Friday, November 21, 2008

Mind-Numbingly Stupid Industry Tricks

Question for America’s Health Insurance Plans and the Blue Cross and Blue Shield Association: What part of "risk" don't you rocket surgeons understand?
Recently, the largest industry trade group (which represents the carriers, not the agents) and one of the largest insurance conglomerates got together and decided that we no longer need health insurance here. Insurance, as regular readers know, is a risk management tool. Absent risk, there's no need for insurance:
Um, NO: these geniuses do not speak for "the health insurance industry." They speak for themselves, and represent only a portion of our industry. They certainly don't represent those of us on the front lines, dealing with real people very day. And yet they're perfectly willing to state that we no longer need an entire industry.
Oh, Henry, you're over-reacting; this isn't so bad.
Yes, in fact, it is.
Think of it this way, if you have no nails, you need no hammer.
Now this would be fine if you're, say, an accountant. After all, what difference does it make to a CPA whether or not someone's making and selling hammers? But it's mighty important if you're Stanley Tools or Home Depot. Wouldn't it be, um, ill considered for the folks at Stanley to suddenly announce that hammers are no longer necessary? And why would Home Depot then applaud such a move?
Well, that's precisely the policy position taken by the folks who "make" insurance (Blue Cross/Shield) and those who market it (AHIP). And how pathetic is it that the most liberal Senator, now our President-elect, espouses a plan that's actually less draconian (at least initially)?
Words fail.
I often tell clients that not all insurance companies are run by idiots: some are run by morons. This is usually said half in jest, but this example serves to truly underscore its seriousness. The problem here is not just in what these deep thinkers are saying, but in what they've left unsaid:
■ How do you enforce such a law (cf Massachusetts)?
■ Who defines adequate coverage?
■ What mandated benefits are going to get tacked on, increasing the costs?
■ How and when will pre-existing conditions be covered?
■ How does this address the underlying problem of rising health care costs? [hint: it doesn't]
After the AIG debacle, I was certain that nothing my industry could do would surprise me.
Guess I was wrong.
[Hat Tip: Holly Robinson]
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