Heath Insurance and Primal Thinking

We’ve been hearing the term “moral hazard” quite a lot these days. But as a former foot soldier in the insurance claims battlefield (quagmire), I can tell you with utter certainty that moral hazards have been alive and thriving for quite some time. First, a quick primer…

A moral hazard is simply the notion that an individual or group will behave differently – and quite often carelessly – in situations when they perceive they are insulated from risk. This “letting down of their guard” paradoxically increases their likelihood of falling prey to the very hazards that they were trying to avoid in the first place.

A perfect example of this is health insurance. Regardless of whether it’s provided through a private plan or by a publicly administered (government) program, health insurance sets up a number of dangerous dynamics that create moral hazards for the majority of policyholders:

Falsehood #1 – Health insurance guarantees that you will be quickly and easily restored to a previous condition of optimal health and physical vitality

This erroneous thinking stems from the over touted concept of “indemnification” which is the staple of insurance policies. This concept can be successfully implemented with damaged property such as a house or a car. But the human body consists of living, biological tissue. And once damaged, it can never be completely restored to a pre-loss state.

Yet people still continue to live their lives believing that it can…

Falsehood #2 – Health insurance is a basic human right in a well-functioning society

Again, this is fallacious thinking that is based upon a dependency mindset coupled with an entitlement belief – two very anti-primal ways of thinking. The real truth is that health insurance is just a nebulous promise that total strangers will attempt to ameliorate your physical and mental ailments – and that they will do so because other total strangers have agreed to compensate them. And anyone who believes that these “social contracts” are inviolate is suffering from an advanced case of “cranial-rectal inversion.”

The key is, take advantage of health insurance if you have access to it, but never rely on it to “make you whole” or to provide you with peace of mind. Genuine peace of mind is accomplished by taking complete ownership over one’s own personal health and fitness, and by developing a mindset that assumes there is no cradle-to-crave “social safety net.”

Because in the real world, you only find safety nets at the circus.