Friday, October 31, 2008

Obama Doesn't Understand Insurance

This was written by my brilliant husband, State Farm FSR extraordinaire! Really clears up the insurance issue.

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I should have gone on about this earlier, but I didn’t feel it necessary, or really, I just didn’t want to take the time. I wish I would have before because I could have pointed out many of Obama’s misunderstandings and explained things to you better. However, one issue recently mentioned again is more than enough.

Obama says he wants his healthcare plan to cover pre-existing conditions. Even if everything else he wants to do was a viable option – which it’s not – this one thing would cause so many problems it would totally disrupt the entire industry on its own. Aside from that, healthcare companies wouldn’t cover them on their own so it’d take a government takeover. This would trigger more problems than I could list if that happened.

However:

Getting coverage for pre-existing conditions sounds great. If you have some major sickness, you would want your carrier to pay for your care because they would have had to pay if you had coverage before you were diagnosed with your illness, right? Great idea….you may think…

Covering pre-existing conditions is an impossibility with insurance! Let me point out that health insurance companies will cover you for things you already have like high blood pressure or minor arthritis, maybe asthma, but not for something like cancer or diabetes, or any other major disease that can result in major treatment needs coming up. You will pay an additional rate if you have high blood pressure because you are a higher risk, just like people who have tickets or accidents in their driving history will pay more for car insurance.

Now you may say at this point, “Insurance companies are being greedy, they can’t do that. They can’t cover me for one thing and not for another.”

Let me give you an example with something you are probably more familiar with: your car insurance. Obviously, you know you have to have car insurance to have coverage when you have an accident. Say you don’t want to pay for the insurance (like 33% of drivers here in Oklahoma) so you don’t buy it. You are then involved in an accident where you are at fault. Just call up the insurance company and pay your first month, they’ll cover it, right? No, that would be called a pre-existing condition. You’ve already wrecked your car, they are not going to pay for that or the other person you hit. It just can’t happen. They would go out of business; it’s unethical to get a service for which you have not paid. You should have had insurance before you got in the accident.

Apply this same principle to health insurance. If you’re sick with something before you get insurance, they can’t give you new coverage. You should have already had health insurance. Even if you had to quit your job because of health, you have something called COBRA already available where you can keep your insurance for 18 months after you have quit working, regardless. Also, you can get in a state insurance pool that does not exclude anyone for anything.

No insurance company can reasonably cover pre-existing conditions. If the insurance company said they would do this, no one would get car insurance and then the rate all the good drivers would pay would be so astronomical it would be unaffordable, more than it already is. Insurance is about spreading risk. The insurance company has people (actuaries) who do lots of math all day and estimate out how many people are going to have accidents on average and they set premiums accordingly. People trying to get coverage for something that cannot be estimated would drive the industry into the ground. It’s not greedy to make money, it’s how business has to work. The insurance industry employees thousands of people and they have to earn a living just like every other industry. Did you know that Wal-Mart makes a profit? So does the movie theater, the restaurant….everyone does. They would go broke if they covered pre-existing conditions. No one would pay for insurance until they needed it. The companies would get stuck with major bills for major health conditions and would not be able to pay the claims of people who really paid for the service.

Insurance is designed as a transfer of risk system. You get it when you don’t need it to pay out when you do need it. You can’t buy life insurance when you just found out you have cancer and only 3 months to live. It doesn’t work that way. It goes back to welfare, wanting something for nothing. Society can’t function that way. Insurance definitely can’t function that way. They can’t pay for the guy who wasn’t responsible and didn’t take care of his insurance and let the guy who is responsible stuck with the bill.

Hope this makes sense. Bottom line, let competition rule the health insurance industry. Competition is what has driven this country forward and we are on the verge of letting it all go.

Don’t let that happen. Vote for freedom, vote to keep our Republic strong.

1 comment:

bc said...

That's a great read, but I'm not convinced that B.O. and a liberal congress would have any hesitation to require insurance companies mandating that they cover pre-existing conditions. If they bankrupt all health insurance companies, it would only get them closer to their dream of a socialized, federalized health system. Ethical, economic, and legal problems don't prevent liberals from their agenda.