28 November 2007

Walmart & Healthcare

Walmart Watch has a piece up on a Walmart employee who was hit by a semi and left brain damaged. The store paid out half a million in healthcare costs, and the family sued the trucking company so she could get nursing home care. The family won about $400,000, which Walmart promptly sued them for, since they had a subrogation clause in her health insurance policy.

What? You don't know what subrogation means?

I'm pretty sure that's part of the point. You're not supposed to know.

Walmart is cast as the bad guy in most of the blogging on this, but in fact they're not alone. Obviously we're the bad guys too, if we can't rid ourselves of a healthcare system that ruins people but protects big business and profits.

Oh, but it's not feasible according to MoveOn, ProgressNow, and the Dems.

So, taking a page from ol' Mitt Romney's playbook, the so-called progressives turn to mandates — which force people to buy junk insurance from an industry that has proven itself to be incapable of providing healthcare at a fair cost but very good at making profits.

How would Deborah Shank's family have fared under mandates? No difference. None at all. The Shanks' had insurance. They're still ruined.

Mandates are a sham. Subsidization of a corrupt private, for-profit industry.

Fascism, in fact.


Anonymous said...

The problem in my view goes back to the trucker who hit this poor woman. What silly rule let him on the road without the insurance to take care of his malfeasance?

Andrew Oh-Willeke said...

The trucking company had much more insurance than a typical Colorado driver and more than any state that I am aware of mandates, about $1,000,000. But, very high compensatories rendered it moot, and ERISA kept traditional state laws invalidating the particularly punitive subrogation provision in the Walmart plan from applying. The women's attorney also probably malpracticed by not addressing subrogation up front.

But, the real solution is independent of the form of universal health care adopted (i.e. single payer, mandates, etc.). The solution is to make health insurance primary to all other forms of recovery for medical expenses. Individuals would have no cause of action to recover medical expenses and would never be subject to subrogation rights for medical expenses covered by health insurance. Ditto worker's compensation.

Without the need to sue for past or future medical expenses, the cost of tort litigation and the exposure of parties in it would be greatly reduced. Health insurers would still be permitted to bring separate subrogation suits for their medical expenses only, but those suits would be completely separate. Health insurers could benefit from collateral estoppel (i.e. bind the negligent party to a fault finding) in cases where the negligent party goes to trial and loses in the face of an individual's suit, but would have to prove fault themselves in cases of a settlement.

The resulting cost savings in car insurance, liability insurance (often as part of homeowner's insurance), medical malpractice insurance and worker's compensation insurance premiums from having health insurance as a primary and sole source of medical reimbursement for medical car would compensate a great deal for costs associated with covering more people. It wouldn't be the full nine yards that you get in single payer, but it would have an immense impact.