Hoax or Reality? Both!!!!

I think I am finally getting my arms around health care reform.  Since we do not yet have a bill to laud or condemn, as the proposed health care reform is still sitting in committees in the House and the Senate, allow me to try to explain what President Obama and our lawmakers have so far failed to communicate to us.

There is an article on CNN about Wendel Potter, the former Cigna executive who quit and then blew the whistle on Cigna’s dubious practices:

http://www.cnn.com/2009/POLITICS/08/12/health.industry.whistleblower/index.html

This “purging” of policies, i.e. raising the premiums so high on existing policies because the costs are escalating as well, forcing the insureds to cancel their coverage and find another, more cost effective coverage from another company,  is the general rule of thumb of insurance companies.  Unfair?  Maybe.  However, that is the definition of capitalism, i.e. cut your losses and let your profits soar.

The insurance companies are NOT utilities, which are regulated by the government to contain costs.  Of course within the health care industry, physicians fees and hospital charges have been regulated for years, based on Medicare rates.  Why not the insurance premiums?  The insurance lobby has an enormously strong lobby and they play all the right games to ensure their independence.  On the other hand, it is the insurance companies’ job to calculate exactly what their profits will be.  Higher utilization of medical services on one plan, perhaps due to an older  (in age) employee pool, of course would influence the insurance company from wanting to keep that policy on the books. But they are a private industry and they are entitled to take those actions that ensure their higher profits.  You might even say that they in fact have precisely that obligation to their shareholders.

Now the question becomes one of extending regulation to the health care insurance industry.  Certainly without a public option and probably not without a single payer system, can health care costs and premiums be affordable.  Insurance companies perpetrate a hoax on us Americans.  They promise us that they will be there with a fair financial settlement in times of crisis, such as a hurricane, a house fire or a car accident.  Often times, they do keep their promises and pay out exorbitant amounts to cover such catastrophes.  But here is my gripe: after Katrina hit, my home insurance went up almost twofold.  I don’t live in the area affected by Katrina nor do I live in ANY area subject to hurricanes.  Furthermore, I have had no claims with my insurance company on my house.  However, their losses were so high from Katrina, they passed it on to ALL of their policyholders.  This, to me, is not insurance because if  I am being bilked in premiums for other peoples’ misfortunes, I might as well have had the disaster myself.

This is where the health care reform gets iffy.  Ninety percent of delivered healthcare is for normal, preventive care; not for catastrophic reasons.  For those of us who just require this regular care, basically maintenance  for healthy living and not serious illness, we are paying the same rates as those who have terrible, hugely expensive illnesses.  The hoax that is being perpetrated by the insurance industry is exactly this: if the policyholders pay such exorbitant premiums while they are healthy, wouldn’t it make more sense for individuals to save up their own money that would normally go into coverage?  Of course, this is the crux of the “risk business”.  Read this article from the Washington Post today for a real life example of this hoax:

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/12/AR2009081203390.html

The only alternative for people like this couple cited in the article would have been to experience some disastrous illness early in their long term policy.  Otherwise, the money they paid into them policy is gone for naught.  Once again, the chances of the risk industry can play havoc with our own personal financial well-being.

The word “socialized” takes on real meaning when the healthy, lucky people are being asked to foot the bill for the ill, less fortunate people.  This health care reform is such a complicated matter.  For realistic answers, we need to revisit the Clinton health care proposal, based on the Jackson Hole model:

In theory, it would band employers and individuals into large cooperatives to purchase health insurance, giving small businesses and individuals the same bargaining power as big companies. On the other end, it would force doctors, hospitals and insurers to form partnerships that would compete for the cooperatives’ business, each trying to offer the highest-quality but least-expensive health plan.

The thinking is that such competition — overseen by a National Health Board establishing standards for benefit plans — would hold down medical costs yet improve health care. As for Americans currently uninsured, contributions from employers and the Government would allow them to join a cooperative.

Two of the principal advocates of managed competition are Alain C. Enthoven, a professor of economics at Stanford University, who began formulating these ideas back in the 1970’s, and Dr. Paul M. Ellwood, a pediatric neurologist from Minnesota who is widely considered a father of health maintenance organizations.

This program called for HUGE pools of people, thus spreading the risk factors and keeping costs down.  This is the only way health costs and premiums can maintain some semblance of affordability.  Why aren’t the insurance companies subject to this type of regulation?  The doctors are, the hospitals are …. if and when they choose to participate in those specific plans.  The risk must be spread out and that can be accomplished only with the creation of large risk pools.  Furthermore, if we still make employers the responsible parties for providing their employees with coverage, the only way these employer plans can survive is by becoming part of large risk pools.

I do not know if the public option is enough to regulate our insurance industry, or if we really need a government sponsored plan with a single payer.  At any rate, the insurance industry needs to move over into the “service industry” and be treated just like a public utility.  Public utilities do just fine in terms of delivering needed services AND in terms of reasonable (but not gluttonous) profits.  As for the feared term “socialism”, that’s what government’s role must be: regulating certain industries for the benefit of the greater good: not necessarily a total takeover, but some common sense regulation.  There is no benefit to regulate health care providers, such as physicians and hospitals, without also regulating the process of allowing for the care in the first place, the insurance companies.

In the meantime, Congress has got to move to get these proposals OUT of committee and INTO the White House.  Then President Obama can publicly “out”our present farce of medical coverage and get on with the business of real reform and regulation.

POSTSCRIPT:

I am exhausted by and fed up with all this health care reform talk.  Even understanding  just how complicated this matter is, I am still very upset by the pulling and pushing of both sides and the nastiness that has entered into the picture.  The American people need a new way to deal with the costs and delivery of health care.  We can not do it on our own in our old way.  It is NOT socialism to have the government step in and assist the actuality of a fair and just system.  It is, however, PLAIN AND SIMPLE NEGLECT for the government to throw up their hands in uselessness and just toss the issue back into the arena of the insurance companies.

Advertisements

Tags: , , , , , , ,

One Response to “Hoax or Reality? Both!!!!”

  1. lou Says:

    I’m right with you on this. Health care is killing us. My agency is facing a 23% increase in premiums for next year. That’s a $1.4 million dollar hit!! All people need affordable insurance. I laugh when I hear people complain that they don’t want the gov’t involved in their health care. Check out these numbers: 47 million people on medicare, 40 million people on medicaid, 5.5 million vets getting health care from the V.A. 1 million teachers who are funded by the state, all federal, state city employees, 1 million postal workers (3rd largest US employer behind the DOD, and Walmart) over million active duty military, all of the above categories and their retirees…. that’s around 100 million who get their health care funded directly or indirectly from the government. Add in all of the above dependents( a family multiplier of 2.5, the number used by gov’t in planning for emer.services) and I estimate that brings the total to around 250 million!!! There’s around 300 million citizens. So that leaves the uninsured, illegal immigrants and the wealthy who may be self funded,so we are already funding health care through the gov. What’s the big deal.

Comments are closed.


%d bloggers like this: