When my grandmother came to the United States in the 1940’s to find work, she always bought life insurance. A proud and independent woman, she came to earn money for her struggling family. She would later tell me, “I didn’t want to be a burden to anyone.” When she could afford it, life insurance was the first thing that she would purchase. Life insurance would pay for burial expenses which could bankrupt a family.
Just as an aside, accident insurance and death insurance came about because of the dangerous workplace factories of the late 1800s and early 1900s. In a clever marketing move, what used to be called “death insurance” is now called “life insurance.”
Increasing Cost of Healthcare
The 1940’s were a time when earlier medical advances of antibiotics and surgery were changing the face of medical care, and it was during that time that health care began the steady climb to exceed burial expenses. Today, health care costs are the number one cause of bankruptcy, and health insurance (not life insurance) is the major topic of debate. While health insurance spread the risk and cost of health care to a larger group, hospitals and doctors also benefited as the medical advances were too expensive for most people to afford without health insurance. Health insurance meant more people could afford health care.
Health Insurance Gets Attached to Employment
In 1940, less than 10% of the U.S. population had health insurance. By 1950, almost half the population had health insurance. Why? In 1942, as World Ware II waged on, Congress passed the Stabilization Act that limited wage increases to control inflation which threatened the war effort. The government needed to spend money on the war effort, and inflation decreased the value of the money the government was spending. Business still needed to recruit workers, and health insurance became a perk that was offered. Since it was not technically part of the income, the benefit was not taxed. Two things happened, health insurance was tied to your employer, and employers had an incentive to provide health care since they were not taxed on health care spending.
When health insurance is linked to your employer, if you lose your job, you lose your health care. (The COBRA Act tries to fill this gap by allowing you to continue to self-pay for your group-rate insurance for a limited time period.) Or in that strange paradox, if you pay your own insurance and get too sick to pay, you lose the insurance. (That’s where disability insurance becomes important.) There are also two populations that are not covered: (1) the unemployed or those employed without health insurance and (2) the elderly who are no longer working. In 1965, the Medicare and Medicaid system was created as a government health insurance plan for seniors and later expanded to the disabled. Still in the uninsured pool are many of the artists, innovators, and self-employed – one illness away from bankruptcy.
The Complicated Health Insurance Market
Through the years, the health insurance market has gotten more and more complicated. (More than I can explain here.) With health insurance, the idea is that the risk and the costs are spread over the group. Initially, everyone paid the same rate. With private for-profit health insurance, if you are at higher risk, you pay a higher rate. Those with “pre-existing conditions” often were denied insurance, insured with exclusions, or charged exorbitant rate (a.k.a., premium). While this may make sense with risks like smoking, does it make sense for the genes that you cannot change? Insurance companies sometimes deny payment, and many people who think they are covered find themselves paying out of pocket for their healthcare.
Decisions to Be Made – Who Decides?
As a country, we have decided on things that are important (or not important) in health care. The Emergency Medical Treatment and Labor Act (EMTALA) has mandated open access to emergency care. In some communities, the emergency department is the only provider to those that cannot afford care. Emergency care stabilizes the patient and does not provide chronic or preventative care.
As the cost of health care continues to increase, doctors and lawmakers at some point will need to come together and decide on the minimum level of care that we are willing to provide as a nation. These are hard, difficult, and unpopular decisions. I remember those early naive years of medical school when one student raised her hand to ask, “Do you mean that anyone who needs a liver transplant can’t get it.” The answer, “no, if you can’t afford it, even if you qualify, you will not get it.” The class laughed uncomfortably. We live in a system where if you do not have the money (or the insurance to provide it), you do not get specialized treatments like liver transplantation. Some therapies also require the money to travel to specialized centers. That is a reality of how our system works. This is also the reality of what we can afford as a nation. No matter what decisions we choose, someone loses. Which choice does our society (our nation) gain the most?
Policy Choices
Today, anyone who needs dialysis qualifies for Medicaid. Policy makers have ensured access to dialysis for citizens that do not have health insurance. This decision to provide care may seem like a morality issue, but it has significant economic impact. We as a nation pay the bill. Every question has multiple dimensions. As a society, perhaps we can at least agree that everyone should have access to a certain level of preventative care. (But who decides what that level is?) As a society, perhaps we cannot all have access to cutting edge technology and innovation. Perhaps, like some countries, it does not make sense to provide high risk surgery to a 90-year-old as a matter of policy (taking the decision away from the doctor). Perhaps we can agree that at least our children should have access to health care. Perhaps or perhaps not. The issues intertwined in healthcare are quite complex – political, economic, social, ethical, moral, etc. – groups lobby from multiple directions. I don’t have the answers here, nor have I exhausted the complexity of this topic. I only hope to stimulate the conversation. (Feel free to leave comments below.)
Life, Health, and Death Insurance
The advances of health care have come with a cost. Today, if my grandmother came to the United States, it is not death that would burden our family with burial costs, but illness and the ensuing health care costs that could bankrupt our family.