More Insurance is Not the Answer

Medical insurance is not an answer to the problem of medical costs. It is one of the principal reasons for the high costs. We need not more insurance, covering more people for more things; we need far less insurance, covering far fewer things, and for fewer people. Biblically consistent provisions in insurance were stated well centuries ago. See how they conform to a Biblical understanding of fallen human nature.

Basic medical care is an uninsurable risk. To be an insurable risk a risk must be:

1) Unable to be faked. Can you fake a bellyache? The very word "hypochondriac" derives from the fake bellyache. Fallen humans bear false witness sometimes.

2) Substantially outside of the control of the insured. Is my heart attack unrelated to decisions that I make? They insure a farmer's crops against hail, but not against weeds. The former cannot control. The latter he can. With basic medical insurance, we encourage people to allow health weeds to grow up in their lives, then use the insurance to remove them. Fallen human beings can be poor stewards of things God has put under our control. Therefore, we need systems that encourage good stewardship, not ones that reward poor stewardship.

3) Significant in size, not economically trivial. Does anyone sell dry cleaning insurance? Big surgical bills might be insurable, but not visits for ankle sprains or sore throats. Again, the principle here is stewardship. A surgeon's bill for $3000 for brain surgery may incur $50 in costs to handle the billing. That is about 1.5%. The physician's bill for an office visit for otitis media may be $45. The billing costs will be about the same, making the billing cost 110% of the cost of the service. That is the system we have in place now in some insurance plans.

4) Objective, not covert. How objective is a backache? Human beings cannot see into the spirit of another and therefore cannot make and enforce contracts which pretend that we can do so.

5) Unlikely to occur to many in the insured group. What proportion of the population does not become ill? The Bible assures us that trouble comes to us as surely as sparks fly upward, and that it is appointed unto man once to die. Insurance makes sense for unlikely losses with a high cost, such as your house burning down. For nearly certain expenses, it amounts only to a redistribution over time of the expenses you are likely to occur, overseen by third parties at a charge by them of about 20%.

Basic medical care fails to satisfy any of these fundamental requirements. Therefore, all public or private schemes to create an insurance payment system will fail. It is as certain as gravity, which cannot be repealed by law. Neither government nor the insurance industry has the power to overturn human nature. They have to accede to it just the way everyone accedes to gravity or breaks something.

The present craziness in medical and pharmacy payments defies basic fallen human nature. When I can live a hellion's life and send the bills for my misdeeds to other people – insurance companies, employers, the government, or my mother – my fallen nature pulls me, urges me, implores me to do just that. We have a health care economic structure that is substantially structured like that.

For commonplace medical and pharmaceutical bills, patients need to pay themselves.


Excerpts from "Pharmacy and Medical Interventions"