We're Living in a Society

So the subject of healthcare has been on my mind a bit as of late, due in part to arguments I have had and a particularly arrogant debater from the Wall Street Journal spouting off on a radio show.  In addition, the topic of government spending has come up quite a bit in this discussion, and I feel a need to get a few things out there that seem to be flying under the radar.  For one, this snide journalist who also made assertions that colleges don't offer meaningful education (mental footnote for a later discussion), stated that we don't have the money to be spending on healthcare, and that it was a fallacy to say that having more young people in Medicare would help with its cost issues.  I'll shelf the latter right now and go straight for this, "we don't have the money," argument, my question is where were all these conservatives during the Bush years?  Oh dear god in heaven, medicaid is broke, that absolutely proves that government-run programs can't work successfully, right?  Not when you intentionally run them at a deficit.  That's one thing that never ceases to enrage me, is these conservatives will talk until they're blue in the face about fiscal responsibility, then turn around and act in the most fiscally irresponsible manner in order to acquire political capital.  We didn't have the money for Medicare Part D back then, everyone knew that, and yet Bush and the Republican Congress passed that, "socialist," spending increase.  Better than just that, they passed it at a time when they were paying for two wars AND cutting taxes.  Now suddenly we try to spend money on something that isn't politically motivated and that actually helps the health of our citizens and we don't have the money?  But we still have money for war, we still have money for the type of government-run medicine that garners votes.

Speaking of which, you hear many Republican congressmen coming out in support of the Tea Party, saying they don't believe in government spending, but is anyone paying attention to what they're doing behind the scenes?  There was a lot of rhetoric being circulated among right wing circles during the debate around healthcare about transparency, or the purported lack thereof on the Democratic side, but are they keeping track of what their own camp is doing?  While Obama and the Democrats proposed cuts in Medicare and Medicaid (that's right, socialist Obama proposing cuts to government-run medicine), the conservative side fought against those cuts.  Aren't these the same people crusading against government-run medicine?  Don't they hate all forms of government spending short of military?  The answer is simple, they don't have the guts to go to senior citizens and make their grand, hyperbolic speeches about conservative ideology.  They have no problem going to young voters, first-time voters, voters who rarely use the healthcare system and making these sensationalistic claims about government spending, but put them in front of a crowd of seniors and government-run healthcare is the best thing in the world.  And why?  Because it garners them votes.

This brings me to my next point, which I will preface with a discussion of economics.  Tea Partyers, conservatives, libertarians, whatever you want to call them, always claim that their ideology is based on simple economics.  It's common sense, it's right there for everyone to observe.  Why, then, do they continue to ignore certain basic economic rules that don't fit in with their ideology?  This journalist, and I use the term lightly (yet another mental footnote concerning later discussion), claimed that the assertion that having a younger contingent in Medicare would help to bring down costs was faulty.  Faulty, how is that?  Let's go through the basic operation of the insurance industry.  Insurance is mutual risk, that is a group of people pay into a fund knowing they may not see a return on that money, but when they do need a costly item such as medical care an individual will see a return.  Let's go even simpler for this, insurance is a gamble.  Think of the insurance companies as the house and the consumers as the players.  Whom  the  odds favor is dependent on whom we are talking about.  If we take an example of a twenty year old the odds favor the house, he will pay for the insurance and use it probably only for checkups, and perhaps less than that.  All the money he pays winds up as a profit for the insurance company.  Now let's say his father, fifty or sixty, has insurance under the same provider, the odds favor him.  He's going to use his insurance more and for more costly procedures, the insurance company stands to lose money on him.

This is where we get to the reason why this journalist's logic is simply wrong.  Insurance providers are casinos that make money on younger patients and lose it on older patients.  Medicare is insurance targeted towards the elderly; this means a lot of operations, a lot of visits to the doctor, and in general more costs.  An operation running almost exclusively on providing care to those 65 and older is simply not sustainable.  Medicare cannot run at a profit without young people paying money that they will likely not recover, and if there are young people paying into Medicare it will result in increased profits.

This is also the reason we need the government mandate for all consumers.  I have heard arguments against this measure in principle, but not in practicality.  The fact is that getting rid of industry policies of bumping policy holders with pre-existing conditions or those who become more of a liability as they get older was necessary.  This was the game the insurance industry was playing, and why I think health insurance simply cannot remain for-profit.  Executives were playing a game, they were treating the industry as a market and not as a necessity for individuals.  Take the example of the father and the child, if the money they make on the child outweighs the money they lose on the father they're still running at a profit.  One would think that would be good enough, but not so.  The attitude the industry took was one of maximizing profits, whatever the cost, and is part of an unsustainable attitude towards capitalism (mental footnote for later examination).  It's not enough that they make a profit, if there's money they could be making, or saving, they treat that as a loss.  Together the father can child represent a net profit, but if they bump the father that's increased profit for them.  This is the detrimental attitude I am speaking of, not being content with just making a profit but maximizing profits, even if it comes at the expense of certain consumers.  Furthermore, this completely defeats the purpose of insurance, there is no risk because as soon as there is a risk the individual is bumped.  That really is a scam, that's saying to the young people that when you're young we'll take your money because it nets us a profit, but when you're old we're going to bump you because we'll actually have to pay you.  That is, frankly, outright robbery.  And I know there is a sentiment among younger people of not wanting to pay in the first place?  Why pay money for something you're not going to use?  Well, in the words of George Costanza, "because we're living in a society here!"  This is a perfect example of co-dependence, of the type of communal thought that benefits individuals.  Yes, you pay more money than you use when you're young, but when you're old you just might see a return on that money, if you don't get bumped that is.

Which is, again, why the individual mandate was required, to get the number which ranges between fifteen and thirty million Americans who are young and uninsured to buy insurance, to drive up profits for insurance companies, to make it more feasible for them to keep the customers who net them a loss in the form of payouts.  I still hold that executive salaries are extreme in the industry, that going to a non-profit format would cut down on overhead in this regard and net a lower price for the consumer (isn't that what free market theory states, that the market should provide the best product for the lowest price?), and that there are other issues such as the overabundance of overpriced and sometimes inferior drugs and medical techniques when talking about Medicare costs.  The issue still remains, though, that this is all basic economics, why can't these supposed masters of economics realize these simple economic tenets?