Making Sense of the Health Insurance Debate–Part I

It is not the purpose of this blog to make popular statements. It is our purpose here to expose you to truths about insurance in general today and, in our next blog, health insurance—truths that have by-and-large been lost in today’s discussions on the subject. With over forty years’ experience in the field of health insurance, I’m in an almost unique position to discuss this subject.

Of all the political leaders you’ve heard discuss the subject in recent years, how many have any real experience in the field? How many have vested interests in getting you to support the programs they espouse—and their own re-elections? Having retired from the business and owning no stock in health insurance companies, I have no vested interest except disseminating the truth.

The only reason that insurance companies can underwrite your potential losses is that none of us can know what the future holds. If we did, either we wouldn’t buy insurance or they wouldn’t sell it to us. Today, we’ll discuss insurance in general. Then next week we’ll home in on health insurance.

Over the last 60 years of driving motor vehicles, I’ve never been involved in a serious accident. Does that mean I couldn’t possibly have one tomorrow—or next week—or next month? Of course not.

If I knew absolutely that I was going to have a bad accident next week, or whenever, I’d probably want to increase my policy. On the other hand, if I knew for sure I’d never have one, I’d likely quit paying for the stuff. Waste of money.

Conversely, if my insurance company knew I was going to have an accident next week, they wouldn’t consider letting me increase my policy. In fact, they’d be apt to cancel it so they could avoid that claim. But if they knew for certain I’d never have one, they’d love to see me increase it.

INSURANCE WOULDN’T WORK IF WE KNEW WHO WAS GOING TO HAVE A LOSS WHEN. Only a vote-seeking politician would try to convince you otherwise.

Okay, if no one knows that, how do they set rates? Looks like they’d have to know before deciding what to charge.

The key is that they don’t know WHO will have an accident this year—or WHO will die this year—or WHOSE house will burn down this year, but they DO know approximately how many accidents there will be this year and what the dollar cost will be. And how many people in a given age group will die this year, and how many houses will burn down this year and what the financial loss will be.

It’s only because actuaries can figure nationwide (or statewide) totals but cannot pinpoint what individuals will suffer loss that insurance is possible.

Everything so far is pretty much common sense. Almost anyone—at least those not living within the Beltway—can understand these things.

We wouldn’t expect an insurance company to sell us a policy to cover a car wreck that happened yesterday. A life insurance policy to cover Aunt Sally, who died last week. A homeowner’s policy on a house destroyed in last night’s tornado. Trying to collect on such things as that is called fraud, and that can’t be allowed to happen.

Ever hear someone make this statement? “Well, it’s only insurance company money.” Or “Insurance companies have plenty of money. They’ll never miss it.”

This is one of the Great American Myths: INSURANCE COMPANY MONEY.

There is no insurance company money—it’s all POLICYHOLDER MONEY. Insurance companies get their money from premiums paid by you and me. If we inflate their costs by allowing fraud or unreasonable government requirements, we simply take more money out of our own pockets.

We’re the one’s paying the bills, and we should demand that ONLY LEGITIMATE BILLS BE PAID. Regardless of how much we may feel sorry for whoever is involved, payments must be governed by POLICY PROVISIONS—not emotion.

Ø How would you feel if you knew money was being siphoned out of your pocket to pay illegitimate claims?

Ø How about someone who cheats an insurance company by getting a mechanic to raise his bill a little and not charge you a deductible?

Ø Someone who was robbed and threw a few extra items into the claim?

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About David N. Walker

David N. Walker is a Christian husband, father and grandfather, a grounded pilot and a near-scratch golfer who had to give up the game because of shoulder problems. A graduate of Duke University, he spent 42 years in the health insurance industry, during which time he traveled much of the United States. He started writing about 20 years ago and has been a member and leader in several writers' groups. Christianity 101: The Simplified Christian Life, the devotional Heaven Sent and the novella series, Fancy, are now available in paperback and in Kindle and Nook formats, as well as through Smashwords and Kobo. See information about both of these by clicking "Books" above.
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One Response to Making Sense of the Health Insurance Debate–Part I

  1. Debbie says:

    First of all I would like to thank you for posting this blog not just on behalf of insurance companies but private and publicly held companies nation wide. They are under attack by our government and we are evolving into a society of government dependent people who want to sit back collect government assistance and complain about “rich people/companies” taking all of our money. I’m sure all of us tax paying citizens would agree that we would much rather pay our monthly insurance premiums that protect and assist us during times of crisis unlike our tax dollars that are dispersed to countless government agencies that are seemingly senseless and are in direct conflict with my personal beliefs and needs as a tax paying citizen. I pay SSI premiums monthly and what is the guarantee that I will even receive SSI when I am ready to retire? I pay my insurance premiums monthly and feel much more secure in the fact that if an unfortunate crisis were to take place I would be covered. On the other hand I am required to pay in to SSI with extreme uncertainty that the government has handled and protected MY premiums to ensure that they will be available when I am in need of them. Why would we even begin to consider government intervention with any type of private health care when they cannot even handle our retirement premiums? Are my tax payer dollars government money or my money? Our constitution states that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States” The government is to provide for the GENERAL welfare of US Citizens not the general welfare of those here illegally and I do not consider art endowments for projects of outright blasphemy such as the “Piss Christ” exhibit to be in the general welfare of the United States. So let me get back to my point. Insurance premiums ~ I have the ability to freely choose the insurance company that best fits my needs and coverage. I select the coverage that I deem to be in my best interest and protection. I must pay higher insurance premiums not because I have had a claim against my insurance protection but because I am required to carry uninsured motorist coverage due to those individuals who do not want to take responsibility, once again, for their right to drive.

    Realistically, what will happen to my insurance premiums if the government becomes involved? They will no longer be mine ~ they will be the governments and I am not okay with that.

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