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Thursday, March 29, 2012

The problem was always having insurance companies involved
Posted by Jill | 5:52 AM
I've always had health insurance. When I was in my early twenties and struggling to support myself in my own apartment on $8500 a year, I still got medical care. I'm lucky in that I've always been pretty healthy, so I've never needed a lot of care, but I've always gone to the gynecologist every year, and there's always been the occasional cold. Back then, paying for care happened in one of two ways: either the doctor's office would file the claim directly with the insurance company and then send me a bill for what wasn't paid (usually there was a deductible of about $100 or so), or else I'd front the money and then I would get an insurance company check.

Somewhere along the line it all changed, largely coinciding with the rise of the HMO. The HMO sounded like a good thing -- you'd have a primary care physician who was a "gateway" to any specialists you might need, but s/he was always in the loop. The problem was that your primary care physician had financial incentives to NOT refer you to specialists. But even if you weren't funnelled into an HMO, the network and co-pay became a part of every health plan with the creation of the Preferred Provider organization. Participating physicians were paid a "negotiated rate" if they were in-network, and there was an incentive to be in a network because fewer plans were offering out-of-network benefits. This meant that doctors had to see more patients to bring in the same income, and that led to the five-minutes-and-out medical practice that we see today.

And with all this, the cost of even basic healthcare started to skyrocket anyway. If you actually looked at your medical plan statements, you saw the regular office visit that used to cost you eighty bucks was now three hundred...and the doctor still got the same eighty bucks, branded as "usual and customary." Maybe you were making just a $20 copay every time you went to the doctor, but behind the scenes it was a very different story.

The problem isn't just health insurance company profits, though 2011 was the third straight year of record profit for the industry. After all, the goal of any corporation is to maximize profit and return to shareholders, and most health insurance companies are publicly-held entities. The problem is that health care is something that you need when you need it, and it's not something that you can safely "go without" if money is tight. Doctors should make a profit for performing services that require special skills and nonstop education. But what, exactly, do insurance companies add to the equation for day-to-day health care? Of course you need insurance for serious health issues and surgeries, but for those things for which most of us use the health care system, what do they really add compared to what they cost?

When I was laid off from my last job, it would have cost me $13,000/year to pay the full premium on the insurance policy that I have for Mr. Brilliant and me. This year the plan I had been in at my current job had a full premium of almost $16,000 for the two of us, out of which I would have had to pay $3800 in premiums. This plan is being eliminated next year, so I decided to bite the bullet, take the high-deductible plan with the Health Savings Account, and pay myself a good chunk of the premiums I would have otherwise paid to an insurance company. My preventive care is still covered at 100%, but the oral surgery I'm going to need is going to be subject to a $2750 deductible. That is the best scenario in today's health insurance market.

And this is where President Obama and cowardly Congressional Democrats screwed the pooch on the Affordable Care Act. But taking single-payer off the table right at the beginning, and then scrapping a public, nonprofit option just to get Queen Olympia Snowe, who complained yesterday that Obama hadn't been nice enough to her, to vote for the thing and allow it to be "bipartisan", led to the debacle we're seeing in the Supreme Court, where Roberthomascalito had clearly already decided to knock down the insurance mandate before hearing a single argument.

The rationale for the insurance mandate makes sense if you're going to assume that businesses whose goal is maximization of profit and minimization of cost are part of the equation. As with any insurance, it's all about spreading the risk around. The problem was in making for-profit businesses part of the equation in the first place.

I'm sure there are still those who believe that this whole theatre of "Obamacare" was part of the mythical Obama Eleven-Dimensional Chess Game, in which what he wanted in the first place was single-payer and once an insurance model is struck down, he can go back to the drawing board and get what he really wants. But if the word coming out of the White House is true, ACA really WAS what Obama wanted, and the White House Bubble has never even considered the possibility that an obviously partisan Court would strike it down.

The insurance industry is all ready to do whatever is necessary to sustain its profitability, because of its obligation to its shareholders. So it's going to be extremely difficult for this president, faced with a country full of parents of unemployed adult children, to explain why their children are no longer covered, and why he didn't fight for what was right in the first place, instead of trying to make nice with people who would string him up from the nearest tree if they thought they could get away with it. And as for Mitt Romney, well, if you have a pre-existing condition under a Romney administration and you lost your insurance because you lost your job, well tough shit for you:

During an appearance on NBC’s Tonight Show, host Jay Leno told Romney that he knew people that had never been able to get insurance before “Obamacare” was passed.

“It seems to me like children and people with preexisting conditions should be covered,” Leno noted.

“People with preexisting conditions — as long as they’ve been insured before, they’re going to continue to have insurance,” Romney explained.

“Suppose they were never insured?” Leno asked.

“Well, if they’re 45 years old, and they show up, and they say, I want insurance, because I’ve got a heart disease, it’s like, `Hey guys, we can’t play the game like that. You’ve got to get insurance when you’re well, and if you get ill, then you’re going to be covered,’” Romney replied.

And if not? Then Alan Grayson was right all along:

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Blogger Nan said...
You know who gets to pay those fees that insurance companies think are too high? The $300 office visit that Blue Cross will only give the doctor $80 for? Everyone who doesn't have insurance. If I go to the doctor, I cough up a $30 co-pay; if my uninsured friend goes, he or she will be obligated to come up with ten times as much. That's how the medical profession makes up for the difference between what the insurance companies will pay and what the doctors think their services are worth.

Anonymous Anonymous said...
i knew alan was right the moment he said that. truer words were never spoken.

mrs. jp

Anonymous Anonymous said...
This is ONE THING that nobody (are you listening, MSM?)ever called the Repubs on: that if they were against the Affordable Care Act, what was their solution to the health care crisis? And essentially their answer is: "We don't have one. Back to the same old shit". Wonder how all those Teabaggers will feel, if the ACA is struck down, when they start getting jacked around by Ins Cos, just like in "the good old days."

Yep, the Repubs are very good at the Distraction Game. They scream "We're agin it! The sky is falling!" So much so, that everybody is distracted by the noise, and don't notice the Repubs have NO solutions other than to "Stay the course"...which makes their campaign contributors very happy....too bad for the rest of us, eh?

Anonymous Ted said...
Anon 2,

Wrong question! The repubs deny that there is "a health care crisis". Mr Bush himself said that any American who wants it can get health care -- in the EMERGENCY ROOM.

For those low lifes who can't PAY for health care, well ... They can stiff the hospital and ruin their [probably] already bad credit, suffer the indignity of debt collector calls, declare bankruptcy, lose their underwater house [which they shouldn't have bought with a mortgage they can't afford, anyway!].

Blogger Buffy said...
"You’ve got to get insurance when you’re well, and if you get ill, then you’re going to be covered,’” Romney replied.
People like Romney make it sound so simple--especially when they're getting premium insurance coverage on the taxpayer's dime.

What if you were born with a condition, and were never "well"? What about the fact that insurance companies consider even the most innocuous things you may have previously been treated for a "pre-existing condition" and cause to reject you? What if your employer doesn't provide insurance and doesn't pay enough for you to afford your own? Etc, etc, etc.

We really need universal, single payer insurance. Letting private,for profit corporations run it all, is indeed the root of our problems.

Anonymous CC said...
Mortality is a pre-existing condition.

Oops, no coverage for you.

Anonymous Anonymous said...
Well Ted, you're right. I forgot about that: the "Ronald Reagan Syndrome":there are no problems, everything is sunshine and roses--well, at least when Repubs are running things, right?

Anonymous Anonymous said...
Army brat, US Navy vet. cradle to grave government health care from the finest health care system in America, the VA.

Blogger BadTux said...
One thing I want to point out: Insurance companies are not the cause of the high cost of health care in the United States.

Let me repeat that: Insurance companies are not the cause of the high cost of health care in the United States. If you eliminated every single insurance company and went totally single-payer with Medicare For All, you would reduce health care costs by 6%. That's the percentage of health care costs that go to insurance company profits.

If you want to know the cause of high costs, look at doctors, hospitals, and drug companies that treat people for deadly diseases, where they literally can say "your money, or your life." I.e., if you don't get the treatment you need at the price *they* demand, you are *dead*. Heart surgeons are millionaires. Family practitioners, who can't say "your money, or your life", drive old Toyotas and Chevrolets.

So now you know. Insurance companies are evil, of course. But they're not the cause of the high cost of American health care. Just sayin'.

- Badtux the Healthcare Economics Penguin

Blogger Jayhawk said...
Nan referred to, "The $300 office visit that Blue Cross will only give the doctor $80 for?" Therein lies the problem, and it isn't the insurance company, it's the whole system, and more the doctor than the insurance company. Insurance company pays $80, cash customer pays $300, when what should happen is that everyone pays $100. That a seller should be able to charge two different prices is appalling.

I had surgery not long ago, and on the bill was $300 for a heated blanket which was on me for less than five minutes. $300. Is that the fault of insurance companies?

You're right that it's about profit, but don't stop at insurance companies. In fact, they are the smaller issue by far. "Record profits" or not, their profit margins are in the 7%-9% range, while hospitals are in the 30% range and drug companies make 40% profits.