Why you should hate insurance companies

Is the for-profit insurance industry a “predator” that “prevent[s] us from having a decent health care system”?  Letter writer Bruce Robinson says so (Daily Camera, December 1). He’s partially right. The real predators are politicians who inhibit needed health policy reform.  But insurers are guilty for concealing how they benefit from Congress’s predatory practices, which shield them from competition and accountability to patients.

Predators gain value by using force or threats of force. Politicians prey upon patients who prefer to finance their own medical care in “politically incorrect” ways. As a result, insurers need not compete for your business. Politicians punch you with a tax penalty for buying insurance directly from an insurer instead of through your employer. They prohibit you from buying affordable policies available in other states. They tax you more for paying cash for routine medical expenses rather than buying an expensive health plan with tax-deductible premiums.

Like a true predator, politicians support legislation that backs you into a corner — where as the patient, you are the consumer but not the customer. Hence, neither insurers nor doctors aim to please you. They cater to who pays them. Employers pay the insurers and insurers pay the doctors.

So don’t condemn for-profit insurance.  The profits are “anemic,” reports the AP.  Condemn insurers for supporting an un-free market, where profit is disconnected from pleasing consumers. Only in a free market insurers’ profits would depend on satisfying you, the patient, rather than satisfying employers and politicians.

The above was published in the Daily Camera (Boulder, CO) on December 5, 2009.

I should thank Ari Armstrong for this observation that influenced this article:

In a free market, profit means that customers happily pay for some good or service. It is only outside of that market context that profit is bad. For example, a Mafia boss might “profit” by killing people, or a politician might “profit” by doing favors for special interests.

Also, the title of a recent article by Jacob Sullum’s is an excellent phrase that we should become a meme: The Consumer Is Not the Customer.  It’s a great distinction, as we often use “consumer” and “customer” interchangeably.

See also “Down with the health insurers,” by Tim Carney (author of the just released book Obamanomics)and my blog post from a couple days earlier, How insurance companies can gain credibility


1 Comment

Filed under public policy, published

One response to “Why you should hate insurance companies

  1. A much wiser idea is to take a long hard look at the entire health insurance industry and then work to remedy the situation by taking out the waste and creating new, innovative ideas that would be a benefit for all.

    Thank you for sharing this post.

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