gerryconway: Paul Ryan either doesn’t understand insurance, or he’s lying about it. As w
gerryconway: Paul Ryan either doesn’t understand insurance, or he’s lying about it. As we struggle to understand the so-called Republican “health care” plan, which seems to have little to do either with health or care, it may be useful to review the underlying concept of that thing called “insurance,” which many in the GOP, particularly Paul Ryan, seem to have trouble understanding. Among people with a basic high school education, it’s common knowledge that English civilization began expanding dramatically into the Americas in the mid-1600s. There are of course many explanations for this; among Christians, a favorite is the notion that colonists came to America to escape religious persecution. There’s some mild truth in that, if the only colonists you’re concerned about are the pilgrims at Plymouth Rock, but the greater truth is, most colonists and the companies that financed their colonies established themselves in America for one reason– to make money. Trade was the reason for developing and expanding the American colonies; shipping was the method by which trade was made possible; and insurance was what made England’s shipping trade profitable, turning a small island into a great ship-building empire that within a hundred years had colonies and dominions across three quarters of the globe. The key to all of this, the reason America exists, the reason there was a British Empire, was insurance. Specifically, the concept of shared risk, in which the costs of individual disaster could be spread among many, for the benefit of all. Ever hear of Lloyd’s of London? It’s the world’s oldest insurance underwriter, and in a real sense, it’s the reason Britain ruled the waves. Before the mid-1600s, mounting a colonial expedition to the New World was so risky a proposition that only governments could afford to do it. Spain, of course, had a New World colonial empire a hundred years before England did– but despite the benefits in gold and precious metals, in many ways the colonial experience was a drain on the Spanish Empire, an extractive enterprise with all the diminishing returns of every extractive enterprise. (In the long run, extracting resources from a colony ends up costing more than the value received, which is one reason the South American colonies were eventually abandoned by the Spanish and Portuguese, or left to flounder under disengaged administration.) In the mid-1600s, in England (and more or less simultaneously in the Netherlands) that reality began to change. Thanks to insurance. In a coffee house in London, owned by a man named Lloyd, a group of wealthy merchants came together to pool their resources in a mutual insurance fund. The situation was simple: an almost-predictable number of colonial expeditions were certain to fail, and an almost-predictable number of ships were going to be lost at sea in any given period of time. The problem was, despite all of a merchant’s best efforts, there was no way to know which expedition and which ships would fail or be lost. Any merchant who financed a ship was as likely (or unlikely) to lose his investment as any other merchant. You couldn’t know in advance, which meant there was no way to mitigate the risk of your investment by yourself. Potentially your entire livelihood was in danger on a single roll of the dice. Only a madman would take such a risk (which is why most early colonial expeditions were led by madmen or religious cults). However… if a group of merchants, each with his own expedition or his own ship, could be persuaded to pool their individual risk exposure, and to share the risk, what was potential financial suicide for an individual would become a reasonable loss spread across a group of individuals. Shared risk made individual investment and national expansion possible. Insurance empowered trade; trade created profits; profits created wealth; wealth created opportunity for individuals and the nation alike; individuals flourished and the nation became an Empire. True, rational conservatives know this. Insurance– that is, shared risk across a group to protect the individual against predictable dangers– is a fundamental building block in business and finance. The Republican party, supposedly the party of responsible business, knows that insurance is a vital component in business, and, by extension, in life as a whole. So why do they lie about it? Why would Paul Ryan, in his defense of the indefensible Trumpcare anti-insurance bill presently before Congress, describe the basic premise of insurance as “the fatal conceit of Obamacare”? This is what Paul Ryan said: “The fatal conceit of Obamacare is that we’re just going to make everybody buy our health insurance at the federal level, young and healthy people are going to go into the market and pay for older, sicker people. So the young healthy person’s going to be made to buy health care, and they’re going to pay for the person, you know, who gets breast cancer in her 40s, or who gets heart disease in his 50s … The people who are healthy pay for the people who are sick. It’s not working, and that’s why it’s in a death spiral.” Paul Ryan, the supposed policy expert who supposedly understands economics and business, is describing the basic premise of insurance– insurance, which made possible the world we currently live in– as a “fatal conceit.” Either Paul Ryan is an idiot who doesn’t know what he’s talking about, doesn’t understand Business 101, doesn’t know even high school economic theory– or he’s a mendacious liar playing to the ignorance, greed, and prejudice of the Republican base. My bet’s on the later. Shared risk is the basis of business investment; it’s at the root of every modern economy; it is the DEFINITION of society. Universal health insurance isn’t an imposition on individual freedom: it’s a guarantee of individual freedom, a recognition that what might destroy us as individuals can be borne easily by all of us as a group. It empowers the individual to take risks he or she would otherwise never consider. It strengths the group by sharing a common burden. It makes nations into Empires. You had it right the first time. Neither Ryan nor the other ReThugs understand insurance and how it works. If they had, they wouldn’t have wasted 7 years fighting the ACA when they should have been woking to improve it. -- source link