People Don't Know What Insurance Is
“It’s a myth to say our health care system is broken — it is the best in the world.” That politically incorrect assertion comes from a man with more than 25 years of experience working for one of the nation’s largest health insurance companies. “When the wealthy and powerful from all over the world choose to come to the U.S. for medical procedures and treatment, the message is clear.”
Jack Whelan, a well-known Catholic philanthropist from Indianapolis, is an active Legatus member and has been chairman of the board of the Culture of Life Foundation for 10 years. But for 25 years, Whelan worked for Golden Rule Insurance, eventually becoming COO, president, and CEO. Golden Rule, now a United Healthcare Company, has been offering health insurance for more than 60 years.
Golden Rule, and Whelan himself, was deeply involved in the lobbying that led to legislation creating health savings accounts (HSA).
“The biggest problem with the present health-care debate is that people don’t know what insurance is,” Whelan told me in a recent phone interview. “Insurance,” he explained, “is not pre-payment of service, it is the transfer of risk of the financial impact of a potential event from yourself to a company.”
Whelan used the example of homeowners’ insurance. Your homeowners’ insurance does not cover replacing your roof after years of normal wear and tear. But it does cover damage to your house caused by an unlikely event, such as high wind or a tree falling on it. “When you buy homeowners’ insurance you are transferring the potential expense of events like these,” he explained. You are not pre-paying to replace the roof; you are paying for the company to take the risk of a catastrophic event.
“Health insurance,” Whelan went on, “has evolved into something different. In addition to being the transfer of an economic risk, health insurance now includes some pre-payment for medical services.”
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