Rich Galen

Ever since the White House announced its new rules on requiring employers that provide health insurance to provide contraceptive services with no additional cost to their employees.

I understand this is broadly interpreting the rule, but I am not going to discuss the policy, religious, moral, or any other aspect of the rule itself.

It apparently only came as a surprise to the White House when conservatives and Catholics (among others) rose up in vocal opposition on the grounds that charities run by religious organizations - like hospitals - would have to provide a specific insurance benefit which is contrary to their religions tenets.

Others have debated the pros and cons of that in other venues and I won't get into that again here.

The White House hurriedly announced a "compromise" which is an odd construct in that like Republicans in the House and Senate during the writing of the underlying health care legislation, only Democrats were involved.

The Administration backed away from its original proposal to the extent that religious charities still have to offer the services but are not required to pay for them. The insurance companies have to provide the benefit at no cost to the employer or to the employees.

That's the part I don't understand.

Insurance companies offer insurance. Insurance - again broadly written - is taken to mean that a person or organization ("The Insured") pays the insurance company a sum of money ("The Premium") to provide financial protection against loss ("An Insurable Event.")

If you have automobile insurance, the premium you pay is so the insurance company will pay to get your car repaired if you have an accident. If you have health insurance the premium goes to pay for some, most, or all of a doctor's visit, prescriptions, and/or a medical procedure.

Insurance companies make money because they have very smart people, "The Actuaries," who are very good at math and figure out how much the company has to charge to make sure the income ("The Premiums") exceed the outgo ("The Outgo").

Some insurance companies are dreadful at this. There was a famous case a few years ago involving an insurance company named AIG ("The Mathematically Impaired") that provided insurance against losses for those who were investing in mortgage-backed securities ("The Worthless Crap.")

When the financial melt-down occurred, based largely on the worthlessness of mortage-backed securities, AIG ("The Welcher") couldn't pay off all its policy holders ("The Welched") and so you and I ("The Powerless") kicked in $85 Billion and got 80 percent of company in return.


Rich Galen

Rich Galen has been a press secretary to Dan Quayle and Newt Gingrich. Rich Galen currently works as a journalist and writes at Mullings.com.