Insurance, it seems to me, is a pretty simple thing.
The rationale for insurance is similar to the rationale for government; it's a way of using the strength of people as a group to help us do things we couldn't do as individuals.
So you get a bunch of people together and everybody kicks in a little. That little ends up being pretty big, because you've got a lot of people kicking in. And when one of the people has a problem: gets sick or hurt, house catches fire...or maybe gets a great idea, like buying another cow or expanding the widget plant...the group "kitty" kicks out a little money or a little extra help, so that the person can get back to being a productive citizen again, or make a little more and thus contribute a little more to the group.
People have been doing this since Sumer.
Now since then we've learned that for most of the truly "critical" parts of our lives, we've actually gone to the extent of bringing the actual government to do the insuring.
For example: we wouldn't trust the companies building airplanes and running airlines to verify their own safety inspections, or trust airports to coordinate their air traffic control with other airports and other private companies. So we have a Federal Aviation Administration that does all this.
We wouldn't trust private owners to build and maintain our roads and bridges, so we have state DOT's and the Federal Highway Administration to build them, inspect them and maintain them.
We've learned from experience that private for-profit companies have one duty; to make profits. This is not a bad thing - profits help these companies make better products, more cheaply, and get them into our hands in a timely way.
But profits can also be made by making shoddy, dangerous products, selling them as quickly as possible and then skipping town. Or lawyering up and beating the lawsuits. Or declaring bankruptcy. We've learned this the hard way, through potholed roads, failed bridges, burned toddlers, limbless workers. So where our health and safety is concerned, we usually take the approach "trust, but verify".
Insurance, whether it's auto, health, fire, or life, is an unusual sort of "business". An insurance company has no real capital investment; it has no "product line", no physical plant it cannot rent, no real assets other than the people that work for it and the records of those it insures. So when an insurance company makes a profit there is no chance that profit will be spend researching a better life insurance policy, designing a safer health insurance policy, or retooling the car insurance plant. That profit is, in fact, PURE profit, and can be used to pay the insurance company's owners, investors or workers, or used for some sort of financial transaction (like buying other companies...).
And an insurance company can only make money if it takes in more in premiums then it lays out in coverage. So if you take an insurance company and tell it to make more profit, it can do this only three ways:
1. It can charge more for its policies
2. It can pay less to its policyholders, or
3. It can keep the same receivable-payable balance and try and invest existing profits more shrewdly.
#1 is risky, since theoretically in a "free market" pricing too far above the mean will drive your customers to your competetors, and
#3 is difficult to manage - even the cleverest stock/bond brokers seldom make profits of the sort of scale possible if you work exceptionally hard at
#2: the real payoff for a smart company is figuring out how to chisel away at the payouts. It's a trick any smart carnie knows. You make the game just attractive enough to keep the rubes coming in...but hard enough so that they never get ahead of the House.
So insurance companies can - and many have - figure out how to make more money in the same ethical sense as the construction company taking a contract and then shorting the mix on the asphalt so that the pavement falls apart in a year instead of fifteen, or the garment outfit skimping on the fire-resistant material so that the kiddies' PJs go up like flash paper.
Many developed nations have figured this out.
And they've ALSO figured out that medical insurance is different from other forms of insurance. You can wear your seatbelt and drive defensively...you can put up smoke detectors and fireproof your house...but you can't change your genes to keep out cancer. You can't armor your tibia to prevent fracture.
Medical insurance is, by definition, the chanciest, most liable to fear, panic and irrational need of all the insurance varieties.
Medicine, too, is very vulnerable to the kind of profit-mining schemes that are attractive to insurance companies. When you're in pain, afraid, sick, you're not in a good position to make rational judgements. Especially now, with medicine increasingly complex and the workings of diagnosis and treatment opaque to the layman. The $40 dollar aspirin and the unneeded CAT scan are unlikely to be questioned by the battered character in the bed.
This is why almost all these other nations have taken steps to ensure that medical costs are controlled, and that insurance profits are limited. It's not "socialism" or some sort of strange, Euro-fashion need to put government in control. It's as simple as this:
Medicine and money are limited. Therefore there will ALWAYS be someone "standing between" you and all the medical care you want.
This person can be a third party, an agent of some government, whose primary interest is that you can be made sound as quickly and efficiently as possible so you can go back to paying taxes, or
It can be a private party whose profit depends on spending as little on you as possible, so unless you can be made sound for less than you've paid him you might as well die so he can write you off soonest.
Everyone seems to get this except the Democrats in the U.S. Congress and that entire portion of the U.S. public associated with the GOP.
The GOP has an excuse: they are morally and intellectually bankrupt, and utterly owned by the individual and corporate malefactors of great wealth whose sole purpose it is to keep the groundlings befuddled as they continue to reap largesse from the public purse.
But the Democrats..?
The rationale of the Democratic Party since the 1960's defection of the Slavery Wing to the GOP has supposedly been the welfare of the Little Guy; to look out for the weal of those of us NOT in a two-yacht family. And yet in the Senate yesterday the D's couldn't even keep their own party together to defend the central idea that insurance should be there to help people who are sick or injured and not enrich the healthy and wealthy.
To be middle-class - let alone poor - in the U.S. has always been to be relatively powerless, to have your fate determined by the powerful and the well-to-do. The genius of America has always been to convince these poor slobs that they're NOT just peasants, to keep them "inside the tent", and to prevent the fracturing of the nation on social or regional lines. Think about it - the entire New Deal wasn't a softhearted FDR wanting to cuddle to poor widdle urchins - it was the hardheaded dealmaking of an old patrician takig the elites that had just driven the U.S. economy into a ditch (sound familiar?) by the throat and pointing to flaming Red Russia and inquiring like a snarling Columbian cartel lord whether they wanted plombo o plata - lead from the angry mob or silver to keep the mob quiet?
The existence of a "liberal" wing of the more "liberal" of the two parties has kept a happy face on American poverty and a sexy veil on the impotence of the middle class for the hundred years since the Gilded Age, when Men were Men and poor people ate their own dead (screw 'em, if they weren't worthless why were they poor, then?).
The existence of that wing - or, at least, the ability of that wing to influence actual policy - seems increasingly fictional.
So my question is: what happens to a republic based on a powerfully representative parliment when that parliment demonstrates that it is packed with idiots and whores?