How to Insure Americans with Pre-Existing Conditions
You might believe the ObamaCare offers the only way to cover people with pre-existing conditions — if you read only Colorado Public News’s misleading “fact check” on Colorado representatives and the contested health care bill. Actually, ObamaCare makes things worse, not better, for people with pre-existing conditions. Our representatives should support better alternatives.
ObamaCare requires insurers to offer a policy to any applicant, at pretty much the same price regardless of the applicant’s health or expected medical expenses. If such price controls sound wise, imagine if restaurants had to charge the same price for steaks and burgers.
Restaurants would make larger profits on burgers, but possibly lose money on steaks. They would cater to burger eaters and make lousy steaks to repel steak lovers. Some steakhouses would close. Others would become burger joints.
Sound far-fetched? Consider Colorado’s insurance market. The Denver Business Journal reports that insurers are “selling policies outside of the health realm” because ObamCare’s controls “cut into profit margins.” Because of new insurance price controls, six insurers have stopped selling child-only policies in Colorado, and Aetna has left Colorado’s individual market entirely.
Patients with pre-existing conditions would be better off without price controls. Insurers would actually want their business, and hence design products that appeal to such customers. Government should respect insurers’ right to price policies as they see fit. Instead of imposing damaging price controls, politicians could support subsidies — or better yet, private charities — that cover the increase in premium.
Such subsidies would not be as common or large as politicians let on. Very few of the uninsured are uninsurable: “less than 1 percent of the population,” writes health care economist Mark Pauly. A Department of Health and Human Services survey had similar conclusions. When last spring’s health control law created high-risk pools for the uninsurable, Medicare’s chief actuary predicted that 375,000 people would enroll. By December, only 8,000 had done so.
Even without subsidies, those paying higher premiums because of pre-existing conditions get a good deal. Professor Pauly found that high-risk customers pay “on average, about 1.6 times those of lower risks” while incurring four times more expenses.
Absent destructive price controls, insurers could address the pre-existing conditions problem with innovative products that guarantee your future insurability. For example, “health status insurance” would pay for increased medical insurance premiums that result from your getting sick. UnitedHealth’s Continuity rider is a version of this.
The best way to avoid having a pre-existing condition is to buy insurance when you’re healthy and avoid lapses in coverage. But politicians make this difficult by enforcing an unfair tax code that favors job-based insurance over individual insurance. With job-based insurance, losing your health can mean losing your job, and your insurance.
Not so with insurance you buy directly from insurers. Based on his research, Professor Pauly concludes that job-based insurance “leaves a person who becomes high risk more vulnerable to dropping or losing … coverage than does individual insurance.”
For many years — and without government mandates — many individual policies have been guaranteed renewable. Insurers could not increase your premiums or drop coverage when you got sick. This would be illegal, a violation of the insurance policy’s contract. A 1997 regulation mandated that all plans have such provisions. This makes the ObamaCare’s redundant “consumer protection” on this matter a fraudulent selling point.
Another way to mitigate pre-existing condition problems is to repeal controls that make insurance unaffordable for many. To different degrees, states outlaw economical policies by requiring that all policies cover treatments you may neither want nor need. University of Minnesota economists estimate that allowing people to buy cheaper policies sold in other states would make insurance affordable for twelve million uninsured Americans.
Like a hammer that sees every problem as a nail, many politicians think the solution to every problem is legislation that erodes our liberties. Instead, they should consider how such controls contribute to these problems, and how free markets provide solutions.
While the author posits a number of good ideas, he completely misses the point on Obamacare (aka PORCare). The intent behind that monstrosity of reckless legislation was never to insure those who had pre-existing conditions. The intent was to take a major first step towards a government controlled, one-payer system. What Obamacare will do is put the insurance companies out of business by controlling fees (downward) and mandating services (upward) such that profits will be impossible. Once the insurance companies go bust, the “benevolent” government will step in.
I agree completely. In addition, Barakycare is designed to drive corporations out of providing sick care to their employees because the fines for not doing so are much, much less than the costs of providing it.
Excellent article. May I offer my own insights as one with a “pre-existing condition,” and one that has been present since birth?
The myth seems to be that for people with a pre-existing condition, it’s absolutely impossible to get any sort of health insurance, and so nothing is ever covered. This myth flies in the face of my own personal experience.
I’ve never once been denied a policy through my employer. The worst I have ever faced is a “waiting period,” generally 30 to 90 days, during which the policy didn’t pay for any treatment related to my pre-existing condition. However, if something unrelated happened–like, say, a bad case of the flu–it was covered as normal under the policy. And after the waiting period, the incidents related to my pre-existing condition were also treated according to contracted benefits.
Even during the waiting period, when one could argue that I was denied health insurance coverage for the condition, I was never denied health care for it… I just had to pay for it myself. Claiming a lack of coverage equates to a lack of care is pretty much the same as saying that some big company denies people the ability to buy cars if it doesn’t pony up part or all of the purchase price. Just because you have to pay for something yourself doesn’t mean that you’re being denied that item.
Of course, with a story like that, I’ll never be up for an acting part in an ad supporting ObamaCare… but that’s fine with me.
My experience was that if I could get insurance, it was at such a steep price that I could not afford it (and afford to have a place to live, food to eat, and all those other things I might actually need).
The only way to make any insurance affordable is to lower the costs of providing health care itself. I don’t see that happening under any system that allows both the insurers and the providers to gouge people for their services, as all of the “for-profit” schemes for providing health care seem to do.
Health care providers have costs, and all that technology adds to those costs. But when health care is marketed and sold as a commodity, for profit, I do not see any incentive for lowering costs. The market still puts people’s lives on the chopping block of profit.
People tend to want any procedure to avoid death (which is not unreasonable), but such life-preserving procedures can also be exploited in time of need.
I don’t see this market based system as offering a solution for the problem of making the health care affordable for those who need it, not just for those who can afford to pay.
As long as health care is delivered on the basis of a fee-for-service or a procedure-based payment system, making the incentive to sell more services, drugs or procedures, rather than rewarding better health outcomes, our system will be doomed to providing the most expensive, yet ineffective health care in the world.
For instance, when drug company’s motivation is to continually increase profits for shareholders, the incentive is to push new, patented drugs rather than produce better health outcomes. Many of the newest drugs on the market provide no better efficacy than previous drugs, yet doctors are given incentives to prescribe the new (patent-covered) drugs, even when the old drugs are cheaper, and do the same job. Realize that this is only one example of an abusive situation, but it is one that is played our on our TV screens almost every day. The so-called “Free-market” does not work in all arenas of human needs, and health care is one of those areas where the free market does not work.
Actually the Free Market is the only thing that works. The problem with it is the distortion caused when government sticks its regulatory nose in. Case in point, mandating sex change coverage in all policies in a State. WTF? Also the cost shifting of mediscam to those with real insurance.
Like wise every place which has socialized medicine, it only has assured poor medicine for all. Well the rich and powerful(obama types) still get exemplary care.
As for pre-existing conditions. You could get a job at Wal-Mart and soon be covered. You could start your own business and get a group policy and be covered. Pre- obamacare I was looking at starting a group plan for my small business. Here in Oklahoma, one path is I could join the Chamber of Commerce($150.00 a year) then have access to the bargaining power of us all. Pre-obamacare the cost were $270.00 a month for me 49 years old for a top notch blue cross plan.
Sure there is some things that could be improved over the old system, but obamacare is not the answer. The fact is all those wonderful new drugs, and the facilities for access to top care for most exist because of the free market. In no place which practices obamacare/socialized medicine do they exist. Just equal access to misery and rationing. Paid for by all.
RTH, we won’t be pawns in your socialized medicine fantasy. Not only are you wrong about what works but, more importantly, I don’t belong to you or to 51% of the voters who live here. We must be free to choose our own health care in a free market, or there will be no peace. Many of us do not consider our liberty to be negotiable. And we have already had too much of it taken away. We don’t care what you think works. And we aren’t interested in your sob story (probably a complete fiction, incidentally, but either way …).
The problem with your scenario is the reality of rationing. Whereas everyone wants any procedure that will prolong useful lifespan, these procedures are a limited resource. Capitalism provides a fair means for rationing these resources – anyone with the work ethic and common sense to do so has the power to make as much money as they want, then spend that money on whatever they like, including life-prolonging medicines. Capitalism also has the side benefit of increasing the size of limited resources, bringing the costs down over time and making them available to people who were unable to produce enough money to purchase a ration of life-prolonging procedures.
If you remove capitalism, therefore, there are two effects: first, you suddenly eliminate the motivation to increase the supply of life-prolonging medicine, and second, you remove the sensible and fair rationing process provided by a free market. You still have a limited supply of life-prolonging medicines, and a potentially limitless market for those medications. Who gets them? In other words, how do you ration these things in your cash-free system?
When cash is no longer the unbiased arbiter of who gets a product, it must fall to humans to decide how the product is to be distributed. Any thinking individual can see exactly where this would lead: Sarah Palin’s “death panels.” The final question: by what measure do these humans determine which person shall be the recipient of prolonged life? That unanswered question is the one that scares the hello out of every person up in arms against the idiocy of socialized medicine.
I’m glad ConservativeWanderer has “never once been denied a policy through my employer,” despite having a pre-existing condition. Could it be because there is a FEDERAL LAW [HIPAA 1996] that group policies can’t discriminate against pre-existing conditions?! And there are some state laws that did the same thing prior to HIPAA.
I wonder how ConservativeWanderer would have done if he tried to get an individual policy?
Everyone knows that the thrust of Obamacare is to herd everyone into government run healthcare. So what is the “solution” for healthcare?
Its always more freedom. Let people pick and choose the coverage they want and can pay for. Higher deductibles, so people pay cash for their visit to the doctor, but are protected from catastrophic losses. Let people buy insurance across state lines. And, tax credits for people who purchase their own policies to put them on a level footing with people who get their insurance from their employer. Impose a mandatory $100 cash or credit fee for anyone takintg an ambulance or using emergency rooms. Exempt only those in severe trauma or comotose.
The solution for medicare/medicaid: First restrict coverage to citizens. Then give people an insurance allottment to purchase private coverage. Private insurers will control fraud, waste, and abuse. Means test medicare and raise the eligibility age to 67. Make medicaid users have an nurse/practitioner as their primary doctor.
OT but the following personal anecdote illustrates the misleading conventional wisdom about medical cost shifting etc, etc, ad nauseam, ad infinitum.
I suffer from a chronic medical “pre-existing” condition and did not have any medical insurance until I recently turned 65 (now covered by Medicare).
I would be plagued at random intervals for the last 4 years by episodes of vomiting that would sometimes necessitate visiting a “doc box” for IV fluids. This happened again 6 weeks ago and I finally received the bill. Under Medicare the cost has suddenly doubled over what I formerly paid in cash!
Schwartz is absolutely right. It is bad government policies (especially the tax laws favoring employer-based health insurance thus destroying portability) in conjunction with numerous mandates specifying prices and benefits that destroy the market for those with pre-existing conditions. The problem would essentially evaporate in a free market.
In a free society, only a very tiny minority would be “uninsurable” then and anyone who wished to contribute to private charity to pay for their medical expenses would be free to do so.
As always, we don’t need more bad government policies (like ObamaCare) to “fix” problems caused by earlier bad government policies! Thank you, Brian, for pointing out some positive alternatives to ObamaCare.
The first thing that should be done to cover “pre-existing conditions” is to remove the need for the term. In the vast majority of cases, the condition is only “pre-existing” because the patient is losing his/her insurance because of a change of employer and must transfer to a new carrier. When I change jobs I don’t have to change insurance plans for my house, my car, or my life; why do I have to change it only for health insurance? If I remember rightly, health insurance and jobs were coupled back in the ’30s in an effort to deter job changing. It’s time to decouple them again and allow people to choose their own health insurance providers.
Schwartz cites a source that claims less than one percent of the population is uninsurable. This is an important empirical question because advocates of government expansion frequently inflate that number in order to justify their proposals.
Remember the number that HHS came out with this past January? “129 million Americans could be denied coverage due to pre-existing conditions.” Sorry, but if 42 percent of the country were really uninsurable, then society as we know it would ground to a halt.
Schwartz’s one percent is much more in line with reality. And, more importantly, the rest of his reasoning is solid, too.
Is there even one government program anywhere anytime that is better than a free market solution?
There is a reason the wealth of the world has skyrocketed since capitalism became prevalent in the west. That trend is so overwhelming dramatic that it has even lifted lifestyles in regions that never had capitalism as their economic system, because even totalitarian economies get to enjoy the the inventions and innovation of the free market.
Lifestyles in the 1750′s were only marginally different than the lifestyles the Romans lived, probably lower lifestyles in many regions of the world. Were there any significant improvements in the way people lived, other than the introduction of the printing press, and easier hunting because of gunpowder? Not many.
Yet since 1750, it’s simply mind-boggling.
Government had absolutely nothing to do with it. Socialism had absolutely nothing to do with it. Marxism had absolutely nothing to do with it.
The argument of the Statists is the their sacred government control alleviates the ups and downs of capitalist economies. And they are right about that. The serfs squatting in their shacks have no ups to come down from. Just ask the people of the USSR, Red China before 2000, Cuba, and any country in Africa or the Middle East.
Anybody who falls for the statist arguments is a blind fool. But of course, 99% who fall for it aren’t thinking about what creates wealth at all. They are thinking about how much they can steal from other people.
Proreason’s comment is spot-on. Few of us are old enough to remember the days before companies and government offered insurance, days when an ordinary person could afford health care, and the local tax-or-charity-funded hospitals handled the truly indigent. The costs skyrocketed when Medicaid and Medicare became law, and thousands of small insurance companies went bankrupt. Now the U.S. faces insolvency, in large part because of Medicaid and Medicare. Is there any greater argument for free markets than this?
Obamacare is only one of many giant leaps into statism. If you combine all the increased government spending and control of everything over the past 2 years, your head explodes. Every step taken has fit the Alinsky model of overwhelming the system. I’m no ‘conspiracy theorist’, but cannot ignore the facts.
“Like a hammer that sees every problem as a nail, many politicians think the solution to every problem is legislation that erodes our liberties.”
More like – Like a politician that always sees opportunity to destroy America in order to rebuild it in the atheistic/socialist mold; most problems are created or exasperated to that end.
Haven’t we yet heard Rahm openly admit to the world the process. The goal has long been transpaarent. What is also transparent is that the GOP is only ruluctantly pushed and shoved into pretending to confront such evil, while securing their cushy lifestyles and status quo.
I think that when people who donot know what they are doing, do it anyway, it makes for trouble downstream. This is the case here, and proves the point; but being Dem’s they can never admit a mistakes. Just look at all the “ponzi schemes” the government has entered into that are truly failures. The problem with socialism is simple. What do you do when you run out of other people’s money? I rest my case.
Pre-exiting conditions aren’t a very big problem to begin with, as others have noted, and as the 8,000 people who signed up for the massive new entitlement pretty well demonstrates, but let’s suppose for a second that it is a big enough problem to require a solution.
Wouldn’t a fairly easy solution be to require insurance companies to insure anyone who has had unbroken insurance from a fairly young age? Remember, they mostly do that anyway. By making it a “requirement” it would alert young people to get insurance before they need it because they would be at greater risk of getting it once they get sick if they had neglected that cost in order to buy more clothes and fancier texting services. Insurance companies would then take that into consideration for premiums and spread the risk, since they would have no way of knowing if they (the insurance company) would be hit or not. They probably would develop a way to pool the risk themselves among various insurance providers.
Yes there are details, like what would “unbroken coverage” actually mean, what about people who become unemployed, and what age is “young”, but it still seems like a decent solution and one that would encourage responsible behavior.
Generally, I’m opposed to most regulations, and I might be argued out of this one as well, but since the libwits make such a big deal out of it, the adults probably have to come up with some kind of a remedy, so I would prefer a simple one that helps private businesses to spread the risk instead of forcing them to take anybody who walks through the door with termnial cancer and who chose to buy drugs instead of health care before it arose.
Anecdotes do not necessarily speak to the larger issues, but can be revealing. So here is my anecdote: I am a US citizen, and taxpayer, living in the Netherlands for the past 10 years. I was moved from the US by a large, international bank. I enjoyed a decent career in the Netherlands until being laid off (yes it is possible to get laid off in Europe, but my landing was “soft” when compared to the US) about a year ago. I would very much like to return to the US, but my spouse has a pre-existing heart condition, making insurance in the US virtually impossible to find at any cost. The only affordable plans available without working for a company that provides insurance (so much for encouraging entrepreneurship) are those that have massive (10k+) deductibles and exclude her pre-existing condition. By contrast, I just paid my annual premium in the Netherlands for our “plus” level of coverage, €1820 for my entire family for the whole of 2011, a €170 deductible per person and 100% coverage after that. Without that “plus” coverage, the deductible would be about €300 and dental would not be included. So although the tax burden is rather higher here, for purely economic reasons I am far better off, from a financial perspective staying here. I think our (US) system of healthcare financing is broken and it is time we started learning some lessons from elsewhere.
Lemme ask you a couple of questions, Tim.
First, how long do you have to wait for a doctor’s appointment? My mother was diagnosed with a brain tumor last year… the time between the MRI and her first appointment with a neurosurgeon was under 24 hours (the next day). And that’s in a town of approximately 30,000 residents, hardly a major metropolis.
Second, what modern treatments does your plan cover, and more importantly, not cover? Does it cover, for instance, the latest and most effective medications, or are you stuck with things out of the 1980s that work, yes, but not as well as modern medications?
The answers to those questions will, I believe, illustrate some of the other important differences between US healthcare and European healthcare.
Thanks for the questions ConservativeWanderer. As for the specifics, an appointment with the family physician is typically same or next day. In crisis situations (broken arm of a child, apparent heart attack of spouse) the response is as I expect in the US – immediate and thorough. It is more difficult to assess your question about access to modern treatments, as I do not know what is “cutting edge” in either country. One of the ways that the Dutch, and most other European (socialized), health care systems achieve cost savings is through the use of protocols. Particular illnesses or conditions have well defined treatment regimens, established by the medical associations and the (not for profit) insurance companies. This is quite similar to the protocols established by US insurers, with the support of their medical staffs, but the protocols do not differ from insurer to insurer so doctors know what to expect. And there is a much greater emphasis on preventative care. The system is far from perfect however. In order to achieve cost control, protocols tend to be fairly conservative particularly when it comes to diagnostic tests, and prescriptions are somewhat harder to get (one of my children was only prescribed antibiotics only twice before age 10, a far cry from another child born in the US who had antibiotics prescribed about 10 times before the age of 5). I was happy with my US health care, but I am happier with my Dutch health care.
But my real point, which I rather failed to make in my original post, had to do with the subject of this article: pre-existing conditions. Because of the pre-existing condition I described, it is virtually impossible for me to get US coverage for that condition. While I agree that the free market is the solution for the vast majority of the world’s problems, I am not sold by Schwartz’s argument that the market can adequately address the health care dilemma.
Thanks for the dialogue.
The life expectancy for The Netherlands is 16th best in the world. The U.S. is 36th best.
The Netherlands has the 19th lowest infant mortality ration. The U.S.? 33rd.
Holland can also boast that it has fewer suicides than America, maybe a credit to its mental health initiatives.
In every healthcare-related metric I looked up, the European countries are doing better than the U.S.
Whoever instilled in our minds that European healthcare is antiquated fooled us mightily and we need to end using that stereotype because it just makes us look STUPID and FOOLISH.
Longevity statistics are only loosely related to the quality of health care. There are many reasons, including different ways to count infant deaths, and deaths that have nothing to do with health care (i.e., auto accidents, murders, deaths related to drug addiction and lifestyle choices). This is a known fact.
To measure the quality of health care, compare survivability rates for people who get a disease, i.e., cancer, heart disease). That weeds out addicts and infant deaths. The U.S. is always near of at the top of those lists.
I’m just pointing out that these ideas that ConservativeWanderer and others have that healthcare in the rest of the world is bad are propoganda lies that they heard somewhere.
Ironically, the countries that I believe provide the best healthcare are our 2 World War II adversaries — Germany and Japan — and their neighbors. Countries like Holland, Austria, Switzerland, Denmark, Luxemburg, Norway, Sweden, South Korea, and Singapore provide as good as healthcare than the U.S., if not better — with as modern equipment and as advanced pharmaceuticals.
So I’m just saying that Northern Europe and East Asia are not the 3rd World fyi.
Depends on how you define “best,” Anonymous.
Now, why don’t ya do what proreason suggested and compare cancer survival rates? Is there some reason you’d rather not?
“In every healthcare-related metric I looked up, the European countries are doing better than the U.S.”
The truth is that the US and a handful of other countries lead the world. It’s probably impossible to tell which country has the best health care for a lot of reasons. Are you talking about health or health care…they are different. People have differentn definitions of ‘good health’. Statistics gathering differs. Diet and lifestyles matter a lot. Genetics matter a lot. Population homogeneity matters. Attitudes matter. I could come up with 40 or 50 reasons why it’s impossible to do a comparison.
And of course, the US has an entire industry dedicated to RUNNING DOWN American health and health care.
We havene’t even touched on cost. The cost stats are also distorted. There is no way to tell what Canada is actually paying for many many reasons, or the US for that matter.
So, like I said, the US is good and there are some other countries that are good. And part of it depends on what you want as well.
The bottom line for me is there is one thing for sure…competition improves everything. ObamaCare won’t improve anything.
Holland has another “solution” — large-scale involuntary euthanasia. This does keep healthcare costs down — since such a large percentage of all healthcare expenses are incurred in the last 6 months of life (the figure of 80% that often gets thrown around may not be accurate but it’s probably in the ballpark).
Belgium (where I lived for years) is very similar. It’s actually quite easy to find a doctor in Belgium and be seen very quickly — except that maybe 1 in 5 doctors are any good. (Some of the good ones are REALLY good, on a par with any in the US — but through word-of-mouth they get so many patients that it takes weeks to see them, unless you have “connections”.)
However, I cannot possibly believe we would want to pay the “they shoot horses, don’t they?” particular price for affordable, accessible healthcare.
Just a follow up to this thread (not that anyone is still reading it). I think that ConservativeWanderer was sincere in his questions to my post and I believe that I was sincere in responding to them. Each health care system has its good and bad aspects, and it becomes a matter for us to decide which elements we want to make part of our own, uniquely American system. Part of my point is that we can learn from other health care systems and do ourselves a disservice to slavishly follow one or another which may not meet the unique cultural needs of American society.
Regarding euthanasia, although I have no direct experience with this issue (thankfully) a bit of time spent on the web will quickly show how euthanasia is approached in the Netherlands. Far from being “large scale” (whatever that means) euthanasia represents a relatively small proportion – approximately 3% – of all deaths in the country. There remain strict protocols around how euthanasia is to be be managed. When we consider the proportion of medical expenses which occur in the last year of life: 77% of the Medicare decedents’ expenditures occurred in the last year of life, 52% of them in the last 2 mo, and 40% in the last month (source: American Journal of Respiratory and Critical Care Medicine) perhaps it is time to discuss these issues in a non-emotional manner.
But again, my point was not to argue the relative merits of different health care systems. It was to speak to a very personal issue: how do I deal with a pre-existing condition for which no coverage can be given? It is far too cavalier to say “too bad, live with it, pay for it”. For me this a literally a life and death matter for which there is no satisfactory answer.
TimJ;
Thank you for your insights. I have family in other areas of Europe and it’s basically the same as you describe. Yes, there can be delays in for non-emergency issues but it’s rare for people to die from these delays. Also one doesn’t have to worry about bankruptcy. There is also a much more realistic approach to end-of-life issues and the understanding that death comes to all. As evidenced by some of the posts here, it’s a very emotional topic. Too many Americans insist that no expense or effort should be spared to save a life hanging by a shoestring and to do otherwise is murder. Unfortunately, we cannot have it both ways. Unlimited medical care and unlimited money don’t come in the same package. A compromise is going to have to be reached sometime.
You’re paying the price anyway, just in taxes, lower services and loss of freedom, instead of a premium.
Some people like that. Particularly the people whose objective in life is to rule over you.
If you combine corporate, income, payroll, sales, and every other friggin tax the United States has one of the highest tax rates in the world. And freedom? LMFAO.
So we get the perrils of higher taxes without any of the benefits like people in Europe and Canada do. The worse of both worlds.
Canada is quite close, jack. Have you considered migrating?
“The only affordable plans available without working for a company that provides insurance (so much for encouraging entrepreneurship)……… ”
As noted in my post above.
Here in Oklahoma, backwards flyover Oklahoma
you can start your own business, join the Chamber of Commerce and buy a top notch group insurance plan which covers pre-existing, no medical exam. For under $300, a head.
OK here I come!
Before there was such a thing as health insurance [everybody] recieved pretty much the same levels of health care dependent upon how rural you lived….though well equipped hospitals were in nearly every county seat in America and doctors made house calls 24/7. Nobody was denied health care of any kinds to include dental and vision based on ability to pay at the time of service….and sometimes never pay cash, but barter services. High cost bills were generally always paid with the assistance of the community. The only exceptions to this was the typical [cancer cities] of the east and west coasts.
When health care insurance came along, it actually worked rather well until guess what? Yep! Labor unions demands that employers participate in paying benefits of health care insurance and retirement insurance. Geez! Does not anybody know the rest of this story?
Insurance competition shifted from individuals choices to business for quantity versus quality. On the basis of huge quantity came a risk multiple to the insurance companies that left them economically vulnerable and and grossly unfunded as the insurance pools grew larger and larger during the nations industrial revolution…and more and more labor unions demands on them.
As a result, insurance companies were forced by law to maintain more and more reserve captial to service there accounts….AND reduce their economic risks. Hello to arbitrary and circular inflated insurance costs to satisfy the capital reserve laws and make a profit….remember reducing [risks] to stay in business!
The labor unions have created this same arbitrary and circular inflation demise throughout the private sector economy for decades now, with little or no regards to the companies economic ability to control the risk created by the unions demands. Laws don’t require private sector companies outside of banking and insurance to maintain a regulated reserve capital ratio, making them ripe for union extortion.
Unionized employers and governments along with health care insurance companies are in a catch-22 position….and now Obamacare has striped the insurance companies ability (by law) to manage risk and capital reserve ratio’s without raising premium costs to some perpetual dastardlty inflated levels.
As [proreason] has repeated often, it is by this current governments design, that health care insurer’s and private sector capitalism be destroyed to benefit further advancement of central government socialism and a single-payer government health care entitlement for all citizens. The catch-22 places the traditional private sector health care insurers and capitalism system into an unsustainable position.
The absolute resolve is to exempt employer paid benefits and let insurer’s become once again competitive among individuals. This would do two things almost immediately. Reducte the costs of health care goods and serives and in return the cost of health care insurance. There would no longer be a captive non competitive market…and as the price for goods and service comes down in conjunction with insurance rates most everybody could again afford insurance…increasing clean good ole fashion competitiveness.
Health insurance and government are the problems, not the solutions.
In addition to what you say, the huge problem that insurance has injected in the health system is that NOBODY CAN FIND OUT WHAT THE PRICE IS. And even if you could find it out, insurance and government distort the prices so much that prices don’t really reflect the cost of the service.
Insurance should act as insurance; i.e., it should insure agains major financial burdens that normal people cannot pay. Annual deductables, in other words, should be many thousands, and spot deductables should be about $1,000. Than people wouldn’t be running up all sorts of unnecessary medical bills because the deductable has been met.
That is the biggest reform of all, but, of course, it will never happen, because it doesn’t give government more power and health insurers bigger profits.
So the unholy alliance will continue to eat at the core of a free country forever.
Not to tootle my own horn, but I think someone wrote on this topic over two years ago.
Thanks for sharing your article, cw.
It was very well written.
proreason….heres something else to consider. The health care industry is plagued with unionism and broad, broad fraud abuses. So broad and depp that an insurance excutive once told me in the 90′s that they’d go bankrupt employing investigators and lawyers trying to regulate and prosecute all the corruption and fraud…easier to pay up and pass the costs along to the captive insured. Thats why [A] bandaid during a hospital stay or ER is charged @ $1.17 upwards to $3.00 and soforth.
Individuals, believe it or not have more collective power to regulate health care and insurance expenses and abuses far more than the current employer paid benefits system…..according to a CEO (retired) of one of the nations top three insurers. IF this were the system, I’m told that health care costs for goods and services would drop almost overnight to at least that of the Medicare schedules. From there it would systemically decrease on the basis of national/regional competitive costs…not to exceed the Medicare schedules.
I think you are right, TT. I’ve said in other forums that the real costs of medical services, if the government got out of the way, and insurance was forced to act as insurance rather than an intermediary payor, would be less than 50% of what we pay today, possibly significantly less once innovation kicks in big-time.
It happens. There are examples: cosmetic surgery, lasik eye surgery, over-the-counter drugs, and veterinary services. What are the common themes? minimal government intervention and minimal insurance.
Government and insurance are the PROBLEMS, not the solutions.
The point of ‘pre-existing conditions’ is that they are known conditions that have a long-term known course to them. That includes long-term problems that can be known about in advance that may or may not crop up in any single individual’s case. Yet for the disease or disorder, itself, there is a known percentage chance, per year and for how long an individual has had a condition, of such treatments and care being necessary.
Instead of an ‘insurance’ model, which is an ill-form of betting on the chances of requiring care, an alternative model should be examined for those with pre-existing conditions. Thus you can pay for future treatment early on in a condition (say laser eye surger for diabetics) for pennies on the dollar and yet get an assured set of treatments years later. The companies offering this would not necessarily be insurance companies, and could even be investment groups run by patients or other medical organizations that concentrate not just on patient care but on advancing medical studies for that group with the pre-existing condition. This is an ‘investment’ model of health care for that sub-population. What you accrue, over time, are assured benefits from doctors, hospitals and other medical organizations for treatment you don’t need currently but will need at some future time. The benefit would be that as the group offering this also examines new and novel treatments there is a chance that the actual treatments paid for will not be needed. You do not ‘lose’ in this concept as you have paid for your future ‘cure’ or at least better treatment that is less costly and more efficient than what it was when you paid your money up front.
This would then allow patients with multiple conditions to join these groups at much lower cost than insurance so as to invest in their future health needs. With those conditions already covered, a more general health care set of coverage can be obtained far more cheaply as the high ticket item materials are taken off the board.
Other formulations of assured procedures would be a pure investment organization trading treatment futures from hospitals or participating physicians. A market-based investment futures system would also serve as an indicator of the general expectation for needing certain treatments at any given time. As medical practice improves treatment, life expectancy and pushing back the need for certain treatments, this gets reflected directly into a market-based system… an In-Trade for medicine, save the actual traded materials are for future treatment services at institutions participating in this. The institutions get a cash investment from those purchasing such plans with a known maturity date after which they can be utilized, so the facility or physician or organization of same, then has an income model not based only on current care but on providing future care.
Insurance is a rather poor fit for medicine, especially modern medicine in which improved treatment for known conditions can put of debilitating future effects for years or even decades. If you take better care of yourself, you then look towards the cost/benefit ratio of expecting treatment later or sooner, based on how you treat your own personal needs. You are a far better judge of how your body changes, over time, than your doctor is. That input is vital, yes, but if you have specific needs information and care help available for known conditions your utilization of them will drive down future cost or push out the expected time-frame for needing such care. You pay less, now, for future care based on your own judgment.
And as a final thought: investing in charitable organizations for helping the poor and needy with the cost of their medical coverage becomes an attractive option if you remove the subsidies and government overhead for medical care. Why? It costs less to support charity than it does government, as charities have lower overhead and are designed to specifically treat the poor, needy and those with hard to treat conditions and are thus efficient providers of health care. If you are saving money on the front end, then the back end is preparation for personal misfortune by paying into a charitable system while you have liquidity and health to ensure that it is there in case of absolute disaster to you. Not only is it a societal good, but it has personal ramifications as the availability of lower cost treatment for the poor to maintain their health then means for a less burdened system, overall, and the support of dedicated networks of people who are willing to take substantially lower pay via charity to be part of that social safety net that government is so ill at providing.
The concept is to get rid of the middle-man where possible and to have task dedicated systems for particular minority conditions where disintermediation is not immediately possible. After that the support of charities to help support the larger social good becomes possible when the savings of not having a middle-man results in a positive retention of cash in your pocket. We are the most charitable people on this planet, and if we have something that needs to be done we are very good at finding volunteers and creating support systems for them. I would much rather trust my fellow citizens on this than my government, as my fellow citizens know much about the use of liberty to help their fellow man… government is good at taking money and employing bureaucrats. I would prefer the former over the latter.
Wow, what an intelligent, civil, and enlightening discussion. It’s truly frightening that the current administration continues to take a wrecking ball to much of US society in spite of the existence of so many rational, thoughtful voices.