Mark B. Baer, Esq.

Empathy and Relationships

Trumpcare: When Is Health Insurance Not Really Insurance?

Insurance is to spread the risk among all insureds, not to create billionaires.

Posted May 06, 2017

On May 4, 2017, the Republican-controlled House of Representatives joyfully passed the American Health Care Act, also known as Trumpcare, and did so largely along party lines. In so doing, it "started the process of repealing the Affordable Care Act, Obamacare."

"Lawmakers and President Trump celebrated the vote Thursday, saying it will make health care better for everybody. But the American Health Care Act, as the bill is named, is also expected to leave millions of people without coverage. That fact seemed to be overlooked in the frenzy over last-minute changes to the legislation that would weaken Obamacare's protections for those with pre-existing conditions.

Some 24 million fewer people would have insurance in 2026 than under Obamacare, according to a Congressional Budget Office analysis of an early version of the bill. The legislation has changed a bit since then, with many experts predicting that the revised score will show even more would be affected.

A total of 52 million people would be uninsured in 2026, compared with 28 million if Obamacare were to continue, according to the CBO report, which was released in March....

The Republican plan ... would make coverage unaffordable in a variety of ways.

The legislation would also allow insurers to charge higher premiums in the individual market to those in their 50s and early 60s, while reducing rates for younger Americans. And it would overhaul the way the federal government helps people pay for coverage -- providing tax credits to those higher on the income scale, but making them less generous for many lower-income enrollees and for older consumers than Obamacare's subsidies.

The Republican bill has left insurance industry groups and consumer advocates concerned about the massive increase in the number of uninsured Americans."

Whether we are talking about Obamacare, Trumpcare, or any other such legislation, the issue involves health care insurance. As such, it is essential to understand the purpose of insurance.

"What is the main purpose of insurance? To provide mechanism to spread risk, to share the losses of the few among many."

If that's the main purpose of insurance, someone needs to explain why insurance companies typically make enormous profits.

In 2016, "health insurance industry raked in billions while blaming Obamacare for losses.... Major insurance companies are enjoying record profits but claim they are losing money under the Affordable Care Act."

Sixteen of the world's billionaires have wealth linked to insurance. Of course, this doesn't include the multi-millionaires who haven't yet made it into the billionaires club, assuming they ever do.

How is this possible unless something is amiss, considering the purpose of insurance?

Insurance companies accomplish this in a great many ways, some of which are as follows:

  • Deny insurance to high risk individuals. For example, it's very difficult to obtain homeowner's insurance when your home is in a very high fire zone area. For medical insurance, it may be that they deny coverage to those individuals who have risk factors such as a family history, lifestyle choices (such as smoking and not exercising), and pre-existing conditions.
  • Homogeneous risk pooling, meaning pooling those with similar qualities or dispositions that impact the likelihood of incurring a financial loss and charging the members of the different pooling groups different rates, based upon the level of risk for the insurance company involved.
  • Denying legitimate claims.
  • Delaying payout of legitimate claims, so that the insurance company can continue profiting from its investment of those funds.
  • Excluding things from coverage.
  • Increasing premiums, co-pays, and deductibles, while nickel and diming their insureds and the service providers when claims are made.

Considering the main purpose of insurance, for insurance companies to do such things in order to create immense profits for the companies, their executives, and their owners is incredibly offensive. This is particularly true when we are talking about people's access to healthcare, which impacts their quality of life, as well as their lives themselves.

As flawed as it may have been, Obamacare was designed to effectuate the main purpose of insurance.

One such flaw often ignored is the fact that most of the 23 original health care exchanges created under the law have failed and several others "are believed to be on shaky financial ground."

In addition to the billions of dollars in federal funds given to states in order to establish the state health insurance exchanges as part of Obamacare, in 2015, the federal government gave approximately $41 billion in subsidies for the Affordable Care Act’s health insurance exchanges.

What the public hasn't heard much about is that forensic accountants are currently involved in litigation stemming from the failed health care exchanges. A friend of mine is one of those forensic accountants. When we spoke recently, he told me about the level of disgust he felt with regard to the immense amount of money that was lost due to incompetence, including the involvement of unqualified individuals in the creation and management of those exchanges. In case you are wondering how and why unqualified individuals were involved in such matters, it has to do with the nature of politics and crony capitalism. 

Unfortunately, crony capitalism is rampant in our government, which is a major reason why such a large segment of our population is fed up with our government and the manner in which it operates.

Of course, the fact that major insurance companies have enjoyed record profits under Obamacare only makes matters worse.

However, rather than problem-solving to correct Obamacare's flaws, the Republicans in the House of Representatives passed Trumpcare, which would allow insurance companies, their executives, and their owners to make even greater profits.

Everything about Trumpcare runs contrary to the main purpose of insurance.

Now, it's true that many Republicans believe that the government should get out of the healthcare business, among many other things.

What such a belief fails to consider is that "healthy citizens boost national wealth."

The following is an excerpt from an article by Daniel J. DeNoon that was published by WebMD on November 9, 2006:

"European Commission Report Shows Investment in Health Can Help Economy

The best economic investment a nation can make is to invest in the health of its citizens, a European Commission report concludes.

Most studies of the link between health and wealth look at poor countries, note World Health Organization economist Marc Suhrcke and colleagues. Yet rich nations owe much of their wealth to previous health gains."

Along those same lines, in 2008, George P. Schultz and John B. Shoven published a book titled Putting Our House in Order: A Guide to Social Security and Health Care Reform, in which they stated, "the U.S. economy is only as healthy as its citizens."

Shortly after the September 11, 2001 terrorist attack, President George W. Bush published Securing the Homeland Strengthening the Nation, which stated as follows:

"The Government of the United States has no more important mission than fighting terrorism overseas and securing the homeland from future terrorist attacks. This effort will involve major new programs and significant reforms by the Federal government....

We will renovate our inadequate public safety systems – most importantly public health – and will enhance America’s emergency management system."

Public health and national security: The critical role of increased federal support states in part:

"A strong public health infrastructure is important not only to safeguarding and improving the public’s health but also to the nation’s security. Therefore, the federal government must work with states and localities to ensure these capabilities. State and local governments must shoulder their fair share of financial obligations for these functions, but it will require an enhanced and prolonged strategy for America to regain and maintain the capacity necessary to respond to today’s increased bioterrorist threats. Moreover, if we achieve the level of preparedness necessary to respond to these challenges, we will simultaneously strengthen our public health system’s ability to combat naturally occurring infectious disease outbreaks and other public health threats and emergencies."

While the Heritage Foundation, a conservative think tank, contends that public health is a matter of "'social' security, not national security," it acknowledges that "yes, the U.S. could choose to do things to help improve the health of its citizens.... As for the social implications, whether individuals have health insurance is vital to their lives, but that is a matter for them and their insurance agents or program administrators at the Department of Health and Human Services."

Interestingly enough, people who are able to afford better health care seek out and use health care services, thereby preventing the spread of disease, in addition to being healthier. 

In fact, the United States has historically invested in the healthcare infrustructure of developing nations because diseases spread from country to country.

Consider the following excerpt from Development Derailed: How to Put U.S. Foreign Aid Policy on a Better Track:

"Although the United States boasts a developed healthcare system and has largely eradicated dangerous diseases on its own soil, many dangerous diseases such as Ebola and even the Measles exist in other parts of the world. In an increasingly globalized world, health problems from one country can quickly cross borders and enter the United States. Foreign aid is a tool that can remedy this threat to the United States by contributing to the eradication of diseases and spread of pandemics worldwide by investing in the healthcare infrastructure of developing nations."

Yet, the GOP is hell bent on "gutting our public health system":

"Good health is required to keep a strong work force and a public health system is vital to national security. Providing basic care is cheap and saves a lot of money in the long run. By gutting public health, we are exposing our country to multiple risks....

There are plenty of examples where a strong public health system can decrease illness and the subsequent cost. The GOP is intent on cutting all discretionary expenditures and public health to them is a discretionary item. Unfortunately, their attack on public health is a prime example of being penny wise and pound foolish." 

There is no question that our healthcare system, even under Obamacare, was seriously flawed.

In Universal Health Care in the US, published in 1999, Lora Cicconi and Kerri Strug stated:

"Compared to other Western countries, the United States spends more per capita on health care than any other nation. In 1990, national expenditures for health care were more than 40 percent more than in Canada, whose spending was second highest. Despite the enormous expense of health care in the United States, the general standards of health, such as life expectancy and infant mortality, are not as high as those in countries which spend less. Costs are enormous, yet Americans do not fare better, and often fare worse, than citizens in countries which spend substantially less on health care."

In case you thought things had improved over the years, please note that the United States was not included among "the 16 countries with the world's best healthcare systems", a list which was published earlier this year.

"The Legatum Institute, a London-based research institute released its 10th annual global Prosperity Index in November, a huge survey that ranks the most prosperous countries in the world.

The organization compares 104 variables to come up with its list, splitting those variables into nine subindexes. One of the big components of the ranking is how healthy a country's people are.

Health is measured by three key components by the Legatum Institute: a country's basic mental and physical health, health infrastructure, and the availability of preventative care.

Perhaps unsurprisingly, the countries that have the best scores in the Prosperity Index, and therefore rank as the world's healthiest, are generally big, developed economies with large amounts of resources."

For what it's worth, both Germany and Canada were included on that list. "Canadians and Germans have longer life expectancies and lower infant mortality rates than do US residents. [Yet,] the United States stands out as the country with the highest expenditures on health care."

As Cicconi and Strug explained back in 1999, 

"Currently, the U.S. has a health care system based on insurance coverage….

Insurance not tied to employment is often very expensive, and the uninsured individuals cannot afford to pay for it. They still receive health care, however, and costs are still incurred. The resulting uncompensated health care bills are paid for by every sector of society.

Without insurance people are much less likely to go to a doctor if they suspect they may be ill as they know they will have to pay the full price for a visit, often something the uninsured cannot afford. As a result, medical problems may escalate, with the patient only going to the hospital when they are seriously ill and require immediate and expensive treatment. The major problem is that there is no real incentive to see a doctor until one is so sick that it becomes necessary. Preventative care is basically nonexistent for the uninsured, and illnesses which could perhaps have been easily prevented instead become serious and more difficult to treat, not to mention more expensive….

The U.S. clearly needs to take a look at the facts and figures of itself and other countries and ask itself what must be done to improve the health status of its citizens and decrease costs. American citizens seem almost blindly opposed to universal coverage as it runs against the individualistic values of the country. However, if they look at the successes of both Britain and Canada, and even Germany with its employer mandated program, they would realize that the health status of the country could greatly increase without costs running out of control. There is clearly something wrong with a system that spends almost 40% more of its GDP than the next highest spending country (Canada), yet consistently falls behind three or four other countries in the health of its citizens."

It sounds as though our societal biases, beliefs, assumptions, expectations and values are interfering with rational thought. 

In fact, as Cicconi and Strug said, 

"In contrast to Western Europe and Canada, the U.S has a long history of anti-government attitudes. The suspicion about 'big' government and its tax on individual liberties is a pervasive American value. The U.S. has a less egalitarian and unified view of citizenship than most countries. The U.S. has values based on individuality and social heterogeneity, while in Western Europe and Canada the understandings of citizenship are based on solidarity and universal rights to a certain standard of living. There is a general aversion among Americans to any sort of universal entitlements, whether it be health care or income supplements-they are often viewed as handouts or gifts that people then take advantage of."

The "pervasive American value [of] individual liberties" is a politically correct way of saying that we value selfishness. However, it doesn't take a rocket scientist to figure out that selfishness is inconsistent with empathy toward others and collaboration. In the absence of empathy toward others, it is impossible to develop a deep understanding of a situation because you aren't considering all perspectives and information. How do you effectively solve a problem under such circumstances?

I concluded my article The Power of Empathy as follows:

"If a mediator, a judge, a politician, a scientist, or anyone else for that matter, has a limited worldview as a result of their personal background and life experiences, how does that impact their assumptions and ultimately the decisions they make both personally and professionally? Unless a person has become more empathic by being a member of a minority group that is discriminated against, what personal relationships shaped their learning process? In a diverse society, how do limited or otherwise sheltered worldviews affect the level of civility and commitment to fairness?"

Interestingly enough, last year, Dr. Lynne Reeder, Director of Australia21, “a not-for-profit public think tank specializing in promoting new evidence-based thinking about the big issues confronting Australia in a rapidly changing global environment” conducted a pilot study testing the effectiveness of empathy conversations as a policy-making instrument.

The study states as follows:

In today’s global and uncertain world, it could be argued that policy challenges require an ability to become more aware and sensitive to the suffering of others. For that to happen, empathy and compassion need to be intentionally included and rewarded in policy and decision making settings. However, moving towards suffering requires a high level of emotional intelligence and an ability to better understand how our thoughts influence our capacity to connect with others.”

The study queried, “Why is it beneficial to demonstrate that empathy conversations could provide another resource for policy makers?"

I am proud to state that the conclusion I reached in my article The Power of Empathy was used to answer that question, which was phrased in the study as follows:

We posit that they are worthwhile considering because using empathy conversations as a considered policy tool will deliver direct access to a range of diverse lived experiences to those in policy making positions; and that in turn provides enhanced information on which to base fully considered decisions. It is not surprising that our limited worldviews, based on our particular life experiences, inform our expectations and assumptions. If those in policy positions have not been a member of a discriminated or minority group, and mostly they are not, then what personal relationships have shaped their life processes? Consequently empathy conversations may provide one way of cultivating the awareness and understanding of the lived-experiences of individuals in financial difficulty, by those developing welfare policy who have not directly experienced poverty or austerity themselves.”

Yet, 13 Republican men will be creating the Senate's health care bill. 

According to social science researcher Brene' Brown, empathy is a skill set, the core of which is perspective taking. Perspective taking is normally taught or modeled by parents. The more your perspective is in line with the dominant culture, the less you were probably taught about perspective taking. In the United States, the majority culture is white, Judeo-Christian, middle class, educated, and straight.

It doesn't seem like a very diverse group. In fact, almost all membes of the Republican's health care group are members of the dominant culture.

What could possibly go wrong?

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