The Story of Insurance

The memory of a grade school teacher talking on the story of insurance is a vivid one and a simple one. She explained that some boys were playing ball on the corner when it happened. Joey hit the longest hit of his life so far. The ball sailed over the left fielder's head, over Mrs. Murphy's fence and right through -- you guessed it -- Mrs. Murphy's living room windowpane.

Now, there were a big problem. The boys agreed that the window had to be paid for, or they'd all be in big trouble. However, they couldn't agree on if it was up to the kid who hit the ball to pay for the damage? That would be hard on Joey, who worked hard for every bit of his spending allowance. Wasn't everyone in the game partly to blame? Wouldn't any of them like to hit a home run, even at the risk of breaking Mrs. Murphy's window?

They talked it over and finally decided to chip in twenty-five cents apiece to pay for a new windowpane. That way it didn't cost anymore very much money, and the window could be paid for right away. Mrs. Murphy was pleased with their solution.

It was nice that a number of boys put their money together so that one boy would not have to bear the entire cost of the damage. Insurance works like that, our teacher explained. A lot of people putting a little of their money together to pay for the heavy losses of a few unlucky ones. Insurance was not supposed to be hard to understand. You face certain risks in life -- sickness, accidents, fire, theft, lawsuits, and even death. Any of these risks may result in loss of money to yourself or your family. Insurance would pay for the financial part of your loss.

Later, somewhere, in what seems like a life time ago, a young and idealistic woman worked as for a lobbyist group. These were extraordinary professional lobbyists who had a dream. It was a nice "feel good" dream -- simply to make health care more affordable for all Americans. We were responsible and successful in allowing Health Maintenance Organizations (HMOs) to exist by helping to write and pass the necessary legislation for them.

I was that young idealistic woman. At the time of the successful passage of the bill before Congress, we were pretty proud of ourselves. Today, looking at what HMO's have become, I'm not so sure what we did was a good thing. I'm not so proud of our efforts. It just feels like another dream stolen away, by those who so easily and greedily change the good intentions.

Denying patients coverage for emergency room visits, not covering hospital stays, refusing to pay for medically necessary procedures and therapies -- weren't part of the dream. we thought they'd be the solution to our nation's health care woes, they only made it worse.

Today, there's a lot of feel good (and not so good) talk, when it comes to health care reform. There is also a lot of uncertainty regarding the recent changes and upcoming changes in how health insurance will work here in the United States. Everyone is wondering "how is this going to apply to my own health care needs."

Sometimes humans take the simplest of concepts, and find ways to make them complicated. There seems to be something within us that begs for a chance to "improve" what already works, to the point of it being totally broken. That's how I personally view insurance, specially health insurance in this country and it's been broken, for a very long time.

Historically, the concepts behind having insurance are old ones. The Phoenicians, Greeks, and Romans in early times had different kinds of insurance. For instance, each shipowner put money into a fund to pay for ships and cargoes lost in Mediterranean trade. Also, members of certain clubs had a plan for helping each other in case of sickness or death. Those practices were early models for all kinds of insurance as we know it today, all inspired by marine and life-insurance plans of hundreds of years ago.

Four hundred years ago, English sea merchants and insurance men talked over their business and shipping news in various bars and eateries near the London docks. The owner of one of these popular meeting places was Edward Lloyd. Even after his death, in 1713, his business continued as a famous marine-insurance center under his name.

Even before that, in 1666, more than thirteen thousand homes went up in flames in the great London fire of that year. Afterward a group of citizens worked out a plan of fire insurance. As the years passed, other kinds of insurance began.

It's shocking to think that clear back in 1799, one of Lloyd's first greatest losses occurred when the frigate Lutine sank with more than five million dollars in gold aboard. That's a huge amount of money for that time. A bell from the Lutine was hung in Lloyds of London offices, and it is still rung when there is news of great importance to be announced.

Today, we can get insurance (if we are willing to pay the price) for almost every risk you can think of.

Recently, an online friend and fellow hubber, Aya Katz asked me, "Jerilee, how will your status change under the new law?" I didn't really have a ready answer because frankly, I hadn't given the matter a lot of thought. I have been receiving all of my medical care for a number of years through the VA, as I am a Vietnam era veteran. For me, it was the only solution because I have pre-existing medical conditions that left me quite uninsured at any price.

One one hand, the care that I and other veterans receive in this imperfect and overburdened government system is astoundingly wonderful. So because of that, part of me says, OK, our government has proved to me that it can manage health care in a very efficient and thoughtful manner. I say thoughtful, solely because the VA is extremely thorough, up-to-date technically and medically, and not above out-sourcing to local medical experts if it is something they can't handle. They also for the most part, pay close attention to being very pro-active when it comes to preventative care and education.

That's not to say that they are perfect. Yes, we wait in lines. Yes, you may not have the same doctor forever. Yes, the level of care may not be the same in all parts of the country. Just like the care you received in the private sector, there are mistakes and misdiagnoses occasionally.

Sadly, in my opinion they do not offer dental care (except for a few veterans with strict criteria), and fail to provide it to the rest of us. Lack of dental care can and does erase years off your expected life span and they know it. Additionally, I find fault with the fact that while the VA covers medical care for veterans of the past, like myself and my father's generation -- Congress has limited the care to the young men and women now serving and those who have served since Vietnam.

In both the dental issue and the limitations for those serving more recently -- we should all get the fact that this is all about "money." So if you think about it, the struggle for health care reform has something in common -- it too is all about money -- who is going to pay for health care reform? Well, apparently we all are and that's where I have deep concerns having worked on Capitol Hill for a large number of years in the past.

Health care is big big business in the United States. Health care lobbyists are among the most powerful. Health care is deeply influenced by another big big business - the pharmaceutical industry. What Americans are going to pay for the cost of universal coverage, the coverage of the uninsured, etc. is all going to be highly influenced by their bottom lines and "what's in it for them."

Initially, it's a woo hoo reaction, finally those of us who have been traditionally denied insurance because of pre-existing conditions are finally going to be allowed to "purchase" health insurance. OK . . . . that's sounds real nice, feels real good, at least until you read the fine print. If I had $798 a month for a health insurance premium -- my problems would be solved -- I'd have to give up eating and a roof over our heads, then I'd die and "problem solved" -- wouldn't need health care insurance anymore. My perspective, of course, is colored by the fact that I don't have anything close to that extra monthly health insurance premium and probably never will. Right now, it would be a stretch to come up with an extra $100 a month for health insurance.

Do they honestly think that a nation whose average income is less than $32,000 a year before taxes is going to come up with what amounts to about 25% of their income each month? So, if people don't have the ability to make the monthly premiums, what are they going to do -- refuse us care -- penalize us? Take it away in the form of tax? Garnish our wages?

I don't know the real answer how this change will factor into my life. I do know this, when I read that much of what they have in place won't even start until 2014, that tells my jaded ex-lobbyist soul, that health care industry lobbyists have once again bought themselves some time to figure out how their interests will profit more greatly as change happens. That you can count on.