The “debate” concerning Social Security came and went rather quickly in 2005 – mainly because a large majority of working people know a reasonably well-run program when they see one. As in all such programs, adjustments have to be made to match up with changes in our national situation. The large “bubble” of population growth called the “baby-boom-generation” will require an adjustment. Insurance companies use “actuarial” tables to predict costs; this is essentially the task for the Social Security Administration and Congress now.
“Actuarial tables” is a term that means what it sounds like it means. It contains the actual statistical data for rates of death, injury, property damage for overall populations and, often, for specific subgroups of people. Insurance companies use the data to estimate pay-out for different types of loss, then add a fudge-factor for unpredictable loss, throw in operating expenses, and add in profit to derive a price for insurance for you and me. Of course, they also fund a squadron of lawyers to fight pay-offs to you and me, when their tables and calculations do not adequately cover extreme conditions.
So, basically, an insurance company is like a bank in that they don’t actually do anything for their money. They just take it in, sit on it (actually invest it in hopes of increased profit), and dole out less than they take in – most of the time. In another sense an insurance company is like a government agency. Both the overall cost of insurance and, particularly, their profit are more like a tax than a market transaction. The majority of us get nothing for our money. Even people who have certain kinds of loss, such as a fender-bender, often avoid requesting reimbursement from their insurer, because their auto insurance rate (cost) will probably increase. We only put money into their system, because we have little emergency back-up in the U.S.A. nowadays.
How about if we combine the relatively well-run Social Security system with the notion that other forms of insurance are essentially an overpriced tax? That is, let’s socialize insurance in all forms – automobile, life (death), health, property. There would actually be little change noticed by insurance company staff or customers. Staff would still be needed to administer the system. Customers would still pay in – except at lower rates – and would still have to prove loss.
Some differences would be seen, though, soon after the start-up. First, there would be less quibbling and legal wrangling over payments for loss or for healthcare – that is, tactics designed to make the customer give up. Second, there could be more counter-pressure on medical costs with a monolithic, customer-oriented insurance provider. Third, some lawyers would be unemployed – almost always a good thing.
My viewpoint is that such an agency would insure only the basics and would not insure high-risk items, such as real estate below sea level and on sand islands. These would be left to the private insurers. Would we allow private insurers? Why not? We’re not talking state control of business here – I am recommending a competitive approach. People should be able to join or leave. The government agency (or co-op) would simply provide the capability. If the private, capitalist approach works better for the customer, fine. The real problem, however, is that creation of a program like this takes something like that which created the Social Security system in the first place – i.e., a socially-responsible government.
We are, of course, aware that we have no such thing currently. Most of us probably doubt that there has been more than one socially-responsible government in this country for the last century. And some of us might argue that this one example was responding in as small a way as possible to political necessity. Social Security works, but 1) it barely covers the rent; 2) it is now a slush-fund for the fiscal irresponsibility (read ruling class grants, breaks, graft, etc.) of our federal officials; and 3) the benefits are attacked regularly by the same officials (they must hope that they never win the argument, since their federal-level slush-fund would disappear).
Speaking of slush-funds for the ruling class, that is what insurance companies are. Almost all of the big insurance companies were started or taken over by the minions of the usual suspects (banks and investment houses owned/controlled by the petroleum/mineral/chemical/weapons/transportation conglomerate that has run this country since the Civil War). These folks figured this scam out about the same time that they realized that wage-slaves were actually better for their interests than property-slaves. Here was another perfect type of exploitation: the ruling class could get working people to put their own meager money into a non-interest-bearing account owned by members of the ruling class; the ruling class could then use this money for expansion of the interests/property of the ruling class; and the ruling class could skim a percentage of the funds for – I don’t know, how about “keeping it safe”?
Wow. What a scheme. And it’s not only worked perfectly, the ruling class has improved it by having their politicians create laws to make certain forms of insurance mandatory and to bring in government assistance when the pay-out might be above normal levels. It’s all so well-established by now that the only debate one hears is about which insurance company charges the lowest premiums.
Well folks, I think that it is time to bring this up to the forefront. We have some momentum on our analyses of international affairs; we have some traction on economic disparities; we have a lot of fellow-travellers with disrespect to politicians and their “mainstream” ideologies. By and large we don’t have elements of a practical plan, other than get out of Iraq – which is, of course, first and foremost. We need to develop the elements of a plan, and I strongly suggest that “socialization” of insurance is an obvious element that will be well-received by a broad segment of our citizenry.
Insurance is essentially a wager that something bad is going to happen to you, a wager you cannot win unless something bad happens to you.
The insurance that chaps me the most is title insurance, perhaps because I often reflect on where land titles came from. Anyway, everyone gets clipped whenever they buy property for essentially no service (they just update the last title search) and claims are virtually nonexistent.
In Illinois (of all places), they have the Torrens title system. Everybody pays an extra five bucks to register their deed and it goes into a fund to compensate people for defective titles. No title companies…what a concept!