Health Insurance Does Not Equal Health Care

There is a difference between health care and health insurance,.

There is a difference between health care and health insurance,.

The media often use the terms “health care” and “health insurance” as synonyms.  But the two things are distinct.  Confusing one for the other makes the issues more upsetting for everyone.

For the sake of serenity, let’s look at the terms clearly.

  • Health care: The services, drugs, or things that a person gets from a licensed or otherwise qualified medical professional.  Let’s call it services-drugs-things for short.
  • Health insurance: One way, among others, to pay for services-drugs-things.  Also, a complex financial contract protecting a person’s assets from being sold to pay for said health care.

Health reform is described by some media as “government run health care”.  Often, this is followed by dire predictions about the IRS choosing or cancelling your cancer treatment.

Yet, health reform does not directly affect the services-drugs-things you can get.  Its indirect effect is that health insurance makes certain services-drugs-things take less money out of your pocket at the time you get them.

If anything, health reform makes more services-drugs-things cheaper (out of your pocket) than before.  This is why the new insurance plans cost more than the old ones.  The sticker shock is worse in states that previously allowed skinny plans, milder in states that required more meat-on-the-bones.

Government, both state and federal, has thousands of pages of rules for health insurance dating back decades.  If having complex rules is the defining trait, you could accurately say that health insurance has been (federal) government-run since at least 1974 when the Employee Retirement Income Security Act (ERISA) was signed into law.  You could go all the way back to 1942, when the federal government allowed employers to give health insurance as a tax-free benefit.

Health reform has simply made people more aware of just how much the government is involved in health insurance.  This is not to say that health reform rules are trivial, only that having government rules on health insurance is not new.  Nor does having government rules make something “government-run”.

If we put federal rules for hospitals into the news (if somehow this became newsworthy), people could easily conclude that we have government-run hospitals. Any hospital that receives federal funds – and virtually all do – has to follow thousands of rules. These dictate who will be paid for providing care, how many properly licensed and trained people have to be on hand in order for a place to be called an “emergency room” or an “intensive care unit”, and so forth.   Few people describe hospitals as being “government run” though they cannot even be called a hospital if they do not follow these rules.

There is another reason that people confuse health care and health insurance.  Many contend that if health insurance doesn’t pay for the service-drug-thing, the patient is effectively deprived of it.  Indeed, medical care can be very expensive especially when you need a lot of it.  And by definition, you are sick when you need it; so you can’t go out and earn more money to pay for it.  Therefore, health insurance dictates what you get for services-drugs-things.

There is some logic to this argument, though it relies upon our agreeing to give up personal freedom to do what we choose.  Surely there are higher forces than an insurance ID card shaping our fate.

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