What You Need to Know About Health Insurance Part 2

Note: This is Part 2 of an 8 part series that is also being published in the Chester County Press.

“It’s Not Insurance”

What we have been led to view as our very own health “insurance” doesn’t come close to meeting the definition of insurance.  Yes, it distributes costs across the general population as insurance is supposed to do. However, the requirement for a signed contract/policy between us and our supposed insurer doesn’t exist.  The only signed agreement in the healthcare insurance system is between our so-called insurer and their in-network doctors, hospitals and other in-network healthcare providers. Contracts, better known as Provider Agreements that you and I are never supposed to see.

While actual insurance would require a healthcare bill be sent directly to us for payment and our insurer reimbursing us for the expense, our so-called health insurance requires all in-network bills be sent directly to the insurer for payment, i.e., their bill not yours! Any subsequent billing of us is severely limited by the terms of a Provider Agreement we can’t see.

In truth, what we are asked to view as health “insurance” is no more insurance than a membership in the YMCA. In fact, the best description for what we have is a membership in a “plan” that subcontracts the delivery of healthcare to in-network hospitals, doctors and other healthcare providers. You and I are simply members of a plan similar to a membership in the YMCA. So long as we pay our monthly membership fee, we can access everything the plan has to offer. However, unlike the YMCA, our healthcare plan reserves the right to lock the door to the care and coverage we are led to expect.

And, for those of you who still have doubts, consider the fire insurance on your home or your automobile insurance. These examples of true insurance all provide a contract (policy) signed by you and the insurer that states the exact coverage you are owed. It’s a legally binding agreement that can be enforced in court. I defy you to find any such document in what we are asked to call health insurance.

Making the situation worse is that unlike all forms of true insurance, our so-called health insurance doesn’t have a definable end-game. While auto insurance, fire insurance or whatever form of true insurance you pick is contractually obligated to compensate us for our financial loss, our so-called health insurance can have no such goal. The need for a replacement knee, treatment for an injury, a flu shot, cancer treatment, prenatal care or any of the healthcare industry’s 77,000 separate codes for the care we receive, can’t be equated to a financial loss. The care we need is purely a relative determination made by our doctor. It’s a determination aimed solely at making us as well as possible outside any consideration of financial loss.

In short, our supposed health insurance isn’t insurance at all. Which is a very important distinction. Because, if it were insurance, we would actually owe whatever isn’t covered and our insurer would be free to determine the care we need and receive. Clearly not true on both counts. But, that’s a discussion for another day.

See Other Articles in the Series