Does Obama know what health insurance is?
June 5th, 2010 | by Brian Schwartz |Apparently Barack Obama does not know what health insurance is. Neither do most people, and this is a core problem with health care in the U.S. Back in February at the health care summit, President Obama said:
Look, if I’m a self-employed person who right now can’t get coverage or can only buy the equivalent of Acme insurance that I had for my car — so I have some sort of high-deductible plan. It’s basically not health insurance; it’s house insurance. I’m going to — I’m buying that to protect me from some catastrophic situation; otherwise, I’m just paying out of pocket. I don’t go to the doctor. I don’t get preventive care. There are a whole bunch of things I just do without. But if I get hit by a truck, maybe I don’t go bankrupt. All right, so that’s what I’m purchasing right now.
Sorry Mr. President, a product that is equivalent to insurance you buy for your home or car, but pays for unexpected medical expenses is health insurance. As for not getting necessary care or preventive care, The American Academy of Actuaries wrote the following about HSA-qualified (catastrophic) health plans:
Generally, all of the studies indicated that cost savings did not result from avoidance of inappropriate care and that necessary care was received in equal or greater degree relative to traditional plans. All of the studies reported a significant increase in preventative services for CDH participants.
As for bankruptcies connected with medical expenses, the connection is questionable. As I wrote in the post linked in the previous sentence,
Not that I am defending the status quo health care policy in the United States. It needs some real reform to bring down costs to consumers.
The president is not alone in confusing what most people call health insurance with real insurance. What most people have should really be called (and sometimes is called) a “health plan.” As economist Arnold Kling writes in Insulation vs. Insurance:
The health coverage most Americans have is what I call “insulation,” not insurance. Rather than insuring them against risk, most families’ health plans insulate them from paying for most health care bills, large and small.
In short, the consumer is not the customer, which is a huge problem.
(Obama quote via Cato)
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tags: HSAs, patient-as-customer, real insurance
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