Alexander Andres – 9/6/09

This page was last updated on September 6, 2009.

Priorities in health care are skewed; Alexander Andres; Beaver County Times; September 6, 2009.

Below is a detailed critique of the subject letter.

“So much for ‘all men are created equal.’

“Insurance companies are legally allowed to discriminate. It’s true. In order to keep costs affordable, they charge more money based on your sex, race, age, genetic disposition and family history.”

[RWC] Of course. Does Mr. Andres understand what insurance is? According to Merriam-Webster’s Dictionary, insurance is “coverage by contract whereby one party [an insurance company] undertakes to indemnify or guarantee another [the insured] against loss by a specified contingency or peril.” The price for that policy depends on the likelihood the insured will make claims that exceed the premium. With respect to medical insurance, should a non-smoker pay as much for medical insurance as a smoker with a higher risk of disease? Regardless of the reason, why should anyone with a lower risk of making claims pay the same as someone with a higher risk?

“Insurance companies make astronomical profits while denying or limiting coverage to subscribers. Most companies have implemented policies based upon insurance coverage. Many of these policies limit potential and productivity.”

[RWC] Regarding “astronomical profits,” according to Fox News reporter Shannon Bream during the July 30, 2009, edition of “Special Report with Bret Baier,” Morningstar (an independent investor research company) reported the net margin of the top five healthcare insurers for 2008 ranged from 1.5% to 4.5%. For the last 50 years, the average net margin for all businesses has been 5.5%.

As for the employer policies comments, Mr. Andres provided no specifics. I suspect there are some limited exceptions, but how many policies intended to improve your health would “limit potential and productivity?”

“Once it was considered unethical for hospitals, doctors, lawyers and pharmaceuticals to advertise. Now, you can hardly watch a program without some ad suggesting that something is wrong with you.

“If you need help with stimulation, hair growth or a thousand other non-life-threatening conditions, there is a pill for that because there is a market for that.

“If you have a rare, life-threatening disease, there is little hope. You are considered uninsurable by the insurance companies and unprofitable by the pharmaceuticals.”

[RWC] In this case, Mr. Andres appears to believe an insurance company should be a charity. Assuming you’re not already covered, “If you have a rare, life-threatening disease” and expect anyone to “insure” you as if you were a normal risk, you are asking for charity because you already know your premium will never offset the benefits the insurance would have to pay for your treatment.

“It is not the responsibility of the government to provide insurance, but it is the government’s responsibility to assure that health care is affordable and accessible to all.”

[RWC] No, it is not.

“Change is needed. It would be nice to be able to make the changes in an open environment without taking sides or using fear tactics. It is our money fueling the excessive prices and profits.”

[RWC] As far as I can tell, Mr. Andres performed no research before he wrote this letter. Please read my paper entitled “Healthcare.”