InsideCatholic 2009

“People Don’t Know What Insurance Is!”

Deal W. Hudson

Published August 24, 2009

“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.”

Since the majority of health insurance is provided by employers and the government through Medicare, Medicaid, and Veterans Affairs, and consumers pay only a modest portion of the insurance premium, there is no consumer motivation to control consumption. Going to the doctor has, as Whelan put it, become “like going to the grocery store without having to pay.”

Whelan asked me to imagine two scenarios:

In the first, you are given permission to go shopping at your favorite grocery store without having to pay for the items filling your basket. What would you pick off the shelves? Premium steaks and the finest wine? Of course! Compare that with the second scenario: the way you normally shop for groceries. The steaks and the wine go back on the shelves, because you are paying. As Whelan pointed out, “Assuming the cost directly impacts the kind of decisions we make about consumption and how we behave when we spend our money.”

The key to a “workable alternative to government-run health care” is lowering the cost of health care by bringing consumer choice back into the health-care equation. Giving control of health care to the government is exactly the opposite of what will bring costs down, one of the four goals sought by the Catholic bishops.

Only a portion of health care – but an expensive part – remains a transfer of risk. Treatment of cancer, for example, is not a financial event that everyone will face one day. The health insurance company assumes that risk.

But – and this is crucial – insurance companies have to set their pricing for medical coverage to cover the behavior of consumers who are not controlling their personal consumption of day-to-day medical services for things like colds, flu, cuts, bruises, sprains, skin rashes, and various physiological and psychological services now offered under insurance plans. For example, how many massages and visits to the psychologist would you pay for if they were coming out of your own pocket?

Whelan’s point is simple:

When we spend our own money, we control our consumption – that is the factor missing in our health-care coverage which, for the most part, is paid for by employers or the government.
Consideration of price needs to be put back into the health insurance equation. This will immediately change the dynamics of consumption and the cost. If everyone purchased his or her own high-deductible health insurance and combined it with a health savings account (HSA), health insurance would once again become what it should be: the transfer of risk, not prepayment for predictable medical needs.

Under such a plan, everyone would pay out-of-pocket from their HSA for normal medical needs, and the insurance company would assume the risk for high-dollar medical costs. Once the consumer starts considering the costs of medical care, consumption will go down, and so will the cost of health insurance, without diminishing the quality of this nation’s medical services.

Charity, Civility, and Speaking the Truth

Deal W. Hudson
Published September 21, 2009

The funeral of the late Sen. Ted Kennedy provoked a highly charged debate among Catholics about civility. In the midst of this discussion, Archbishop Raymond L. Burke, the prefect of the Supreme Tribunal of the Apostolic Signatura, came to Washington, D.C., to be honored by at its 14th Annual Partnership Dinner at the historic Mayflower Hotel.

Addressing more than 200 guests, Archbishop Burke said, “We must speak the truth in charity,” but also, “We should have the courage to look truth in the eye and call things by their common names.” The tension between these two admonitions is evident in his own heroic defense of the Church’s teaching on the sanctity of human life and his personal humility.

Frank Hanna, a Catholic businessman and philanthropist from Atlanta, noted this in his introduction of the honoree. Before ever meeting Archbishop Burke, Hanna said he thought of him as a lion, whose roar “would send chills of admiration” down his spine. But, when he finally met the man one day in Birmingham, he noted:

I was struck by his simple humility. He greeted me with kindness and warmth. And I thought to myself, that’s how lions are – no waving about, just quiet humble strength. There is a reason C. S. Lewis made Aslan, the lion, his hero.

Indeed, it is hard not to be struck by the gentle demeanor of the bishop who caused such a ruckus in the 2004 election by saying he would deny communion to presidential candidate Sen. John Kerry. Since then, he has remained one of the most outspoken American bishops on the subject of the defense of life and marriage.

Friday evening in Washington was no different. Throughout his 50-minute address, the archbishop returned again and again to the scandal of Catholic politicians who support abortion or same-sex marriage. He did not mince his words: “It is not possible to be a practicing Catholic and to conduct oneself in this manner.”

“Neither Holy Communion nor funeral rites should be administered to such politicians,” said Archbishop Burke. “To deny these is not a judgment of the soul, but a recognition of the scandal and its effects.”

With obvious reference to the Kennedy funeral, he argued that when a politician is associated “with greatly sinful acts about fundamental questions like abortion and marriage, his repentance must also be public.” He added, “Anyone who grasps the gravity of what he has done will understand the need to make it public.”

It’s not uncharitable to point out the scandal caused by these Catholic politicians. “The Church’s unity is founded on speaking the truth in love. This does not destroy unity but helps to repair a breach in the life of the Church.”

Archbishop Burke rejects all the standard arguments made by Catholic politicians and their apologists who support abortion and same-sex marriage. For example, the defense of the unborn and traditional marriage is not strictly a matter of religious faith. “The observance of the natural law is not a confessional practice – it’s inscribed in every human heart.”

Archbishop Burke describes the latest tactic of pro-abortion Catholic politicians, who talk about finding common ground, as a form of “proportionalist moral reasoning.” “Common ground is found rather on ‘the ground of moral goodness,’ and not in a compromise of certain moral truths, like the rejection of abortion and euthanasia.”

He warned against allowing this kind of false reasoning to enter the health-care debate. A Catholic cannot accept the attainment of universal health care if it includes abortion and other evils “just because it achieves some desirable outcomes.”

In this form of reasoning, the archbishop hears an echo of the type of “seamless garment” argument that conceals a distinction between intrinsically evil acts and those that may be evil in some situations; these acts “are not all of the same cloth.”

The standing ovation for Archbishop Burke lasted several minutes before Raymond Arroyo, the master of ceremonies and news director of EWTN, returned to the podium. Once again, as Hanna put it in his introduction, Archbishop Burke had “stood up for the Church and her teachings, in the face of violent world criticism and even some within the Church.”

As editor Brian Saint-Paul handed Archbishop Burke the award for “Service to the Church and our Nation,” I commented that, “This lion speaks with the voice and face of a lamb, and, thus, is an example of how to speak the truth in charity.”