Consider for a moment the vast sum of money that everybody in your community spends on insurance of various kinds. Business, home, auto, health, travel, and life insurance
for everybody in the neighborhood add up to a major chunk of change
being exported to big corporations who are probably not based in your
town nor focused on your best interests.
Now, other than the meager salaries of a few agents, how much of that money comes back into town? There are occasional payoffs. That's why we buy it. But in the big picture, the majority of the funds go to the insurance companies. That's how they stay in business.
In fact, insurance is very much like the casino industry stripped of the entertainment. You bet against yourself at odds set by the company and the house always wins. Oh, they'll make a big deal about paying off for an accident or tragedy once in a while. Then they'll quietly raise your rates.
Where does all that money go? Insurance executive salaries are measured in millions, sometimes tens of millions of dollars. A lot of money is invested in the advertising that makes certain geckos and ducks so recognizable. They spend ungodly fortunes lobbying politicians to keep their gravy train running.
Why do you suppose, at a time when the majority of Americans supported Single Payer Health Care, the option wasn't even discussed in Congress? Even the watered down public option was defeated and instead we got a constitutionally questionable mandate to buy private insurance . The lobbyists who won that battle were paid by your insurance payments.
If you're rich enough, you can step out of this game and self insure. Wealthy people can demonstrate their ability to cover their liabilities and continue to collect interest on the funds. Those of us who don't control such pools of capital are forced to pay the insurance company for being rich enough to back us up. Insurance is one way the rich get richer by making the poor poorer.
Absolute poverty is a way around the insurance racket. When you've got nothing, you've got nothing to lose. But this route does require accepting new realities. If you keep driving around in an uninsured car, you may wind up in jail. And if you get ill without insurance, you may die untreated. However, if you get rid of the car, you'll get regular exercise walking and biking and be less likely to get ill. The odds are on your side if you choose poverty over insurance.
This approach breaks down in a more social setting. Most of us can handle responsibility for our own choices, but what about our liabilities to those with whom we interact? It is in the best interest of each community to protect all members from financial ruin resulting from reasonable risks. As long as we live in a capitalist system, we need insurance, but we don't need to buy it from ethically questionable corporations.
Let's go back to that big pile of money your neighborhood is spending on insurance. What if you pooled that into a local mutual fund, democratically controlled by the people who pay into it? It wouldn't take long to capitalize the venture to the satisfaction of the state insurance commissioner. Imagine the benefits of keeping all that money in town.
Maybe that just translates to lower insurance rates. Maybe it means adequate funding for community services like libraries, schools, fire departments, and swimming pools. Maybe small businesses have an easier time getting affordable loans. It could be invested in locally controlled ventures that used local resources at sustainable rates to meet local needs. These are decisions to be made through democratic processes by the people who pay into the mutual fund.
To help this happen, I'm going to circulate a questionnaire in my community. Please feel free to use these questions to determine how to build a mutual fund in your area.
- What is your zip code?
- How much do you spend each month on each type of insurance?
- If a local mutual fund offered the same or better coverage and rates on all your policies, plus an opportunity to participate in a democratic process controlling the fund, would you probably switch?
- If you hesitate to say you'd switch, please explain why.
- When we form the mutual fund, how would you like to be notified? Please give contact info.
- If the data from this survey is positive enough, it is the intention of the author to form an organizing committee to meet with the State Insurance Commissioner. Would you like to be part of the committee?