Posted by: Jeff | August 28, 2009

Are Health Insurance Companies Evil?

More precisely, are the people who work for health insurance companies evil? That’s the question asked by this article in The New York Times:

“I’m certainly not villainous or immoral in any way, shape or form,” said Mr. Shireman, 40, a project manager for Humana, the country’s fourth-largest health insurer.

So Mr. Shireman does not like it one bit when he hears President Obama declare that Americans “are being held hostage by health insurance companies.” Or when the House speaker, Nancy Pelosi of California, characterizes insurers as “villains” who have “been immoral all along.”

I’m actually rather sympathetic to Mr. Shireman’s view. The activities of the insurance industry which have earned the ire of the political class and the public – “double-digit price increases, medical underwriting to exclude applicants from coverage, cancellation of policies for incidental causes, denials of claims, deceptive marketing and generous executive compensation” – are all profoundly immoral things to do. But they are also things which must be done to turn a profit, and therein lies the problem. Like any other business, health insurance is a for-profit endeavor. And like any other business, its ultimate purpose is to make money for its share holders. The purpose of actually providing people meaningful health coverage is and must be secondary to that goal. If companies like Humana didn’t engage in those grossly immoral practices, they probably wouldn’t exist.

So we Americans have set up a rather bizarre paradox. For-profit free market capitalism, as this example shows, can sometimes lead to activities that are cruel and inhuman. Yet the dominant strains in American culture continue to insist that this same free market capitalism is always and everywhere good, noble and justified. (Or, at least, far preferable to the government-run alternatives.) Mr. Shireman and his ilk are caught in the middle of that paradox, so I understand his resentment. They are all simply doing what our culture tells them they should be doing – running a business and trying to excel in that business – and then we turn around and damn them for it. I have friends and family who adhere vociferously to conservative economic principles, and will then declare their hatred for health insurance companies in their next breath. And never notice the contradiction.

The problem here is not the character of the people working for the insurance companies. The problem is the conservative economic principles. Not the values held by particular persons, but the values we collectively hold as a country, and which under-gird our current economic and social order. The employees of Humana collectively engage in immoral actions not because they are immoral as individuals, but because the larger system in which they operate is immoral. And that’s what needs to change.

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