A little over a year ago, Brian Thompson of Maple Grove, Minnesota, was murdered in a cold blooded, cowardly attack, shot in the back while unarmed.
If you have seen anything about this on social media, you will know that too many Americans celebrated this murder. You will know that too many Americans justified it. You will know that too many Americans were unable to condemn it without adding some usually garbled diatribe on health policy. And even if you aren’t on social media, you are probably aware of just how widely this cancer of tolerance for political violence has spread in America: it was, to give one example, material for “bits” on the late night talk shows whose hosts claim to be the moral conscience of the nation.
Brian Thompson had two sons, aged 16 and 19, who both attended Wayzata High School. One wonders how they felt watching Jimmy Kimmel cracking his audience up with a routine about how hot his staff found their dad’s alleged killer?
Those boys don’t get thought about very much. Last week, someone did devote some thought to them. Michael F. Cannon, Director of Health Policy Studies at the Cato Institute, penned “An Open Letter to the Thompson Boys” on his Substack. I post it below with his permission.
To the Thompson Boys:
My deepest condolences to you and your mother on the loss of your father, Brian.
You and I have never met. I don’t think I ever met your father. I don’t have (or want) any connection to the company he led. I’m just a stranger. Nonetheless, I hope you will let me share a perspective on your father’s work. I am making this an open letter because there many others who also need to hear this:
The company your father led does an incomprehensible amount of good. You should be immensely proud of his contribution to those good works.
I’m sure you know by now that not everyone agrees. Those who disagree have a right to their hurt and their anger and to tell their stories. Unfortunately, in most cases they are misdirecting their anger.
Health insurance companies have a short-term incentive to save money by not keeping their promises—by refusing to pay for necessary medical care. Unless some other force intervenes, though, they can only get away with it for as long as their customers, competitors, and the courts are willing to tolerate. In the long term, reneging on their promises means they lose money.
Government intervention flips that situation on its head. It turns the short-term incentive that insurers face to deny coverage into a long-run imperative. When people criticize health insurance companies, in most cases it is for actions that government interventions put unrelenting pressure on those companies to take. Without those pressures, health insurance companies could and would do even more good.
Your father’s company is proof. It has been a pioneer in trying to help the sick despite bad laws that stand in the way.
I teach my sons and daughter that a business is a place where people help others. The company your father led helps people in the best way. When others are sick, vulnerable, and afraid, your father’s company buys them medical care.
Jeanne Balvin was eleven years older than your dad when a painful and dangerous illness struck. She needed surgery, fast. Surgery can cost more than most adults earn in an entire year.
Your father’s company paid for Ms. Balvin’s surgery. That’s the #1 thing health insurance companies do: they buy medical care for sick people. The role they play in healing the sick is every bit as important as that of doctors.
When you think about it, health insurance companies are a marvel. They get complete strangers to pay each other’s medical bills.
Every year, lots of people like Ms. Balvin get sick. They need medical care that they would struggle to afford. At the same time, a far greater number are afraid they themselves will get sick and struggle to afford medical care. Health insurance companies collect money from the second group and use it to buy medical care for the first group.
Those strangers may speak different languages, practice different religions, and even hate each other if they met in person. Health insurance companies get them to put all that aside and help each other. Your father’s company helps tens of millions of people to cooperate in this way.
Some will say that health insurance companies aren’t as altruistic as that might sound. The customers and the company aren’t trying to help others. The customers are just in it for themselves. The company just wants to make money. If so, that would make health insurance companies even more amazing. It would mean they harness pure selfishness to produce an unquestionably compassionate result.
A crucial part of how health insurance companies help people is that they sometimes say no.
Precisely because health insurance companies redistribute money, criminals constantly try to steal from them and their customers. Criminals submit official-looking claims, hoping to trick health insurance companies into giving them money. Saying no to those fraudulent claims protects customers and helps the company buy medical care for more people.
In some cases, health insurance companies protect their customers by refusing to pay for services that doctors recommend. Even as doctors help patients like Ms. Balvin, some doctors recommend things that do not help patients, including some services that harm patients. In many cases, refusing to pay for what the doctor recommends improves medical care—and again helps the company buy beneficial care for more people.
Doctors don’t like to hear it, but health insurance companies sometimes have better judgment about these things than individual doctors. On at least one occasion, for example, your father’s company stopped a surgeon from mistakenly operating on the wrong part of a patient’s body.
No country in the world pays for everything doctors recommend. Where countries come close to doing so, medical care doesn’t improve and becomes overly expensive. There’s a lot of evidence that, in the United States, health insurance companies should say no more often.
But health insurance companies sometimes say no when they should say yes. When a health insurance company refuses to pay, it doesn’t prevent the doctor from treating patients. But that decision often means the doctor won’t provide the care.
People who have attacked your father believe health insurance companies make this mistake too often. Some believe that such mistakes are the reason they lost a parent. Or a child. Some may be suffering as much as you have.
They’re right: health insurance companies do make this type of mistake too often. But most of the time, it is because government puts unrelenting pressure on health insurance companies to say no when they should say yes.
Remember Jeanne Balvin? Within weeks of her surgery, complications landed her in the hospital twice more. By then, she had no health insurance. Why?
It sounds unbelievable, but the government literally threatened your father’s company with penalties unless it cut off her health insurance after just three months. In the name of protecting Ms. Balvin, the government forced your father’s company not to help her.
All indications suggest that your father’s company would have been happy to pay for Ms. Balvin’s second and third hospitalizations, just as it paid for the first. As soon as the government lifted those penalties, your father’s company resumed offering insurance that would have paid for Ms. Balvin’s second and third hospitalizations.
Instead, the government required your father’s company to say no, leaving Ms. Balvin with $97,000 in hospital bills but no health insurance. Many who support those penalties compounded the problem (and dodged their own responsibility) by blaming your father’s company for the harm the government caused. The government has since reinstated those penalties, once again forcing health insurance companies to say no to patients like Ms. Balvin.
Those incentives aren’t even the most harmful ones government creates.
The government also penalizes workers if they buy insurance that continues to pay their medical bills after they leave their jobs. The result is that most people in the United States have health insurance that disappears when their job or a family member’s job disappears. As with Ms. Balvin, these penalties require health insurance companies to stop helping people—to say no—at an arbitrary point in time (in this case, when a job ends). Tens of millions of patients have fallen into this government-created gap in health insurance.
Had the government never created these penalties, that gap would not exist. Health insurance companies could and would keep helping people—keep saying yes to patients—after they fall ill, even if they switch jobs. Companies would offer lifelong health insurance, as they do today in countries like Australia, Germany, and Chile.
Here’s another reason to be enormously proud of your father: his company proved it. It filled that gap the government created. That is, until the government made them stop.
Around the time my first son arrived, your father’s company created a never-before-seen insurance product. It worked around all these penalties to keep saying yes to patients after they left their jobs—indeed, for the rest of the patient’s life. If I could, I would immediately buy one of those products to protect each of my children.
Unfortunately, by the time my other children arrived, the government had begun threatening your father’s company with penalties if it continued to fill that gap.
These new penalties, and perverse incentives they create, are the most harmful of all. They have the unintended consequence of requiring health insurance companies to make their products worse than their competitors’ products. In effect, they reward companies for denying more claims, for making doctors spend more hours getting approvals, and for creating other obstacles to sick patients getting necessary care.
One of former President Biden’s economic advisors explains that these penalties require health insurance companies to engage in “backdoor discrimination” against the sick that “undoes intended protections for pre-existing conditions.” People blame insurance companies for the results, but this Biden economist explains that these consequences of government intervention are “beyond any insurance carrier’s ability to control.”
One victim of this race to the bottom, Colette Briggs, was two years old when these penalties pushed insurance company after insurance company to refuse to pay for her leukemia care.
Why are these penalties uniquely harmful? While other government-created penalties push health insurance companies to say no to just some patients, these penalties force insurance companies to say no to all consumers. And they apply to health insurance for the elderly, the poor, workers, and nearly everyone else. Biden’s economic adviser found that these penalties leave everyone with inadequate protection, to the point where even “healthy consumers cannot be adequately insured.”
I wish I could say that is where it ends. But the government also penalizes workers unless they do business with a health insurance company that they didn’t even choose. It penalizes workers if they don’t let that company control their medical spending. It penalizes them if they fire that company.
All these government interventions give insurance companies more control over our health care decisions, create more opportunities for them to make mistakes, increase the impact of those mistakes, and reduce insurers’ accountability for those mistakes. Government intervention even penalizes the type of insurance companies that work more closely with doctors to avoid those mistakes.
Yet every time government intervention causes patients to suffer, the media and supporters of these laws blame only the company. In nearly 30 years of observing those reactions, I cannot recall a single instance in which the media have addressed the government’s role. And so anger at companies like your father’s has only grown.
I have criticisms of your father’s company. It takes too much money from taxpayers. It spends much of that money lobbying and suing the government for even more money. Here again, however, the underlying problem is that government intervention rewards such bad behavior. I hope that one day, another company will drive your father’s company out of business by doing even more to help patients. For that to occur, we will need to end those government interventions.
Despite all of that, your father’s company has still done more to aid the sick than its critics ever will. It has been a leader in trying to say yes to patients. I hope you always remember and take pride in the good your father has done. We who understand will not forget those good works, nor the pain that other people’s ignorance has caused you.
With deepest sympathy,
Michael
