most things that can go wrong with a house. You pay the cost for fixing things and doing preventive maintenance on furnaces and other appliances. If a house burns down, the owner pays the deductible and the insurance company pays the balance of the funds needed to rebuild.

If we want more things covered in any insurance policy, the premiums must be higher. This is the way insurance works. Collectively, all policyholders must pay more into a plan — partly to cover administrative costs — than they take out in the way of benefits.

This means that some individuals will pay much more in premiums than they take out from the insurance company in the way of covered claims, whereas others will have greater losses covered by the company than what they have paid in premiums. Therefore we face either higher deductibles or higher premiums if we want health insurance to cover more and more items and services.

Do we want “free” preventive care, vaccinations and birth control? Fine. Just raise everyone’s premium. But please, fans of Obama, be truthful and don’t call these things free.

We need a less cumbersome system of health insurance that is paid for by individuals, not by employers or the government. Health insurance should generally be the high-deductible type. To that end, health savings accounts represent a good system to combine with catastrophic policies.

For the poor, the government can pay the premiums for one of these insurance plans, incorporating low deductibles for these people so that they have some skin in the game.

We have an expensive health-care system for several reasons. First, we are an addicted society. Not just to drugs, tobacco and alcohol, but also to eating. Two-thirds of the population is overweight and there are 30 diseases connected to obesity.

Family breakdown, especially in minority communities, leads to a higher incidence of poverty, crime, addictions and other problems that increase the demand for medical care.

Our legal system needs tort reform. The United States has 6% of the world’s population, but most of the world’s lawyers. Frivolous lawsuits lead to higher premiums doctors pay for malpractice insurance, and we order more tests and procedures as a way to practice defensive medicine.

We can rein in excessive costs in health care. But all of us need to understand the economics involved. Insurance does not make something free. In spite of all the hype from the Obama administration, 62% of Americans are smart enough to understand that the Affordable Care Act will not lessen the cost of health care.

Warren Anderson, M.D.

Conover

Tuesday, January 14, 2014 12:27 PM
 

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