All in the Name
"What's in a name?" Shakespeare asked. Everything, it may turn out.
The Washington Post describes the efforts of Samaritan Ministries to offer an alternative to Obamacare. Samaritan is a leading health-care sharing ministry where a group of individuals undertakes to share health costs according to a certain procedure. The payouts are less defined than insurance, but the bills are typically smaller as well. But a year ago Reason Magazine warned that such plans could be killed off by Obamacare:
Samaritan may soon become a casualty of new incentives created by Obamacare, which does virtually nothing to reduce third-party payments in delivering health care. When their bills are mostly covered by insurance companies or the government—which may also be heavily subsidizing their premiums as well—patients aren't discerning shoppers.
Under Obamacare, most Samaritan members will be able to purchase health insurance policies that offer richer benefits for lower prices, thanks to significant taxpayer subsidies. Take, for example, the median Samaritan household, which has three members and an annual income of about $40,000. Under Obamacare, that family will pay around $2,500 dollars a year to buy a middle-of-the-road "silver" plan on the new health care exchanges. Why so cheap? Because taxpayers will pick up two-thirds of the total cost of the insurance premium.
In fact the opposite has happened.
Month-over-month enrollments doubled and tripled throughout the year at Samaritan Ministries—one of the country's biggest health care sharing ministries, which now has about 113,000 members, 43 percent more than it did a year ago.
Another major program, Medi-Share, reported an average of 500 inquiries a day over the open enrollment period starting in October. Medi-Share saw membership jump to more than 82,000 members nationwide, with a 7 percent increase in March alone.
One reason for their continued growth is Obamacare didn't turn out to be the steal it was cracked up to be. Networks were narrow. Coverage was refused. Deductibles were high. Premiums started to rise alarmingly. For minor aches and pains many people opted to go to a walk-in Walmart $40 clinic than see their 'primary health care physician' under Obamacare.
So was the "Holy Spirit" coming to the rescue of Samaritan? Or did the "Holy Spirit" come in the guise of the God of Mathematics? The key lies in a clause everyone who joins Samaritan must sign. They must forswear 'debauchery'.
Every year, Gary Duff signs an updated version of these 40-page terms, which detail one way Americans can avoid buying private insurance or paying into the Affordable Care Act.
The deal, made possible by a little-known provision in the health-care law, has one particularly important requirement: The Duff household of nine must abstain from general debauchery.
Samaritan Ministries, a health-care sharing group, will charge its national network to cover the family’s medical bills, but only if they agree to forsake binge-drinking, extramarital sex, illegal drugs and tobacco (with the exception of celebratory, post-birth cigars).
It is here where the God of Mathematics touches down upon the earth. One of the reasons faith-based health care Ministries might work is self-selection. Cynics may scoff at the morality clauses of Samaritan Ministries, but such morality clauses are probably written on the handout your doctor gave you under the heading "lifestyle changes" when your blood pressure turned up too high and the lab came back with alarming cholesterol and sugar counts.
"Now Mr. Jones," the doctor will say, "you really have to stop drinking and smoking."
"What about ..."
"And I wouldn't go picking up ladies at the bar any more at your age Mr. Jones. This is the fourth time I've had to prescribe antibiotics this year."
"Ok doc. I'll make those lifestyle changes."
'Lifestyle changes' are a synonym for 'avoiding debauchery'. And if you rename "confession" to "counseling" and "fasting and abstinence" to the Michelle Obama school lunch program what have we missed? One of the reasons why groups like Samaritan tend to work is they require low-risk pools. Anyone who looks at such groups will probably find alarming evidence of bigotry and discrimination. And they would be right! They predominantly contain a certain type of person. The map of any self-selected group is never like the map of America.
But insurance companies did exactly the same thing by offering those who didn't smoke, drink to excess or in general engage in "Christian living" lower premiums. They did it for exactly the same reason. They were a low risk pool so the insurers could charge them less. Car insurers do that. Home insurers do that.
"Is this your third home to burn down Mr. Jones?"
"I'm afraid your insurance rates have gone up."
People who need health care despite unhealthy life styles or sheer poverty can't be viewed through the framework of insurance, for their risk tables will never work out. Such individuals should get treatment as part of a conscious decision by society to provide welfare. Thus the drunk who keeps drinking should get a liver transplant if it's available or a who already has AIDs should receive medicine, or the indigent: not because they are insurable but because society as a whole cares enough to allocate charity or tax money to treat them regardless. But no should imagine they are receiving treatment because they've paid an Obamacare premium.
It's not insurance. It's a conscious act of public policy charity. There is nothing wrong with either, but they are not the same.
The fundamental problem with Obamacare is that it delivers welfare through the IRS and the insurance system, making institutions designed to do something different accomplish what they were never meant to do. It might work of a fashion, but only in the way a Ferrari can be used to pull a plow attachment through a field. Not very well.
Over time the role of affinity groups will tend to increase in a society whose bureaucracy is choking on itself. Many are beginning to understand that having an Obamacare health card is not the same as getting health care. One Obamacare advocate tried to puzzle out why. Her conclusion: Obamacare is Working But the Health System Isn’t. Her explanation is interesting.
People are going to the ER because they had nowhere else to go.
Some industry experts suggest that ER visits are due to a sudden influx of patients seeking care put off due to not being able to afford a doctor. Many of these patients tried to go to the doctor, however, but there was no appointment available. One major problem with the increase in the number of people who can now afford to go to the doctor is that there just aren’t enough of them to go to. ...
The increased number of people with insurance has led to a situation where the ER is the only place to get timely care. I, too, have been forced to go to the emergency room in the middle of the afternoon because my doctor was unable to see me with my great PPO plan and the matter required attention that I couldn’t wait three weeks to deal with. During my wait in the emergency room, which would be hours because they determined I wasn’t dying, I would overhear dozens of patients checking in with the same opening line: My doctor told me to come here.
And that's why health-sharing plans and other affinity groups will continue to flourish despite -- or even because -- of Obamacare. Whenever there's a comparative advantage to self-selection, people will self-select. People have been starting clubs, associations and even political parties for centuries. And churches too. It's all in the name.
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