Health Care Reform = Insurance Reform; The Difference Between Public/Private, and Profit/Non-Profit

Health Care Reform = Insurance Reform; 

The Difference Between Public/Private and Profit/Non-Profit

You may love your doctor, but do you love your insurance company?

Critics of "health care reform" like to film commercials showing home town doctors in white coats talking about how reform would be a problem for you. This is because critics would like you to associate them with your doctor's care. But the truth is that the reform issues that are currently being debated in congress focus on your insurance company's performance, not your doctor's care.

Why Private, Profit-Making Insurance Companies Will Never Put Your Health First:

Look at it this way. There is already someone between you and your doctor, whether those commercials show it or not. If you currently have health insurance, that someone is an insurance company executive, whose primary purpose is to make a profit off of your health care needs. As long as you are in good health, this is no problem for them. They charge a premium for covering you, because statistically it's a good risk for them...as long as you stay healthy. Of course, if your health should deteriorate for any reason, they'll re-think what they charge you and what they'll pay for - if they continue to cover you at all. And they'll do this for one simple reason; not because they're awful people, or they have no conscience, but because this is their job. As long as health care is only run as a for-profit industry, profits will always be the bottom line for insurance companies, even if it is at the expense of you or your family's health. 

Why Non-Profit Insurance Companies Aren't the Answer:

Some companies, such as Kaiser Permanenete,  have attempted to resolve this by creating non-profit insurance. Although the idea seemed solid, their track record in terms of improving quality of care has been poor. As someone who teaches classes in non-profit management, let me explain why this has been the case:

The label "non-profit" is often misunderstood. Non-profit status, also called 501(c)3 designation, is a designation that an agency makes primarily for tax reasons. The main difference between a non-profit and a for-profit corporation, as far as their interaction with the public, is that donations made to a non-profit can be tax-deductible. This is because any agency profits are required to be put back into the agency, rather than go to shareholders. For this reason, many charities choose to utilize the 501(c)3 status.

However, non-profit status does NOT necessarily mean that the agency is stable, well-funded, or provides any better quality service than a for-profit agency. Indeed, most non-profits are in a constant struggle to find and maintain funding. Non-profit insurance companies have a bit of a leg up, because they will charge you premiums and co-pays just like any for-profit insurer will. This helps them to maintain funding. But it does not guarantee that money will go into your care. Executives for large non-profit agencies, especially insurance agencies, can make just as outrageous salaries, bonuses, etc. as any other executive. That money is simply not considered to be a profit for the company. And running a non-profit insurance company is just as expensive as running a for-profit insurance company, so they still have to find a way to solicit business, pay for services, pay for salaries, etc. on top of the cost of doing business. The result has been that non-profit insurers have no better record of quality or consistency of care than any other insurance company.

How A Public Option Would Be Different:

A "public option," such as the one in President Obama's health care plan, means just that - it is an option that would belong entirely to the public. Essentially, the public - you and I - would replace the shareholders that  private agency would have. This means that anyone who wants to utilize the public option would be allowed to do so - because we, the public, are the providers. We are the insurers. Better yet, all of us can band together and work as one to bring the costs of health care down. This is how every insurer works - they use the collective power of all of their clients to bargain with health care vendors for better prices on materials, prescription medications, etc.

Imagine the bargaining power that we could wield as the entire public of the United States of America. The more people who select the plan, the better our bargaining power would be. And right now, with approximately 50 million people uninsured in the U.S., we already have a large bargaining base to begin with.

We could be larger than any insurance company could imagine. That's why insurance companies don't want this bill to pass. They simply don't know how to compete with us, if we all work together. They would have to improve their own performance and payment options to maintain competitiveness.

Of course, there will always be skeptics. Under the current plan, no one would have to leave his or her insurance company if they choose not to. Not everyone will sign up for the public option, so it is unlikely that other insurance companies would be driven out of business. More likely, they would have to bring down the cost of executive salaries, reduce their own profits, and provide better, more specialized care to maintain competitiveness...just like any other industry. At least, that's what has already happened in most other developed nations - all of which have some form of regulation on health insurance. But don't believe me. Go find yourself someone who is actually from one of these countries (don't rely on second-hand spin from ultra-conservative Americans), and ask if they would switch for the insurance system we have now. You might be surprised how fast they say "Not a chance."

How Can the Public Own An Insurance Organization?

We can be our own insurers, just the same as we own other businesses which are important to the stabilization of our nation's welfare. We own the postal service. We own interstate highways. We own libraries. Some are great, some need help. But everything the state (public) owns, it owns for one reason - we believe as a nation that it is too important to be left up to a few private companies.

And when it comes right down to it, what could be more important than your and your family's access to affordable health care, prescriptions, and medicine?