Is Health Insurance Socialism?

[HydrogenBond]

The American Healthcare system is based on capitalism. But if one looks at how insurance works, it uses a socialist approach. In other words, everyone is required to pool their money (roughly similar amounts for similar services) irregardless of one's use of the health care system. In a free capitialist system, one should only pay for what they consume. Those who who consume more resources should pay more. But in the insurance commune the healthy are required to suppliment the unhealthy.

 

For example, consider the commodity, orange juice. If I only drink one gallon every two weeks and someone else drinks one gallon per day, we are both required to pay for 7.5 gallons every two weeks. This is not free market capitalism but socialism. The socialism approach increases the incentive to drink more orange juice, to get your money's worth, causing the price we pay for OJ to increase faster than inflation.

 

In the social insurance situation, working hard to be healthy is not rewarded by the commune. One's hard efforts are put into the commune pool, where those who are slack with their health will recieved more than their efforts would dictate in a capitalist situation. The result is the harder worker to be healthy losing incentive and gradually getting lazy with health, lowering the amount of healthy output, causing the commune's resources to get scarce or prices to rise.

 

Maybe insurance premiums should be broken down into their capitalists and socialists components to reflect the free market price and the supplimental socialist cost/benefit. If one is in the black with respect to the socialist benefit they are given the choice to contribute to the commune's health charity or not.

[HydrogenBond]

Consider if the insurance industry was require to go capitalists instead of socialist. The healthy would get lower capitalists premiums but may still contribute to the commune pool, but less than before. Those who are used to consuming extra resources beyond the free market nature of captialism, would have to cut back toward the free market level. This would create an excess of medical goods and services, causing the price to drop for everyone. It comes down to demand side insurance capitalism driving prices down. Supply-side insurance socialism causes the prices to increase.

[HydrogenBond]

I am not trying to be cold blooded with respect to healthcare. We are at a crossroads for healthcare with the debate centered around the pro's and con's of free market versus socialized medicine. The current situation is already a compromise between the two because of socialist insurance. I still think demand side economics is the answer. The government needs to help set up, but not administer, buying groups for its citizens. The result will be lower prices for the same level of goods and service, since the buying groups can negociate for direct purchases at wholesale prices. The supply side will need to get more efficient to meet profit projections as the price drops. What will be left will be cheaper and more efficient health care.

[Buffy]

... But if one looks at how insurance works, it uses a socialist approach. In other words, everyone is required to pool their money (roughly similar amounts for similar services) irregardless of one's use of the health care system.

 

In the social insurance situation, working hard to be healthy is not rewarded by the commune. One's hard efforts are put into the commune pool, where those who are slack with their health will recieved more than their efforts would dictate in a capitalist situation.

Have you tried to obtain insurance lately? If you have anything wrong with you at all, you may not be able to get insurance at any price except through government supported "high-risk" insurance pools. Even if you can get it, you may be slapped with a long list of pre-existing condition exemptions that basically say if you have a chronic condition and it causes problems, the insurance company won't pay for it.

 

This situation has been getting much worse as companies force their workers to become contractors who do not get company health plans, and of course the growth in smaller employers who are exempt from requirements to provide health plans are both resulting in huge increases in the numbers of people who must obtain their own insurance and are at the mercy of these insurers who basically charge individuals twice what group health plans charge once you figure in all the exclusions mentioned above. As a result, record numbers of people are going without insurance, which means when they get sick, we *all* pay for it (just like shoplifting).

 

I find it hard to call this sort of behavior on the part of insurance companies, "socialist." Its the ultimate in capitalism.

 

You might want to study the situation in more detail: Just from a macroeconomic view, the main thing you're missing is that that "glass of orange juice" is only something you need every 5-10 years at most, and when you need it, it will cost you 2 years salary. That's the kind of expenditure that insurance is built for, capitalist or socialist.

 

Actuarially speaking,

Buffy

[eric l]

From what has been posted here so far, I get the impression it is mainly about the American situation relating to Health Insurance. From a European point of view, the American Health Insurance is almost non-existing !!!

And if, to Americans, European Health Insurance is Socialism, then I'm a socialist and proud of it !

The whole idea about Health Insurance is mutual help; by comparison insurance by privately owned companies is not much more than instituionalized gambling : if there is any risk that your job or your environment or your age is more liable to making the company pay, you'll have to pay more.

It's a bit like with democracy : the idea of one man (or woman) - one vote does not garantee that our leaders always make the best decissions; but all other systems that have been tested in the course of history turned out even worse.

[Pyrotex]

The American Healthcare system is based on capitalism. ...For example, consider the commodity, orange juice. If I only drink one gallon every two weeks and someone else drinks one gallon per day, we are both required to pay for 7.5 gallons every two weeks. This is not free market capitalism but socialism. ....

Your example of an explanatory model is way off base. Totally bogus.

 

Let's fix it. People only drink orange juice when they suffer from Vitamin C Deficiency (VCD); otherwise they don't drink it at all. An attack of VCD can kill you or lead to permanent disability. Only 10% of the population ever comes down with VCD. A gallon of orange juice costs $50,000.

 

Now, THIS is a realistic and useful model.

 

Unfortunately, 90% of people who come down with VCD cannot afford a gallon of orange juice, and become disabled or deceased. This means that in each generation, 9% of the population gets disabled or dead from VCD and only 1% gets VCD and recovers (because they have the $).

 

Another fix: nobody tells anybody what to do about this. However, the general population (say 51%) vote to instigate an "insurance" program. Everybody pays $100 a year for 50 years. Total: $5,000. Out of this pool of money, everybody who gets VCD now gets their gallon of orange juice. And nobody has to worry and fret that they or their family members will suddenly die from VCD, or become disabled (which would cost the family $10,000 a year in care).

 

So, what's wrong with this arrangement? And that's all it is -- an arrangement. A social contract. We do the same thing with police and fire services. You pay for protection whether you ever need it or not. You benefit from a lessening of worry and concern, which frees you up for your personal "pursuit of happiness".

 

This isn't "socialism". What it is, is sound business management.

[jackson33]

mandated, required and government control are socialistic symbols.

 

the US insurance programs are all voluntary, un-mandated and there is no government involved. even the group policies a company or organization provides are optional. if you are on social security, a government program, you are liable for Medicare payment or insurance. even here you can opt out, but lose the SS benefits.

 

age and pre-existing conditions, occupation do require additional premiums.

an 80 yo skydiver, with a heart condition is not likely to get insurance in the public sector. however under the government program, SS/Medicare, he/she is eligible (if had worked 10 years and so on) and pay the same rate as the

60 yo grandma that knits.

 

every person in the US, is provided medical service via any emergency room in the country. this has a combination of reasons, but primarily a mandate of government.

 

the US is a mix of Capitalist and Socialistic ideas. the notion of some in politics to Nationalize will not cure the built in problems created, which boils down to government control. those on Medicate and Medicare are limited to who or what type doctor they may see, the doctors and hospitals are limited to time spent, quality and methods they can use. the idea of a National System is to centralize these controls and eliminate any ones personal preference for quality.

[Michaelangelica]

Why are Americans(USA) so frightened by the word "socialism"?

[InfiniteNow]

Why are Americans(USA) so frightened by the word "socialism"?

 

I think it would be inappropriate to generalize that all Americans have such a fear... Why do you see it as an issue specific to Americans?

[CraigD]

The American Healthcare system is based on capitalism. But if one looks at how insurance works, it uses a socialist approach. In other words, everyone is required to pool their money (roughly similar amounts for similar services) irregardless of one's use of the health care system.

This is an incomplete description of how health insurance works in most states in the US, and the few other countries with which I’m acquainted.

 

What HydrogenBond describes is know in the insurance business as community rating modeling. Under this model, insurance premiums (payments by the insured, or, more typically, the insured’s employer) are based on the expected utilization cost of all people living in the insured’s geographic area.

 

Since the late 1980s, purchasers of insurance – mostly employers and brokers – have aggressively sought, among other things, to obtain the greatest insurance benefits (services) for the least money. One of the ways this has been done is to offer employers adjusted community rates based on demographic factors from age to behavioral factors, such as smoking. Another is cost sharing, where the purchaser pays a lower base rate, but must pay an additional fee based on utilization. Cost sharing is also typically passed to the insured in the form of copayments and deductibles.

 

The competitive pressure to provide insurance for less the traditional community rate has been intense, causing a substantial “die off” of insurance companies unable or unwilling to do so. Experts are divided on whether this change in the industry is good or bad. On one hand, incompetent companies have been driven out of business, and many jobs have been created to design and administer increasing complicated insurance products. On the other, people with “adverse demographics” – the old, or people with even minor pre-existing health conditions, are often unable to afford health insurance, and may as a result receive dangerously sub-standard healthcare.

 

One can, of course, completely opt-out of having health insurance, and receive very high quality healthcare on a fee-for-service basis, but such a choice is available only to a small percentage of the population, the most wealthy.

the US insurance programs are all voluntary, un-mandated and there is no government involved.

It is true that, in the US, no one is required by the government to provide insurance, and no one require to purchase it. I don’t think it’s accurate, however, to say that there is no government involvement.

 

Insurance companies require special business licenses in the 50 US states and the District of Columbia. Getting and keeping such a license is a lengthy and complicated process, requiring cooperation within-depth financial, medical, and ethical audits by the various state insurance agencies. The rate that the insurance company charges for its services, what services it offers, and how it advertises them must be approved in advance by the state. If the company refuses to cooperate, even absent evidence or allegation of fraud or similar crimes, state law (at least, to my knowledge, in DC, MA, and VA) permits the agencies to, through the state’s governor, seize the companies monies, close its places of business and take its records and equipment, and even jail and prosecute its officers and employees.

 

Although these laws exist, my experience with state regulators is that they are cooperative and helpful almost to the point of being wishy-washy. I’m aware of one business in the state of MD that has been substantially adversely audited for over 20 years, but has not suffered legal sanctions of any kind by simply claiming each year “we’re working to correct that, and expect to do so within a year”.

[Michaelangelica]

I think it would be inappropriate to generalize that all Americans have such a fear...

I don't,but I didn't actually say "all", but if you like let's go with "most"

Why do you see it as an issue specific to Americans?

Compared to other Western Democracies Europe, Canada Australia etc Americans seem terrified of upsetting the workings of the wonderful "market system".

The Social Security (health and welfare) systems are appaling by comparison

[jackson33]

Why are Americans(USA) so frightened by the word "socialism"?

 

the founding and principles of the US were built on protections from government. it was thought individuals should make up the total of what government would be, with some built in checks and with some very limited purpose. there is zero mention of any socialistic view point written into what are the Declaration of Independence, the Constitution or the first ten amendments. even the original Social Security system, was not intended to be anything it has become. our taxes were to cover the cost of government and the defense of the nation.

 

government figured out how to involve itself, by refusing funds to a state, for refusing to do anything they requested. this was the beginning of what has yet to end in government controls.

 

we are frightened, because we knew (as a nation) 240 years ago, socialism could not work, for a free people. since then its been proved a hundred times.

we also know what the only known purpose of this system could be...control of the masses...and this is contrary to what so many before us, gave the ultimate to protect. you can fool yourself or make excuses, but the ultimate goal of any society to take from one group to give to another, will become a little larger Cuba. all people living there aside from government, live on the same income with the same possession's as any other person. the few that have cars are left over wealth from the 50's...

[jackson33]

I don't,but I didn't actually say "all", but if you like let's go with "most"

 

Compared to other Western Democracies Europe, Canada Australia etc Americans seem terrified of upsetting the workings of the wonderful "market system".

The Social Security (health and welfare) systems are appaling by comparison

 

no mam, not to us. we and the investors of the world do not agree. the SS and health and welfare systems have already gone to far, but not as far the countries you mentioned. appalling to the dignity of whom. the few that play the system for what they can have no dignity to begin with. the business and companies around the world want to participate, not because its cheap, but profitable. employees will work for wages with out a need for government mandates and have the choice of who or what they work for, even to work for them self.

[Freddy]

mandated, required and government control are socialistic symbols.

 

the US insurance programs are all voluntary, un-mandated and there is no government involved. even the group policies a company or organization provides are optional. if you are on social security, a government program, you are liable for Medicare payment or insurance. even here you can opt out, but lose the SS benefits.

 

every person in the US, is provided medical service via any emergency room in the country. this has a combination of reasons, but primarily a mandate of government.

Massachusetts has just begun a mandatory universial health insurance program on January 1, 2007. Everyone in the state is required to get health insurance through their employers or if there is not any offered or they are simply without it the state will sign them up. It is a sliding scale program with those who cannot pay being totally subsidized and then others have their premiums based on income levels.

 

One of the main reasons this was implimented was MA was spending over $1 billion per year on emergency room visits for the uninsured. This program through premiums and cost savings by sending those uninsured to clinics instead of the ER is by law to pay for itself. Of course, we will have to wait to see the results, but 100,000 of the uninsured have signed up.

[Freddy]

the founding and principles of the US were built on protections from government. it was thought individuals should make up the total of what government would be, with some built in checks and with some very limited purpose. there is zero mention of any socialistic view point written into what are the Declaration of Independence, the Constitution or the first ten amendments. even the original Social Security system, was not intended to be anything it has become. our taxes were to cover the cost of government and the defense of the nation.

 

government figured out how to involve itself, by refusing funds to a state, for refusing to do anything they requested. this was the beginning of what has yet to end in government controls.

 

we are frightened, because we knew (as a nation) 240 years ago, socialism could not work, for a free people. since then its been proved a hundred times.

we also know what the only known purpose of this system could be...control of the masses...and this is contrary to what so many before us, gave the ultimate to protect. you can fool yourself or make excuses, but the ultimate goal of any society to take from one group to give to another, will become a little larger Cuba. all people living there aside from government, live on the same income with the same possession's as any other person. the few that have cars are left over wealth from the 50's...

First, the Declaration of Independence is dead document with zero legal implications for the US. Concerning the US Constitution, the supreme law of the land, one need only to read the Preamble, which has equal weight with any other part of the Constitution, to see the intent of the founders.

 

"The Constitution of the United States of America"

 

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

 

The cost of government includes; "promote the general welfare", which means help Americans in need. Since Congress has established through its law making power laws that protect those in need they are the law of the land until struck down by the federal courts or changed by Congress later.

[PsyCho]

Put simply.....

 

 

NO!

/forums/images/smilies/mad_2.gif

 

Though capitalists will appeal to that gooey moral centre and make you believe it really is..... I refer you to the dude in red

[Pyrotex]

mandated, required and government control are socialistic symbols. ...the idea of a National System is to centralize these controls and eliminate any ones personal preference for quality.

I don't see anyone's pref for quality being eliminated at all. If you got the money, you can still buy whatever service you want.

 

Are you serious that you believe government agencies sit around big tables and actually brainstorm how they can eliminate 'quality' from the medical system? If you are serious, then you are bonkers. You need to buy some 'quality' mental services before your condition becomes permanent. ;) [/joke]

 

Bureaucrats may be heartless, in that they cannot be concerned with any one individual's wellfare over another's, but they aren't sociopathic monsters. Typically, they try to balance service provided with cost incurred. This is not freakin' easy. And many folks hired to do this job simply aren't up to it. Pity.

 

I do not favor a socialist form of government, personally, but I see nothing wrong in the people voting to have a national health program, if that is what they want. If it works, and if it costs less then the stupid morass we're stuck with now, what's your beef??? :doh:

 

If it's the word "socialism", then don't use it! :hihi: Call it "healthism" or "george" for all I care. :doh: :hyper: :hyper: