Healtcare in America

Chuckle, because that's all you can really do when you listen to talking heads or politicians explain how the government will finally fix healthcare in America. Chuckle as you begin to see that they haven't got a clue.

When you express your doubts, they come back with something as inane as "do you want to give up your social security? Huh, do you?" Or, "do you want to do without your Medicare? Huh, do you?" Such is the level of discourse amoung our politicians and their flackes.

Anyone with a high school education can figure out that social security, medicare, and some kind of proposed healthcare system, all have one thing in common: they're forms of insurance. But, they are very, very different kinds of insurance with very different insurance problems.

Social security is the easiest kind of insurance. It's an annuity. You pay in so much until you reach a set age. Then you get an annuity. That's it. So why, if it's so simple, isn't it handled by private companies? Good question, but one with an equally simple answer. Early in their lives most people don't see the need to put away for their golden years. Then when they hit those golden years, they suddenly discover they have nothing to live on.

The government decided to do something about that. They decided to do what no private insurer could do. They decided to reach into our pockets and extract the premiums needed to pay for our future annuity. Paternalism? Sure. But, most of us now agree that it was a good thing.

Medicare, and healthcare insurance in general, is a far more complicated matter. Social security is essentially based on actuarial information as to when we are going to die. When it was first set up, most people died at 65. If you died before that, you got nothing. What you had paid into social security went to the annuities of those who outlived you.

With medical insurance, things are a lot more complicated. First, costs vary all over the lot. And, those costs can come at any time, although most do hit people in their last years. Cost control? Forget about it. It's a good idea, but Congress doesn't have the vaguest idea as to how to achieve it.

One fascinating point: Healthcare in some places in our 50 states is 50% less expensive than in other places. (You can check this fact in studies done by the Dartmouth School of Medicine.) But, what's really amazing is that the outcomes in the less expensive locations are not only equal to the more expensive places; they're generally better. One more thing to consider: the suckers in low-cost places like Rochester, MN, and Salt Lake City, UT are actually subsidizing Medicare for New Yorkers. But they don't mind. They get better care.

There is something else; namely, how we live does factor into our health costs. Eat too much, drink too much, smoke a pack a day, and develop a taste for recreational drugs and the care you will come to require will skyrocket. I hate to sound like an ogre, but why should I pay for the diabetes treatment of people addicted to cheeseburgers, or people who loose their livers to liquor, or who develop goodness knows how many illnesses from smoking? Is Congress giving any thought as to how to protect my standard of living from these idiots? I doubt it.

All insurance businesses can run into rough patches. The problem Congress faced with social security was that people were living longer. That cost the government's insurance business big time. But the solution wasn't that hard to find. Make people work beyond age 65, give them a small annuity, or make them pay a higher premium. In the end, they decided to make them work a bit longer. Congress, being Congress, diddled about this a long time before they came to the obvious conclusion. But Congress can afford to diddle. If the problem gets serious, they can simply print more money. Let's see a private insurer do that.

Healthcare is different. Here costs are entirely out of control. Private insurers are against the wall. You can try to squeeze the pharmaceutical companies, but there's only so much that can be squeezed. Put in a federal insurer and the private insurers will be out of business. Congress claims they don't want to do that. They want competition. Really? For a vibrant economy, economists claim the best thing is free trade. But with health insurance, the companies can't even cross state lines. (Is there some kind of special Mann Act for health care insurers?)

You don't need a crystal ball to see how this will end, if a federal health plan is instituted. And, it won't be government's insurance business that will fail. They have a time-tested safety device. It's called the printing press.