What should we call a business where people pay for something called "health insurance premiums" only to learn that when they need it they are not covered by insurance? What exactly were they paying for?
Most people agree that spiralling medical costs threaten to ruin individuals, and hurt the nation's economy. According to a recent AMA study, medical bankruptcies have far outstripped inflation since 2001:
● 62.1% of all bankruptcies have a medical cause.
● Most medical debtors were well educated and middle class; three quarters had health insurance.
● The share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007.
We face a serious health and economic crisis in the U.S., but we can't find common language to talk about it. Why not? One reason is a very slippery use of words.
Debate sure is a whole lot harder when words mean nothing.
A combination of verbal sleight-of-hand and willful blindness threatens our last real chance of getting out of this national health crisis before it takes the country under. Here we thought we've been talking about "health reform" when our opponents, who like things just fine the way they are*, are just putting a shiny new package around an ugly business. I count at least three reasons why they've been able to do this so far.
*even if this means turning the country into a third world nation and sending Americans into bankruptcy
1. The Insurance Industry Is Neither.
What private companies sell as "health insurance" is misleading, in the sense that it doesn't reliably insure and it doesn't actually produce.
Here are the terms' literal definitions (from the freedictionary.com):
Insurance.
in·sur·ance (n-shrns)
n.
- a. The act, business, or system of insuring. b. The state of being insured. c. A means of being insured.
- a. Coverage by a contract binding a party to indemnify another against specified loss in return for premiums paid. b. The sum or rate for which such a contract insures something. c. The periodic premium paid for this coverage.
Industry.
in·dus·try (nd-str)
n. pl. in·dus·tries
- Commercial production and sale of goods.
- A specific branch of manufacture and trade: the textile industry. See Synonyms at business.
- The sector of an economy made up of manufacturing enterprises: government regulation of industry.
- Industrial management.
- Energetic devotion to a task or an endeavor; diligence: demonstrated great intelligence and industry as a prosecutor.
Historically, insurance grew out of mutual benefit associations, organizations people created to protect one another against risk. Later, they became publicly traded to keep the companies economically viable.
But at some point, insurance companies stopped calling their work "services" and switched instead to "products." At a time when industrial production was on the decline, creating these "products" filled a national void. But it didn't make people healthier.
You can now buy a host of insurance "products," for which you pay a monthly or yearly premium, that give you the illusion of safety from calamatous health crises in your life, but really fail to "insure."
Personally, I think we need a new word for this: I propose that we call it "UN-surance."
Which brings me to my next point.
2. The Health Insurance Industry Has Morphed Into a "Wealth Extraction Industry."
Instead of the misnomer of the "health insurance industry," or even the admittedly clumsy "UN-surance," I submit that a more appropriate name would be "wealth extraction industry." The product, in this case, is a device (a "contract," if you will) whose primary function is to separate people from their money.
History provides many examples of such an industry. Here are a few relevant definitions:
Bunco: "a swindle in which you cheat at gambling or persuade a person to buy worthless property" (Worldnetweb);
Confidence Trick: "A confidence trick or confidence game (also known as a bunko, con, flim flam, gaffle, grift, hustle, scam, scheme, or swindle) is an attempt to defraud a person or group by gaining their confidence" (Wikipedia)
Con Game: "1. A swindle in which the mark, or victim, is defrauded after his or her trust has been won." (Wiktionary)
Somewhere between the victim-blaming "a fool and his money are soon parted" and the reality-adverse "go be a grown up and buy some [junk] insurance," maybe a little common ground could be found in the notion of consumer protection. You know, these things:
•Consumer protection laws are designed to ensure fair competition and the free flow of truthful information in the marketplace. (Wikipedia)
Worth considering, anyway.
3. The "Health" UN-surance Industry Behaves Like a Giant Cartel.
By definition, a cartel is
"a combination of independent commercial or industrial enterprises designed to limit competition or fix prices."
In the U.S. we call them "trusts,"
("a combination of firms or corporations formed by a legal agreement; especially : one that reduces or threatens to reduce competition"). (Both from Merriam-Webster online).
"Trust" is a benign word, which may explain why people aren’t more outraged about them. Cartel, though, the word used throughout Europe and the former Commonwealth nations, has only one contemporary meaning, and captures the calculating impulse that motivates participating companies: profit. The health industry has qualities that resemble both a vertical and horizontal trust or cartel.
A "vertical cartel" is an agreement that allows a single economic entity to control all levels of production, from raw materials to retailing of products.
In the health "industry," this translates to a single entity controlling everything from insurance policies to drug coverage to medical supplies to pharmaceuticals to hospitals and their staffs. Such an entity would set price rates for equipment it makes and markets, costs of drugs it produces, and hospital fees it reimburses. In the end, it would be paying itself, at rates it sets, for services it provides--all with your money.
Does this sound at all familiar?
A "horizontal trust" is an agreement among putative "competitors" to fix prices and eliminate real competition.
In the health "industry," this translates to a group of insurance companies agreeing on premiums, making real competition (without a public option that is not motivated by profit) impossible. More simply, they might just agree to act in concert to prevent healthy competition. They just might, for example, band together to block a "public option" to private "wealth extraction" plans.
Words only go so far, I know. But I'm tired of hearing how we need to protect the "insurance industry" (even if it means that every single other industry in the country will fail), and I'm tired of hearing how private companies are offering something even remotely similar to what we think of when we say the word "insurance."
Let's get our terms straight, and then we can talk.