When the Only Tool You Have is a Hammer Every Problem Looks like a Nail

When the Only Tool You Have is a Hammer Every Problem Looks like a Nail

In yesterday’s post I mentioned that government was far too involved in your health care. I said they were more deeply involved than you could ever know. Believe me I have studied health insurance in earnest for nearly six years and after that much time I have yet to figure out how much of the crap that is written into a health insurance policy comes from the government and regulation and how much comes from the health insurance company trying to get around an existing regulation or the threat of a future regulation.

Insurance should be self-policing and the free market should be the first layer of consumer protection after the court system. If an insurance company fails to pay a simple claim the consumer should have the right to sue them. But understand that insurance companies have a vested interest in running clean business and that interest is the continuation of existing policies and the writing of new policies. Any company that makes a contract to deliver on payment for a claim that does not come through with that payment should first have to answer to other insurers and secondly should have the consequence of free market regulation in the form of a lack of sales for non-payment of claims.

But unfortunately what has evolved is s series of cat and mouse games between the government and the insurers. It goes like this: The insurance company writes a new health plan. In that plan things like costs for hospitalization and emergency room visits are paid. The office of the insurance commissioner now receives complaints from a few diabetics that cost of insulin is not covered in that plan. The next year the government – read legislature – writes a law that all insurers must now cover the cost of diabetes medications. So the insurers do that. And because the cost for covering those supplies will raise the costs for the insurance companies, the costs of premiums rise. So the next year the office of the insurance commissioner gets complaints that the costs of the premiums are too high so the legislature gets involved and demands lower premiums, so the insurance company has to institute a level of protection for them in the form of a claims department that looks over claims and disallows the payment of certain costs. SO NOW THE NEXT YEAR the office of the insurance commissioner get complaints from consumers that claims are denied which again kicks in the legislature which now goes back to the insurance company and makes laws about claims so the insurance company then goes to doctors and hospitals and asks them to accept less money for procedures. It is a viscous circle.

What has happened in our health care system is that when we demand more it costs more. When we complain to the government, the legislature has only one tool and that is the hammer of making a law. Laws do not enhance commerce they are meant to restrict commerce, but the government – our elected officials - have one tool and they use it with impunity.

In the movie Minority Report, Tom Cruise plays a police officer assigned with arresting people before they commit a crime. The legislature instead of allowing for free commerce and simply funding enforcement – as the constitution demands – plays the roll of “precog” and makes more laws creating more of a boondoggle for insurers to walk through. The thinking by lawmakers seems to be “Well they found a way to work around that last law so let’s try to figure out how they will wiggle around these laws and then write that into the next set of regulations.

In the meantime insurers (true for all businesses really) have to try to stay one step ahead of the legislature by adapting to the current legal landscape by working within that framework to do what they do, AND still make a profit AND do it legally. The problem seems to come when there is a complaint in the form of, “There oughtta be a law!” That is the mating call of the politician. If someone somewhere has a problem – real or imagined – that they can get to a legislator the lawmaker process begins. What should happen is that single business should be taken to court for the alleged infraction to see if there was a law broken. But it doesn’t end there.

Sometimes people make mistakes. That does not mean that an entire industry should be saddled with regulations to right that single wrong. The answer is to properly enforce the laws on the books, not to make new ones.

But remember that legislators have one tool and that is law creation. When citizens present problems that get to them that becomes their nail and the only thing they can do is get out their hammer.

The REAL answer is that we all need to do or best to live moral, honorable and decent lives. Take personal responsibility in our living choices to maintain our health and be fiscally responsible. When the fault is yours take responsibility for that and make changes. This too applies to businesses. The founders of the constitution debated at great length about our ability to self-govern. Many of the founders of the constitution believed quite openly that we could not. In order for our country to work as it was designed and as it has worked for over 200 years is that we as a people must be a moral people guided by divine law. Without that as our guide we get what we deserve, and that is a form of government very unlike what has created this greatest country ever.

SOLUTIONS:

I suggest that insurance companies make health insurance pure insurance. Get rid of networks, restrictions and exclusions. Design a policy that simply pays you if the insured is hospitalized. Because the average hospitalization is somewhere less than $30,000.00 set up a simple policy that will cover an individual for that amount. Don’t set a limit on the number of policies that an individual can buy.

Make the language simple. State what you as an insurer will pay once the patient enters the hospital and stick to it.

Don’t pay for doctor visits. A $200.00 visit to the doctor does not belong in a pure insurance policy.

As a consumer, pick the number of $30,000.00 policies you want to have and pay your premiums. As your age increases you will probably want to get more. Realize that once you have filed a claim it will be more expensive and maybe even impossible to get more insurance. If you use that amount up in a hospital visit then that policy is gone and you need to buy another.

And last but not least leave the regulatory folks out of it. Legislators set up penalties for violations for non-payment of claims and fraud and let the courts settle those.

Can anyone hear me? Am I making sense?