LF1M: Need Healer

Health care seems to be a big topic again, so let's just go ahead and solve it right now. How hard could it be?
First off, let's set a couple ground rules.
Rule 1: We can't just have health care for the healthy people. We're all in this together, so we need a plan that takes care of everybody.
Rule 2: Emergency rooms and GoFundMe pages are not a viable health care plan.
So, let's look at our options to get this mess under control. One of the go-to suggestions for a health insurance cure-all is to allow insurance companies to sell insurance across state lines and, through the magic of free market competition, premiums will go down and quality will go up.
This is ridiculous for two reasons.
The first is that there's nothing stopping an insurance company from setting up shop in any state they want, so long as they create a policy that abides by state's rules. BlueCross BlueShield operates in 36 different states. Medica, next year's only participant in Iowa's private insurance exchange, offers plans in seven states.
What people actually mean when they say "sell across state lines" is "circumvent state regulations by selling from a state with the lowest possible standards." This might make premiums go down, but you'll be buying plans that cover nothing but two Band-Aids and half an Aspirin. The second reason is that the very nature of the insurance market makes competition counter-productive.
If I'm selling 100 health insurance plans at $10 a month and one person is costing $1000 a month in health costs, I need those other 99 people to make up the difference. If I lose half of those people to another insurance company then my company either needs to double the monthly premium or it's going to fold. Of course if you double the premium then you'll drive away your healthy customers and have to fold anyway.
It's basic math. The more you split the population among different insurance providers, the less stable each provider becomes. When healthy people jump into the pool with the lowest premiums, or get out of the pool all together, this leaves the insurance companies with the high cost individuals stuck between a rock and a hard place.
In the past, insurance companies would just find a way to drop those expensive people, cutting them off from their health care when they need it the most. We are not okay with this anymore. See Rule 1.
But, that still leaves insurance companies with a big problem. We've seen this in action in Iowa as private insurers on the health care exchange underestimated the cost of providing health care to the influx of new customers. Premiums substantially jumped to cover those costs, resulting in healthy people dropping out of the market, which caused premiums to increase even more for those that remained. This results in an unsustainable death spiral for the industry.
Anything that reduces the number of healthy people in the insurance pool is going to cause premiums to go up. There's no way around that. Obviously the most stable model for health insurance is one where everybody participates.
But wait, that sounds suspiciously like the dreaded "single-payer" option.
Yes, people balk at the idea of a single payer system, but we're already halfway there. We have 55 million people on Medicare. We have another 74 million on Medicaid. That's more than a third of the country's population in those two programs alone, and that third represents the most costly demographics we have. All supported by taxpayer funds.
Imagine what premiums would be like if those programs didn't exist.
It doesn't stop there. In an ongoing effort to keep premiums down in the private market, we've gradually been segregating out more and more of the people that cause them to go up.
The often suggested alternative to forcing insurance companies to take everybody regardless of pre-existing conditions is to put the most costly of these people in state run "high-risk pools," so when people become too costly for the private insurance market they at least have somewhere to go. Granted, these pools have higher premiums, strict eligibility requirements, lifetime limits, and, completely contrary to their intended purpose, exclude coverage for pre-existing conditions, but they are technically better than nothing. The state doesn't make any money on them, but at least they can help keep premiums down in the private market.
Similar in concept to the high-risk pools is the idea of reinsurance, which is a key feature in the plan proposed by the Iowa Insurance Division to help stabilize premiums next year. With reinsurance, the government reimburses insurance carriers for high cost individuals so instead of the most costly individuals driving up premiums, insurance companies instead get a check from the government to make up the difference.
Let's not forget the subsidies either. In another effort to keep premiums low, the market has been injected directly with federal funds to make insurance affordable to people not eligible for Medicaid, but who also don't make enough to pay the premium outright.
So let's recap. Taxpayers, in one way or another, are picking up the tab for the elderly, the young, the poor, and the chronically ill. Generally the most expensive portions of the population. Taxpayers are also subsidizing a good chunk of the rest because insurance companies still can't make ends meet otherwise.
So what exactly are we paying premiums for? Is it just a token gesture to support the illusion of a free market in a system that is increasingly dependent on privatized profits and subsidized losses?
If our sickest, oldest, and most costly population is already receiving taxpayer funded healthcare, how much could putting healthy people in the mix really move the needle? How long are we going to prop up a private market incapable of providing service to the people that need it the most? How much time and money is wasted trying to figure out who is eligible for what when we could put everybody in one system?
What exactly are we waiting for?
Travis Fischer is a news writer for Mid-America Publishing and wonders how long you can fight the inevitable.