Posted by
Andrews on Saturday, October 10, 2009 10:01:41 PM
I saw a commercial on television today which said something so incredibly stupid (or stupidly self-evident, I suppose) it inspired a post. The line? "Insurance companies only think about their bottom line." Of course the commercial was implying that because big heartless insurance companies don't care about their customers, you must get a lawyer when hurt. And, in truth, it probably isn't a bad idea if you have a very large claim. Then again, as insurance companies also care about their reputation, they also don't needlessly deny claims. (This market force is somewhat dulled by the fact that many types of insurance are effectively cartels in many states. Thanks to "pro-consumer" laws, insurers actually have less reason to listen to customers, and would be more responsive if there were less "protection", as "protection" allows them to operate as cartels or monopolies.)
What made this interesting to me is the recent health care debate. You see, one of the lines being pushed by the left, and by those on the right who want some sort of "insurance reform" to oppose to Democrat nationalization, is that big, heartless insurance firms don't care about their customers, just looking after the bottom line. To which I respond "so?".
Now, I don't want to sound heartless, but that is business. Yes, the insurance firms will pay out only when they must and only as much as they must. But that is the nature of business. Would their customers refuse to change firms if they could save $10 a year out of loyalty to their old insurers? If you found you had a claim against an insurance company, but didn't really need the money, would you say "let them keep it, I don't want to hurt the shareholders"? No, in dealing with the insurers, individuals are every bit as mercenary as they claim the insurers are. They are cut-throat monsters of greed, milking the insurers for every dime and refusing to pay a nickle more in premiums or fees than they absolutely must. Yet no one insults the insured for this behavior, only the insurers.
That is the nature of business. Each individual tries to get the best for himself, while paying as little as he can. Of course, there are other influences as well. As I mentioned, many business also value a good reputation, and so may pay out more than required if they think the good will will eventually earn them more than it costs. As I also mentioned, the state cartels get in the way of such calculations many times, but in a free market, this would be a powerful influence.
Still, the truth is insurers are no more or less greedy than any other business. Dairy farmers, day care providers, orthopedic surgeons, taxi drivers, asphalt vendors, deep sea fishing charter captains, and even you in your career, all follow the same rules, and no one calls them "greedy", at least until they are on the side of the buyer. Or have political points to score by crying "greed". But, why? If "greed" has brought us all we have, the incredible bounty of goods and services, all the wealth and the incredibly opulent lives we enjoy, why should "greed" suddenly be bad in this one context?
Because it isn't. The only reason the government and its shills are denouncing the "greed' of insurers is to work people up into a frenzy, to convince them to vote for a bill promising something for nothing. In this case, "free" medical care unencumbered by the "greed" of insurers.
But, to those who buy into this story, I have one question. If government health care is so wonderful, why do seniors, those qualifying for VA benefits, and even some in the military, buy private insurance? Why pay out of pocket for service if the current "free" care is so great? And, as a follow up, if it doesn't work now, why on earth would it work better when they are trying to do even more with less?
Sorry, but if we ever do nationalize, you will look back with regret to the age of the "greedy" insurers.