What is it about insurance that we don’t understand? Insurance works better and better as the insured group gets larger and larger. So isn’t it obvious that we should get ourselves into the biggest group we can? Yep, that means we in the USA as a single group offers the best possible insurance value.
Even though we consider ourselves the most intelligent of all species, we have lots to learn from those down the “food chain”. Fish join up in schools with as many of their brethren as possible, antelope join up in big herds, the examples abound… thus minimizing threats to the individual. Insurance for people works in a similar manner.
But, when it comes to our health insurance, we join “cozy” groups like our employer, union, professional group, etc. instead of going “large”. We do this because continual 24/7 sound-bites from powerful executives and vitriolic rhetoric from radio talk show hosts tell us that we lose control by joining in a grand community. Truth is just the opposite, insurance companies (predators) win by keeping small groups and we, the people, lose. If you think the word predator is harsh, just talk to the person who is told their insurance is cancelled three days before their cancer surgery due to a pre-existing condition.
The powerful also tell us that Canadians dislike their system. Think about that for a minute… Canada is a democracy. If Canadians wanted to drop national health, they could. They overwhelmingly like their system1.
I recently read that”Blue Shield of California Plans to Raise Some Rates Up to 59%”. The justification is “…healthier people are dropping coverage during a bad economy,” leaving the independent pools small and mostly the unhealthy. But, Wellpoint’s CEO received a 51% increase last year to $13.1 million and at least three other executives got increases of as much as 75%2.
This is greedy executives reaping huge rewards while telling us that we need to keep our “cozy” insurance groups.
Big fish aren’t the only predators.
1- Canada’s CTV television network, 2008
2- LA Times, 4/10/10, WellPoint hikes CEO’s pay package
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Great article on insurance. Thanks.