Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Bank Credit & Money
  • Your Survival Guy’s Super States
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money
  • Your Health
  • Ron Paul
  • US Treasury Yield Curve: My Favorite Investor Tool

No Magic Money Tree for “Free Care”

May 12, 2017 By Debbie Young

It is time for some straight talk on the sensitive issue of preexisting conditions, a subject “fraught with emotion.” There are no easy answers, claims Michael Tanner of the Cato Institute, but understanding the reality for those who are already sick or at high risk of becoming sick is a good start.

First, why is insurance needed? Insurance is about managing risk, whether it is house insurance, key man insurance, flood insurance, equine insurance or any other of the oodles of insurances one can buy. You buy insurance as coverage to protect “against events that are unlikely to happen but would carry a catastrophic cost if they did. (Insurance) premiums reflect both the likelihood of those events and the potential price of the medical care they’d require,” explains Michael.

Consider that, in 1752, Benjamin Franklin started the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, the first wide-scale commercial-insurance company in the United States. In providing Philadelphians with insurance against the then-frequent calamity of house fire, Franklin made the common-sense decision to charge those who lived in wood houses, which were more likely to burn, higher premiums than those who lived in brick houses.

The Affordable Care Act essentially eliminated this type of risk-management, mandating identical premiums for both brick and wood houses, or in this case, someone in perfect health and someone in very ill health. It is this Gordian knot that congressional Republicans are attempting, in their usual inept way, to cut.

For those who have a preexisting condition, “insurance” is a misnomer, because “there is no risk to manage or spread over a larger pool.” Health care costs still need to be paid. But how?

  • Those with preexisting conditions could cover the costs out of pocket. Perhaps charities would kick in, and federal law still requires hospitals to provide ER care. The problem: few would receive the care needed.
  • Others in the insurance pool can cover the costs, as is the case with the ACA. The problem: not enough healthy people are willing to sign up and pay higher premiums than would normally be justified by their actuarial risk.
  • Spread the cost of insurance subsidies over the entire tax-paying population (high-risk pools), with government subsidizing high-risk premiums. The problem: It preserves “the illusion that people with preexisting conditions are being “insured,” when in actuality the uninsurable are uninsurable and there is little point in continuing to include insurance-company middlemen between them and their health-care providers.”
  • Take preexisting conditions completely out of the insurance market, and have taxpayers “pay directly for their care, including them, for example, under Medicaid.” The problem: The risk of “adding substantially to federal and state spending at a time when the growth in Medicaid costs is already squeezing out other priorities such as education and infrastructure.” Furthermore, directly paying providers could lead to many of the problems (price controls, rationing) facing existing programs (Medicare, Medicaid, VA) as costs rise.

In a free society, it is natural and healthy to debate who should pay. “But too much of the discourse surrounding this issue pretends that treating people with preexisting conditions is cost-free,” writes Mr. Tanner. People with preexisting conditions are “currently being hurt by high premiums and deductibles wrought by (Obamacare’s) flaws.”

There is much not to like about the GOP’s incoherent proposal, but so far Democrats have been silent on a better answer.

Read more from Michael Tanner here:

Michael D. Tanner discusses what insurance companies think of the AHCA on FOX’s Special Report

If you’re willing to fight for Main Street America, click here to sign up for the Richardcyoung.com free weekly email.

Related Posts

  • Protect Your Money
  • Trump on the Money
  • The Free Money Truck
  • Author
  • Recent Posts
Debbie Young
Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, driving her Porsche Boxter S through Vermont and Maine, and practicing yoga.
Latest posts by Debbie Young (see all)
  • Breaking News: Reform at New College, Sarasota, Florida - February 2, 2023
  • Oh Yes! It Can Get Worse - February 1, 2023
  • “I Will Veto Everything They Send Me” - January 31, 2023

Dick Young’s Must Reads

  • The Swiss Way
  • What to Do about China?
  • Ron Paul: “Freedom and Central Banking Are Not Compatible”
  • “The Great Object Is that Every Man Be Armed”
  • ENERGY FREEDOM ACT: Ted Cruz Introduces Bill for Energy Independence
  • You Want the Limo, Not the Public Bus
  • CONSTITUTIONAL CARRY: Alabama Becomes 22nd Permitless Carry State
  • “An Epic Struggle Over the Definition of America”
  • DONBAS: Russian Tanks Face Gauntlet of Death from Javelin Wielding Ukrainians
  • A Cashless Society Is A Debacle for Americans

Our Most Popular Posts

  • Will Western Tanks Be a Game Changer in Ukraine?
  • Warren Miller: If You Don’t Do It This Year, You’ll Be…
  • Europe Should Protect Itself
  • “I Will Veto Everything They Send Me”
  • How to Fight Wokism Idiocy
  • US Debt Now Exceeds Annual GDP?
  • The Neocon Russia-Hoaxers of Hamilton 68 Must Be Held Accountable
  • Why Don’t These Mayors Seem to Care?
  • What Kind of Life Are You Investing For?
  • SEN. KENNEDY: This Is How to Fix Biden's Border Disaster

Disclosure

RSS Youngresearch.com

  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Do You Trust This Rally?
  • Reagan’s America Remembered by Your Survival Guy and More
  • What Happens if the “Fed Put” Is Over for Good?
  • Tom Brady Retires, Again. Should You?
  • What Kind of Life Are You Investing For?
  • Warren Miller: If You Don’t Do It This Year, You’ll Be…
  • Are the Realists Winning the Debate over the Future of EVs?
  • CATO: Global Freedom Is in Sharp Decline
  • Biden Administration Destroying Retiree Fiduciary Protections

RSS Yoursurvivalguy.com

  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Treasury Bonds Ready to Rock and Roll
  • Survive and Thrive February 2023: 4 Life Changing Words: “You Should Try This”
  • Tom Brady Retires, Again. Should You?
  • Reagan’s America Remembered by Your Survival Guy and More
  • America’s Unprecedented Debt Problem
  • Iran’s Ballistic Missiles Could Give Russia the Edge in Ukraine
  • What Kind of Life Are You Investing For?
  • Why Don’t These Mayors Seem to Care?
  • Tactical Laser Weapon Achieves “First Light”

Breaking News: Reform at New College, Sarasota, Florida

German Opposition Leader Denounces the Country’s “Insane Drunkenness about War”

Early Advice from Her Dad on Tipping at Charlie Trotter’s

What Is Trump’s Argument for Election in 2024?

Powell Slows Fed Funds Rate Increases

Canadian Grain Harvest Drives Railroad Income Gains

Copyright © 2023 | Terms & Conditions | About Us | Dick Young | Archives