The conversation our country is having about healthcare right now is not honest. It’s not just the Republicans, the Democrats are just as dishonest, in a different way. Republicans talk about government death panels denying care. Democrats talk about insurance company death panels. Both positions are intellectually dishonest. Both Republicans and Democrats know that a part of insurance is drawing boundaries around the care that would be paid for by the group. Any care outside that boundary doesn’t get paid for. You can frame it any way you want, but this is a critical part of any insurance.
Insurance, whether healthcare or auto, is a risk pool. A group of people pay into the pool and hope they don’t have to use it – hope they don’t have a wreck on their car, don’t have to go into the hospital. Those few that do have to use it consume most of the money in the pool – the risk pool spends tens of thousands on the people that have serious car accidents, or hundreds of thousands of dollars on someone that has cancer. That means that everybody else in the pool helps pay for the costs of the unlucky few. Healthy me pays for the costs of tripped and broke his leg Bob.
The worst part of the Affordable Care Act that nobody talks about is its removal of caps on annual and lifetime awards. There is no limit to the risk that the risk pool assumes. Before the ACA, an annual cap for an insurance plan might be $500,000, with a lifetime cap of $2 million to $5 million. Now those caps are gone – there is no limit to the amount of money a risk pool has to pay to keep someone alive.