Americans' healthcare upset isn't really about 'insurance'

On December 4, someone murdered UnitedHealthcare CEO Brian Thompson near the site of the company's annual investors' meeting. Thompson's killing was clearly planned rather than random, and at least appears to be job-related. As I write this, the suspect remains at large.

The establishment response, as usual with assassinations, combines "thoughts and prayers" with condemnation.

Social media responses, on the other hand, largely riff on Americans' complaints about healthcare in general, and healthcare firms in particular. On a brief survey, I'm seeing lots of "poetic justice," and not a little "more, please."

I certainly feel the plaintiffs' pains, and confess to frequently finding myself less than satisfied with my family's (employer-provided) healthcare coverage. If this "targeted killing" is indeed a "customer dissatisfaction" incident, I guess I understand the sentiment even if I don't approve of the particular penalty imposed upon Mr. Thompson's person. Insert thoughts/prayers/condemnation language of your choice here.

What I don't agree with is characterization of the whole matter as relating to "insurance." It almost certainly doesn't, because it's been decades since most American healthcare companies have really offered "insurance."

The system we've lived under since the early 1970s and the inception of the "Health Maintenance Organization" / "Preferred Provider Organization" isn't "insurance" – it's "prepaid healthcare."

"Insurance" is a hedged betting strategy. The customer makes a small bet that something unlikely and unpleasant will occur. The insurer makes a large bet that it WON'T occur.

To the customer, it's worth betting $10 a month that he will suffer a heart attack, cancer, etc. and collect a large amount of money to cover his medical costs. The horrific medical emergency may be unlikely, but it's expensive if it happens. Better $10 a month out of pocket now than $100,000 all at once later.

The insurer takes many such bets, knowing most of those heart attacks, etc. won't happen. It will win far more often than it loses, and pay out less money than it takes in.

Does that sound like YOUR healthcare plan? Probably not. Your plan probably at least partially subsidizes everything from annual exams to routine vaccinations to prescriptions to diagnostic tests (chest CTs, mammograms, and colonoscopies, for example).

Yes, there's an "insurance" component – you've still got that hedged bet in favor of that heart attack, the company still has one in against it – but you're mostly just paying a middleman to partially cover stuff you'd have paid out of pocket for 60 years ago.

That middleman isn't prepared to operate at a loss and go bankrupt.

Just as with actual insurance, you (or your employer, ever since World War 2 era tax rules began incentivizing insurance as a "fringe benefit") WILL fork over more in premiums and "copays" for those benefits than it costs the middleman to provide them.

When a middleman (an employer) pays the piper (the healthcare company), and doctors work as the piper's orchestra, patient choice and patient satisfaction cease to be major incentives.

The problem isn't the Brian Thompsons. It's the system they – and you – are part of.

(Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism. He lives and works in north central Florida.)

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