Open Letter to PA Insurance Commissioner Michael F Consedine

In an October 31 article I questioned whether states could cross the line and offer non qualified health insurance policies along side those conforming to the Affordable Care Act.  I argued a prohibition of this amounts to an assault on freedom to enter into contracts, protected by Article 1, Section 10 of the United States Constitution, and Americans should not be strictly bound to accept only contract terms dictated by a strong central authority in Washington DC.  I noted a long-standing tradition of state regulation of insurance under McCarran-Ferguson 1945.

Only rarely prior to Obamacare had the federal government stuck its nose into insurance regulation, and as far as I know, that only involved health insurance, never any other form.  Insurance regulation was something understood to be handled by the states.

Then Obamacare stood everything on its head.  The federal government would now decide what proper health insurance must look like, that is until this past week when they realized they were in over their heads with an avalanche of policy cancellations and a failed exchange website, upon which they said, in effect, the states are once again good enough to take the reins, if only to bail us out for a while, attempting to shift the focus of public frustration somewhere else.  We broke it.  Now you can fix it.

Prior to realizing the magnitude of the crisis they created, the feds assured us their new policies were somehow better than those “inferior” policies being cancelled, providing more “coverage” that would cost less (after applying money taken from others).  In my mind this is just more lies on top of the big “you can keep your coverage and your doctor” lie.  Yet the biggest insurance lie may be the one we tell ourselves.

As Commissioner of a state insurance department, Mr. Consedine, you should understand the commonly held public misconceptions surrounding the purpose and use of insurance, the notion that somehow low or no deductible, low or no copay, cover everything policies are, in reality,  anything more than costly third party prepayment schemes that benefit no one more than the company that sold it.  Yes, I do mean those dressed up Yugos we call Cadillac plans, as the most extreme example.

You should know that the purpose of insurance is not “coverage” but limitation of risk, to protect assets and provide protection beyond the ability to afford otherwise, and that any attempt to “insure” the ordinary, everyday, or expected is a fool’s game that only insures the incentivized overuse of others will be in your premium.  Yet the warm and fuzzy feeling provided by the illusion of free or almost free when one gets theirs, blinds many people to the fact they are paying for everyone else’s overuse when not getting theirs. It truly is a costly false comfort based in feelings rather than facts.

Indeed, if there is blame for the insurance companies, it is their failure to disclose that what most people say they want is not in the best interest of the vast majority of those saying they want it.  This is the price of a nation poorly educated in personal finance and basic economics.  It is also the challenge of ever hoping to attain real reform.  Insurance companies will continue to maintain their silence as the low end false insurance part of their business is to them as slot machines are to casinos, providing a license to predictably print money thanks to huge numbers narrowing the range of possible outcomes.  Is not insurance, after all, a business based in statistics and probabilities?

Crazy talk?  Then check out Paul Hsieh’s op-ed, “The Only Obamacare Fix Is For Obama To Legalize Real Health Insurance”, published by Forbes this past Sunday.  It is essentially everything I’ve been trying to tell you.  Obamacare thus, rather than fixing anything, only takes a problem and makes it worse!  You should realize these facts, because, after all, you are a Commissioner of insurance.

What you may not realize is the developing movement by physicians to direct pay cash only practice models, such as AtlasMD, a pioneer three physician concierge practice in Wichita, Kansas that offers a family of four unlimited primary care for $120 per month, plus access to wholesale prices on medications and laboratory services.  With the overhead and hassle of third party payers removed, they limit their patient load and offer same or next day appointments that average half an hour and even provide home visits!  This can likely be the future, especially with the availability of low cost catastrophic “real” insurance to compliment it, so long as it can be found.

That’s where you come in, Mr. Consedine.  I know you’ve been complicit with Obamacare from the start, even favoring Pennsylvania’s setting up its own exchange.  Your attitude has been that it’s now the law and we must follow it.  I don’t agree because of the magnitude of the intrusion of Obamacare on our freedom, but respect your view.

Under that same law, though, it is perfectly legal to pay a tax and do absolutely nothing in protecting others from ourselves.  Can it make any sense then, that those same people willing to pay the tax and even forgo the subsidy, should not be able to do something significantly more than nothing in protecting their neighbors from having to pick up for them?  How can anyone argue against that?

As Insurance Commissioner along with our legislators, Pennsylvania should make a stand and tell the federal government that in our state, we will offer qualified policies as required, but also non qualified policies for those who prefer them.  How can doing nothing to protect others be legal but doing something more be illegal?  That makes no sense whatsoever.

Finally, if you don’t think you can make a stand for choice, freedom, truth, limited central government, and local control, then please resign so we can find someone who will.

Thank You

Todd Keefer

Note: This post shared to WatchdogWire-Pennsylvania