The health insurance companies are in business to make profits, not to provide health care. When they have a choice between paying for health care a client expects or for making a profit, they will refuse to pay for the health care in order to increase their profit. They won't admit this, because admitting it is bad for business, but it is what they are in business to do. They collect as much money as possible and pay out as little as they can get away with.
The so-called free market for health insurance does not work to provide the best benefit at the lowest price. Effective free markets of knowledgeable sellers and buyers negotiating price and service is not possible. Since most geographic areas are provided insurance by a dominant insurer and a lot of people get only the insurance offered by their employer, there is little real price competition. Worse, most healthy people buy insurance to protect them from the unknown, so they have no idea what will really happen if they get sick or have an accident. The result is that since the insured has no idea what they are buying at the time they contract for it, price competition doesn't work. The lowest price will win most decisions even if the contract limits payments below what is needed. That results in many bankruptcies for supposedly insured people who find their insurance does not provide the protection they expected.
Right now, if you have insurance, all you have is a contract for which you have to pay rapidly increasing premiums and which you can be kicked out of at the insurance company's whim. Once you are kicked out you become uninsurable. This may be hidden from you if you get your health insurance through your employer, but it applies to you also.
If you do get sick and the expense of your illness or accident is expected to be large, then your insurance policy is much more likely to be canceled. In the meantime, the prices for all insurance and for health care services are rising uncontrollably. Many people are simply priced out of the market for insurance, or are sold policies with high deductibles, high copays, and caps on the total that will be paid out. Even if you have "insurance" if you get ill you have a high chance of being bankrupted by high medical expenses. This is exactly why you purchase health insurance - to get health care if you get ill and to avoid bankruptcy if you need health care.
Government regulations that require insurers to accept anyone who applies will keep them from selecting only the healthy and from avoiding or dropping the sick. A standardized set of benefits will permit the insured to know in advance what they are paying for, and a national regulator will give anyone the right to appeal unfair denial of payments. The public option will offer a safe and reasonably priced competitor to anyone who objects to the dominant private insurer in any given area. That completion will prevent private insurers from raising premiums unreasonably.
Is there any value in private insurers developing innovative ways to collect from the insured and paying for the services required? Not if everyone is insured. That reduces the entire process of providing health insurance to a simple administrative process of collecting the money and paying it out. Innovation needs to be done in actual provision of health care services, and insurance companies can only innovate in ways to avoid payments for health care services. That eliminates the complexity of insurance policies. Customers choose the policy they expect will offer the best services for the price, with full knowledge that they are getting real insurance against the unexpected.
That deals with fairness to people who need to buy and pay for health insurance. It also cuts down on the additional costs created when insurers fight to avoid paying for people who are sick or who should be insurance by some other insurer. What it does not do is slow the increase in medical costs.
Those have to be addressed by revising the way physicians and other health providers practice medicine and by removing the unnecessary aspects to administration in getting reimbursement for services provided. Studies of best practices and wide publication of the most effective and efficient are one answer to that. Another is to make sure that when someone needs medical care, the provider knows he or she will be paid for providing it. The cost of dealing with the uninsured is effectively eliminated by providing universal health care. If all Americans are in the insured pool, the costs of paying for the uninsured are pretty well eliminated. That means there is no excuse for cost-shifting by hospitals and health care suppliers who charge the insured more to cover the expense of people who cannot pay for the services they receive.
Addendum 8/15/2009 9:24 am
Steve Benen has written an excellent post about what Wendell Potter is saying about how the insurance companies "put profits before patients" and how they are behind the current public attack on the effort to reform health care.
Wendell Potter was the top Public Relations Manager for one of the major health insurance companies, and was himself directly involved in killing Bill Clinton's attempt to reform the health care system.
Showing posts with label Universal Healthcare. Show all posts
Showing posts with label Universal Healthcare. Show all posts
Friday, August 14, 2009
Wednesday, July 08, 2009
Private health insurance is desperate to kill the "public Option".
Want to know why the public health care option is desired by 76% of the polled population and under major attack by the Congressional well-bribed and heavily lobbied minions of the health insurance industry? Paul Waldman explains:
Remember, if you don't like the public health insurance offering, you can always buy a supplemental policy of the type already sold to supplement Medicare. But then the health insurance companies would have to face competition to provide that. As it is today, most major health insurers have no effective competition in their service areas.
America desperately needs universal health care with assured coverage by a government plan. We've needed it since before the FDR era, and the private insurers and the AMA have been about to play the Fear, Uncertainty, Doubt card and overpriced lobbyists.Right now they are spending $1.2 million per day to kill national health care and the only arguments you hear against a government provided health care plan are fear based and mostly lies.
[Here is ]... one thing private insurance companies will never offer.One reason why health care costs are skyrocketing is that the "insured" are willing to pay higher and higher fees to get some improved security from their health care insurance. The insurers spread this around to health care suppliers so that they, too, have a major stake in avoiding the competition provided by an efficiently provided public health insurance that anyone can get.
The single-payer and hybrid systems in place in every other country in the developed world have many admirable features: lower costs, universal coverage, and better health outcomes. But what ought to make us most envious is their security -- it's what they have and we desperately need. If you live in Canada or Germany or France or Japan, there are some things you need never fear. You need never fear that your insurance company will tell you it won't cover treatment for your asthma because you had asthma before they signed you up. You need never fear that you will bankrupt your family because of expensive treatments for a serious illness. You need never fear that you will find yourself without coverage after your insurer dropped you or you lost your job. You might fear getting sick, but you won't fear that your life will be destroyed by not being able to pay for getting sick.
In the United States, unless you're over 65, extremely poor, or a veteran -- thus, already covered by a government health insurance plan -- you do have to fear all that. That's because the central pathology of our deeply pathological health-care system is that most of us have no choice but to get health coverage from an entity whose sole reason for being is to take our money and then try to avoid paying for our care when we get sick.
That may sound harsh, but let's be realistic: The purpose of a private insurance company is to make money, as much money as possible. In this, it's like any other business. But insurance is fundamentally different from other businesses. When you buy a soda, you know exactly how much you're paying for it. And when you take your first sip, you know whether you like it or not. If the soda company wanted to give you the shaft, it would only have two ways to do it: It could give you a bad-tasting product or charge you lots of money for it. Either way, you'd only end up buying it once.
But when you buy insurance, you enter into a complex relationship with a company that promises to pay for services you haven't yet used. You start paying it substantial amounts of money right away, but you don't actually use its service until some time in the future. You're also required to sign lengthy, intricate documents full of conditions and exclusions and legalese that few people are equipped to understand. You are at the company's mercy, which makes its incentives and inclinations so important.
The private health insurance market is dominated by four gigantic insurers: UnitedHealth, WellPoint, Aetna, and Cigna. In the last five years, these companies have combined to earn over $44 billion in profits; UnitedHealth alone has made over $17 billion in profits over that period. "On Wall Street," the Los Angeles Times has noted, these companies "showcase their efforts to hold down expenses and maximize shareholder returns by excluding customers likely to need expensive care, including those with chronic diseases such as asthma and diabetes. The companies lobby governments to take over responsibility for their sickest customers so they can reserve the healthiest (and most profitable) for themselves."
[Highlighting mine - editor]
Remember, if you don't like the public health insurance offering, you can always buy a supplemental policy of the type already sold to supplement Medicare. But then the health insurance companies would have to face competition to provide that. As it is today, most major health insurers have no effective competition in their service areas.
America desperately needs universal health care with assured coverage by a government plan. We've needed it since before the FDR era, and the private insurers and the AMA have been about to play the Fear, Uncertainty, Doubt card and overpriced lobbyists.Right now they are spending $1.2 million per day to kill national health care and the only arguments you hear against a government provided health care plan are fear based and mostly lies.
Monday, July 06, 2009
Krugman discusses the cost of universal health care
From today's New York Times:
Those are the remaining roadblocks to America having a semi-modern health care system.
Let me start by pointing out something serious health economists have known all along: on general principles, universal health insurance should be eminently affordable.The problem now is the "centrist" Democratic Senators. That and the fact that Senators as a group are not the brightest bulbs in the box. They react to the people who actually get in touch and talk to them, preferably to donate money. Can they actually learn that their older attitudes will no longer protect them in office the next time they run for election? Can Harry Reid get aggressive with them?
After all, every other advanced country offers universal coverage, while spending much less on health care than we do. For example, the French health care system covers everyone, offers excellent care and costs barely more than half as much per person as our system.
And even if we didn’t have this international evidence to reassure us, a look at the U.S. numbers makes it clear that insuring the uninsured shouldn’t cost all that much, for two reasons.
First, the uninsured are disproportionately young adults, whose medical costs tend to be relatively low. The big spending is mainly on the elderly, who are already covered by Medicare.
Second, even now the uninsured receive a considerable (though inadequate) amount of “uncompensated” care, whose costs are passed on to the rest of the population. So the net cost of giving the uninsured explicit coverage is substantially less than it might seem.
Putting these observations together, what sounds at first like a daunting prospect — extending coverage to most or all of the 45 million people in America without health insurance — should, in the end, add only a few percent to our overall national health bill. And that’s exactly what the budget office found when scoring the HELP proposal.
[...] [Krugman explains specific provisions of the plan together with costs, and compares it to the costs that America is currently on looking towards having to spend under the current system.]
So fundamental health reform — reform that would eliminate the insecurity about health coverage that looms so large for many Americans — is now within reach. The “centrist” senators, most of them Democrats, who have been holding up reform can no longer claim either that universal coverage is unaffordable or that it won’t work.
The only question now is whether a combination of persuasion from President Obama, pressure from health reform activists and, one hopes, senators’ own consciences will get the centrists on board — or at least get them to vote for cloture, so that diehard opponents of reform can’t block it with a filibuster.
Those are the remaining roadblocks to America having a semi-modern health care system.
Monday, June 22, 2009
Here are a few things I want to see in health care reform - given the absence of single payer
Here are a few provisions I'd like to see in whatever bill passes short of single payer.
One thing that would help is a single universal health risk pool. A private insurer who operated in the Health insurance market would be required to accept any applicant, regardless of prior history, and would be forbidden to selectively rate up any applicant.
Add to that "risk adjustment" and the health insurance system would be operating pretty much on a level playing field. Everyone would be forced to make their money by paying lower health care costs. There's a lot of room for innovation in that.
Also we need a single standardized definition of the terms used in medical billing, so that physicians and hospitals would have to hire only enough clerical staff to deal with one basic system billing system. The idea that every insurance company has its own system is simply a ploy to lock in health care providers to that insurance company. Any efficiencies found in medical billing could go to physicians and hospitals or to the insurance company. That's another incentive to lower costs and streamline the billing system. It would also lower what it costs to run administration for medical billing in the physicians and hospitals.
I am assuming that insurance companies will be allowed to sell supplemental insurance policies that cover costs above what the standard benefits the new health care system will provide, but such policies should clearly be add-ons to the normal insurance, not included in as part of the normal insurance like the private insurance companies offering Medicare benefits do today. That way the purchasers would know what they were paying and could see whatever additional benefits to supplemental policy provided. Again, the cost of health care needs to be up front and transparent as much as possible.
I'd also like to see a single universal appeals board for all denials of payment, private and government. Without that standardized appeals system the patients have no real recourse usually, which is why the insurance companies have been able to get away with the rescissions.
Sweeten the pot for physicians by paying off parts of the student loans taken by them. My DO graduated from medical school with a 30-year payment schedule. For each year in the system, pay off a year of loan (up to a max each year to prevent gaming the system, perhaps. That would require research, but the date would be easy to get.)
I'm sure all of that could be gamed, but the profit in gaming it would be a lot lower that what we currently pay. Remember, the federal government already pays of half of all health care expenses in the nation.
One thing that would help is a single universal health risk pool. A private insurer who operated in the Health insurance market would be required to accept any applicant, regardless of prior history, and would be forbidden to selectively rate up any applicant.
Add to that "risk adjustment" and the health insurance system would be operating pretty much on a level playing field. Everyone would be forced to make their money by paying lower health care costs. There's a lot of room for innovation in that.
Also we need a single standardized definition of the terms used in medical billing, so that physicians and hospitals would have to hire only enough clerical staff to deal with one basic system billing system. The idea that every insurance company has its own system is simply a ploy to lock in health care providers to that insurance company. Any efficiencies found in medical billing could go to physicians and hospitals or to the insurance company. That's another incentive to lower costs and streamline the billing system. It would also lower what it costs to run administration for medical billing in the physicians and hospitals.
I am assuming that insurance companies will be allowed to sell supplemental insurance policies that cover costs above what the standard benefits the new health care system will provide, but such policies should clearly be add-ons to the normal insurance, not included in as part of the normal insurance like the private insurance companies offering Medicare benefits do today. That way the purchasers would know what they were paying and could see whatever additional benefits to supplemental policy provided. Again, the cost of health care needs to be up front and transparent as much as possible.
I'd also like to see a single universal appeals board for all denials of payment, private and government. Without that standardized appeals system the patients have no real recourse usually, which is why the insurance companies have been able to get away with the rescissions.
Sweeten the pot for physicians by paying off parts of the student loans taken by them. My DO graduated from medical school with a 30-year payment schedule. For each year in the system, pay off a year of loan (up to a max each year to prevent gaming the system, perhaps. That would require research, but the date would be easy to get.)
I'm sure all of that could be gamed, but the profit in gaming it would be a lot lower that what we currently pay. Remember, the federal government already pays of half of all health care expenses in the nation.
Saturday, June 20, 2009
Good "AMA" health care commercial
Watch this "commercial" by Bill Maher. The AMA will hate it - particularly because it is true, just exaggerated.
Also, Digby makes an excellent point about this "greatest health care system in the world." Free lancers, students, and self-employed individuals have to avoid going to the doctor because if the doctor finds something that is recorded as a "preexisting condition" and you then move out of state or even just out of the network area, you are dropped by your old insurance company and have to find a new one in that great free market that McCain was going to throw us all into.
If you have a preexisting condition on your record then even if you can find new insurance then the premiums will be sharply jacked up. Very frequently that means people are trapped in one location or job just to keep their health insurance.
Universal health insurance with a single rating pool and with everyone paying into the system whether they are healthy or not ends that, even with private insurance companies. It's just that everyone pays and since everyone is in the same universal rating pool, preexisting conditions do not exist. Neither do jacked-up premiums, since the insurance company does not have to ensure that they are only administering insurance and paying for people in their own private rating pool.
The insurance companies, even in a private system, are paid on a per-capita basis. They collect the same premium as every other insurance company per person insured. If someone is especially expensive, then the individual companies themselves pay for loss insurance for themselves. Excessive losses are "reinsured." It's like a gambling casino. For a pool large enough, the losses are quite predictable.
Of course, the high executive salaries are no longer justified. That's why they want to kill universal health care and leave 50 million Americans uninsured. They make much bigger profits that way.
Also, Digby makes an excellent point about this "greatest health care system in the world." Free lancers, students, and self-employed individuals have to avoid going to the doctor because if the doctor finds something that is recorded as a "preexisting condition" and you then move out of state or even just out of the network area, you are dropped by your old insurance company and have to find a new one in that great free market that McCain was going to throw us all into.
If you have a preexisting condition on your record then even if you can find new insurance then the premiums will be sharply jacked up. Very frequently that means people are trapped in one location or job just to keep their health insurance.
Universal health insurance with a single rating pool and with everyone paying into the system whether they are healthy or not ends that, even with private insurance companies. It's just that everyone pays and since everyone is in the same universal rating pool, preexisting conditions do not exist. Neither do jacked-up premiums, since the insurance company does not have to ensure that they are only administering insurance and paying for people in their own private rating pool.
The insurance companies, even in a private system, are paid on a per-capita basis. They collect the same premium as every other insurance company per person insured. If someone is especially expensive, then the individual companies themselves pay for loss insurance for themselves. Excessive losses are "reinsured." It's like a gambling casino. For a pool large enough, the losses are quite predictable.
Of course, the high executive salaries are no longer justified. That's why they want to kill universal health care and leave 50 million Americans uninsured. They make much bigger profits that way.
Wednesday, June 17, 2009
Here's a big part of what's wrong with private health insurers
The LA Times has a good article about a Congressional Hearing on health insurers that should have happened years ago. The health insurers are running a deadly and very expensive scam that would make the Mafia proud. They are collecting premiums, but when severe and expensive cases happen, they cancel just those policies, allegedly for fraud. As the story points out, in a large number of cases there was NO FRAUD *. The real reason for canceling is that they don't want to pay the medical bills that are higher than what the insured has paid in. That is, they want to sell insurance but not pay it. From the LA Times:
Universal health care with a single insurance pool that covers everyone prevents this. (It doesn't matter who is paying. That's a very different issue.) Health insurers would have to accept anyone, and preexisting conditions would not matter. (This too can be gamed, but not like the clear fraud the insurance companies have just testified to Congress that they are conducting.)
With a single universal health insurance pool covering everyone, there would be no "fraud" of the type the health care executives testified to. There would be no excuse for health insurers to cancel a policy when someone threatened to file a claim on it. The possible fraud is for someone who is not in an insured pool to try to join a health insurance pool once they are sick (called "adverse selection"), and raise its costs. Everyone would pay the same price, sick or well. An insurance company that found a patient who they took on who was extremely expensive should have reinsured everyone they covered for catastrophic health costs, and with a universal health insurance pool reinsurance would be predictable and profitable.
But of course, a company that was big enough to reinsure itself would not have to pay for reinsurance - you know, a company like Blue Cross or and an organization like the government. More profit for Blue Cross -- or lower costs for the government by not buying reinsurance. The statistical Law of Large Numbers rewards big insurance pools with predictable costs.
Who is paying for the profits the health insurers use to pay the exorbitant salaries of their CEO's and pay dividends to their stock holders? Sick people who get their insurance canceled because they submit claims for what they are paying for. And everyone else whose premiums are jacked up when those canceled people go into public health care. The public health care system pays for treatment without the benefit of the insurance payments made by the policy holders of the insurance company who canceled the policy.
One last thing to consider. My analysis is not based on secret insurance information. Any semi-competent insurance agent will understand it, and the health insurance executives know it clearly because it is what they depend on to pretend to innovate their products. They are really innovating in new ways to cancel expensive clients. But if the health insurance system were managed and supervised, their methods of "innovation" would disappear along with the wasted money the policy holders who don't get sick are throwing away. (Insurance means that everyone pays in and those who are sick get covered beyond what they could pay for themselves.) Along with the exposure that what they are calling "innovation" is, in fact, fraud, the excuses for high executive payouts disappear. Health insurance would become what it should be - a predictable utility. Executives would be paid what civil servants get paid because their jobs would become routine as the excess costs of avoiding payment are washed out of the system. That's pretty much what has happened in every nation that has been sensible to establish universal health care.
That excess wasted money would either be paid back in lower premiums or in coverage of the many uninsured. The predictability provided by the single universal health insurance pool would make health care planning much easier. Low income city districts and rural areas that don't currently get adequate health care coverage could be covered with health care providers because they could expect to get paid for their services. In addition, a lot of the increases in price of health care could be removed from the system.
But the executives and their stockholders wouldn't get what economists call "rent payments" - in economics, a payment to a factor of production in excess of that which is needed to keep it employed in its current use. More than 20,000 people that we can document are paying those "economic rent payments." So are the rest of us, through taxes to support the tax-supported health care those people were thrown onto when the insurers canceled their policies and refunded their payments.
If you aren't disgusted at the scam the private health insurers are running, you should be. It makes Bernie Madoff look like a relative piker.
* "Fraud only occurs when three elements come together - motivation, opportunity, and rationalisation" See Flat Rock. Either motivation or rationalization was missing in many of the cases described. The insurance companies canceled the policies anyway. The real problem was that the company was on the hook for more money than the premiums they had received.
Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.Go read the full article and you'll be disgusted. You will see why no private insurance company can be trusted to deliver what they promised - and the customer paid for. But there is a cure.
The hearing on the controversial action known as rescission, which has left thousands of Americans burdened with costly medical bills despite paying insurance premiums, began a day after President Obama outlined his proposals for revamping the nation's healthcare system.
An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.
It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.
[highlighting mine - Editor WTF-o]
Universal health care with a single insurance pool that covers everyone prevents this. (It doesn't matter who is paying. That's a very different issue.) Health insurers would have to accept anyone, and preexisting conditions would not matter. (This too can be gamed, but not like the clear fraud the insurance companies have just testified to Congress that they are conducting.)
With a single universal health insurance pool covering everyone, there would be no "fraud" of the type the health care executives testified to. There would be no excuse for health insurers to cancel a policy when someone threatened to file a claim on it. The possible fraud is for someone who is not in an insured pool to try to join a health insurance pool once they are sick (called "adverse selection"), and raise its costs. Everyone would pay the same price, sick or well. An insurance company that found a patient who they took on who was extremely expensive should have reinsured everyone they covered for catastrophic health costs, and with a universal health insurance pool reinsurance would be predictable and profitable.
But of course, a company that was big enough to reinsure itself would not have to pay for reinsurance - you know, a company like Blue Cross or and an organization like the government. More profit for Blue Cross -- or lower costs for the government by not buying reinsurance. The statistical Law of Large Numbers rewards big insurance pools with predictable costs.
Who is paying for the profits the health insurers use to pay the exorbitant salaries of their CEO's and pay dividends to their stock holders? Sick people who get their insurance canceled because they submit claims for what they are paying for. And everyone else whose premiums are jacked up when those canceled people go into public health care. The public health care system pays for treatment without the benefit of the insurance payments made by the policy holders of the insurance company who canceled the policy.
One last thing to consider. My analysis is not based on secret insurance information. Any semi-competent insurance agent will understand it, and the health insurance executives know it clearly because it is what they depend on to pretend to innovate their products. They are really innovating in new ways to cancel expensive clients. But if the health insurance system were managed and supervised, their methods of "innovation" would disappear along with the wasted money the policy holders who don't get sick are throwing away. (Insurance means that everyone pays in and those who are sick get covered beyond what they could pay for themselves.) Along with the exposure that what they are calling "innovation" is, in fact, fraud, the excuses for high executive payouts disappear. Health insurance would become what it should be - a predictable utility. Executives would be paid what civil servants get paid because their jobs would become routine as the excess costs of avoiding payment are washed out of the system. That's pretty much what has happened in every nation that has been sensible to establish universal health care.
That excess wasted money would either be paid back in lower premiums or in coverage of the many uninsured. The predictability provided by the single universal health insurance pool would make health care planning much easier. Low income city districts and rural areas that don't currently get adequate health care coverage could be covered with health care providers because they could expect to get paid for their services. In addition, a lot of the increases in price of health care could be removed from the system.
But the executives and their stockholders wouldn't get what economists call "rent payments" - in economics, a payment to a factor of production in excess of that which is needed to keep it employed in its current use. More than 20,000 people that we can document are paying those "economic rent payments." So are the rest of us, through taxes to support the tax-supported health care those people were thrown onto when the insurers canceled their policies and refunded their payments.
If you aren't disgusted at the scam the private health insurers are running, you should be. It makes Bernie Madoff look like a relative piker.
* "Fraud only occurs when three elements come together - motivation, opportunity, and rationalisation" See Flat Rock. Either motivation or rationalization was missing in many of the cases described. The insurance companies canceled the policies anyway. The real problem was that the company was on the hook for more money than the premiums they had received.
Friday, May 01, 2009
A great many private health insurance plans don't protect your finances
A major reason for getting health insurance is so that you can have access to health care regardless of your employment status. That's important because is the case of severe illness, you may not be able to work so insurance is essential. The second reason is to protect your personal wealth from the unexpected and, in the case of many severe illnesses, extremely high costs of health care. So when you get laid off, one of the first things you need to do is get individual health care in the individual insurance market.
Consumer reports has recently investigate the health insurance offered in the private health insurance market for people who do not have employer-connected insurance. What they have found is that the private health insurance market offers policies which are either unaffordably expensive or which are so riddled with co-pays and limitations that they leave the insured on the hook for a great deal of the cost of health care which would have been covered by good employer or government insurance policies.
Here is the beginning of the report from Consumer Reports:
You may remember that the private insurance market was John McCain's and the Republican party's solution to the rising costs of health care. As this CR study shows, that may get you into the door of a hospital in the case of a major emergency, but it won't cover the costs. If it does, you are broke from paying the premiums before you got sick and you'll very likely be bankrupt when you get out in either case.
The rational solution to this is mandated universal health care financed by the federal government. It needs to be federal because both people and illnesses easily move anywhere in the nation. The problem is national so the solution needs to be national. Also, as medicare and medicaid have proven, they can pay out benefits with an administrative cost less than 10%, while the very best private insurers have an administrative cost of 25% or more. Much of that cost is caused by the fact that the private insurer has to make sure that they do not insure unhealthy individuals and also do not pay for care for individuals who are not paying for their insurance to the insurance company who pays for he services.
Mandated universal health care will lower some of the costs for the federal government because a lot of the administrative expense is involved in just making sure that uninsured and ineligible individuals are covered for health care. That would also lower costs for private insurers, as they could always determine how the individual was covered before they accepted them. The federal government, by dint of its size, also can negotiate the lowest costs for medications and health services. In Germany the similar solution is federally financed and state administered.
This program at minimum would cover catastrophic medical costs, the costs of chronic health problems like diabetes, high blood pressure, and perhaps the wide-spread causes of illness like obesity. I'd like to see it pay for universal dental care, also, since untreated dental problems cause a lot of other health problems like heart trouble and such. Services above and beyond those items like chiropractic care as well as vitamin therapy and alternative medicines which are not well researched could then be covered by private health insurance or by fee for service.
If the government offered this alongside private insurance plans through employers and private insurance, then the difference in cost between the private insurance and the government would have the majority of people move to the government plan because they got equal health care at significantly lower costs and with a lot less hassle and surprise bills or denials of service.
Health care providers (operating as private contractors) would all understand the rules of the major health care financer and be able to focus on providing medical care instead of having to hire three or four medical insurance clerks to deal with differing insurance regulations and with fighting with insurance companies to get various services covered for their patients. Appeals for denials of services would be public record and available to the press, unlike similar "appeals" to private insurers, so the public could be made aware of unfair financing practices. Note the several private health insurers in California were sued for waiting until someone got expensively sick, then going back and determining ways to cancel their policies and merely refund their premiums instead of paying benefits. This unfair process (which is probably widespread) only comes out against a private insurer after expensive and lengthy law suits, and then only if the currently declining media covers it. A government appeals process can be made separate from the issue of making a profit, unlike for private insurers.
Most average workers simply want access to needed health care for themselves and their families. Middle class workers want medical care access and protection of their family wealth, such as their home and retirement funding. Only a universal health care mandate properly designed will provide that. It clearly is not here for a great many people right now, and what is happening to the auto workers demonstrates how uncertain even employer-provided health care is.
Addendum 10:39 CDT
Here is a link to a story of how the employer insurance is abused by employers. Fired Zales worker recovers. My thanks to the commenter "anonymous" who left this link as a comment to my April 10th post on Social Security and Medicare Notes.
Consumer reports has recently investigate the health insurance offered in the private health insurance market for people who do not have employer-connected insurance. What they have found is that the private health insurance market offers policies which are either unaffordably expensive or which are so riddled with co-pays and limitations that they leave the insured on the hook for a great deal of the cost of health care which would have been covered by good employer or government insurance policies.
Here is the beginning of the report from Consumer Reports:
The rest is quite worth reading so click through.
Hazardous health plans
Coverage gaps can leave you in big trouble
Many people who believe they have adequate health insurance actually have coverage so riddled with loopholes, limits, exclusions, and gotchas that it won’t come close to covering their expenses if they fall seriously ill, a Consumer Reports investigation has found.
At issue are so-called individual plans that consumers get on their own when, say, they’ve been laid off from a job but are too young for Medicare or too "affluent" for Medicaid. An estimated 14,000 Americans a day lose their job-based coverage, and many might be considering individual insurance for the first time in their lives.
But increasingly, individual insurance is a nightmare for consumers: more costly than the equivalent job-based coverage, and for those in less-than-perfect health, unaffordable at best and unavailable at worst. Moreover, the lack of effective consumer protections in most states allows insurers to sell plans with "affordable" premiums whose skimpy coverage can leave people who get very sick with the added burden of ruinous medical debt.
You may remember that the private insurance market was John McCain's and the Republican party's solution to the rising costs of health care. As this CR study shows, that may get you into the door of a hospital in the case of a major emergency, but it won't cover the costs. If it does, you are broke from paying the premiums before you got sick and you'll very likely be bankrupt when you get out in either case.
The rational solution to this is mandated universal health care financed by the federal government. It needs to be federal because both people and illnesses easily move anywhere in the nation. The problem is national so the solution needs to be national. Also, as medicare and medicaid have proven, they can pay out benefits with an administrative cost less than 10%, while the very best private insurers have an administrative cost of 25% or more. Much of that cost is caused by the fact that the private insurer has to make sure that they do not insure unhealthy individuals and also do not pay for care for individuals who are not paying for their insurance to the insurance company who pays for he services.
Mandated universal health care will lower some of the costs for the federal government because a lot of the administrative expense is involved in just making sure that uninsured and ineligible individuals are covered for health care. That would also lower costs for private insurers, as they could always determine how the individual was covered before they accepted them. The federal government, by dint of its size, also can negotiate the lowest costs for medications and health services. In Germany the similar solution is federally financed and state administered.
This program at minimum would cover catastrophic medical costs, the costs of chronic health problems like diabetes, high blood pressure, and perhaps the wide-spread causes of illness like obesity. I'd like to see it pay for universal dental care, also, since untreated dental problems cause a lot of other health problems like heart trouble and such. Services above and beyond those items like chiropractic care as well as vitamin therapy and alternative medicines which are not well researched could then be covered by private health insurance or by fee for service.
If the government offered this alongside private insurance plans through employers and private insurance, then the difference in cost between the private insurance and the government would have the majority of people move to the government plan because they got equal health care at significantly lower costs and with a lot less hassle and surprise bills or denials of service.
Health care providers (operating as private contractors) would all understand the rules of the major health care financer and be able to focus on providing medical care instead of having to hire three or four medical insurance clerks to deal with differing insurance regulations and with fighting with insurance companies to get various services covered for their patients. Appeals for denials of services would be public record and available to the press, unlike similar "appeals" to private insurers, so the public could be made aware of unfair financing practices. Note the several private health insurers in California were sued for waiting until someone got expensively sick, then going back and determining ways to cancel their policies and merely refund their premiums instead of paying benefits. This unfair process (which is probably widespread) only comes out against a private insurer after expensive and lengthy law suits, and then only if the currently declining media covers it. A government appeals process can be made separate from the issue of making a profit, unlike for private insurers.
Most average workers simply want access to needed health care for themselves and their families. Middle class workers want medical care access and protection of their family wealth, such as their home and retirement funding. Only a universal health care mandate properly designed will provide that. It clearly is not here for a great many people right now, and what is happening to the auto workers demonstrates how uncertain even employer-provided health care is.
Addendum 10:39 CDT
Here is a link to a story of how the employer insurance is abused by employers. Fired Zales worker recovers. My thanks to the commenter "anonymous" who left this link as a comment to my April 10th post on Social Security and Medicare Notes.
Saturday, November 22, 2008
Republicans MUST work to stop universal health care
It is quite clear that Universal Health care is an idea whose time has come. Every major politician, both Democrat and Republican, had to campaign with some kind of health care plan, and Obama won with an explicit proposal as part of his campaign.
Politically, for the Democrats to succeed in passing universal health care will be a disaster for Republicans that is worse than the failure of the Bush administration to deal with Katrina or the failure to discover WMD in Iraq. The middle class will love it, and the Democrats will lock up the middle class for a generation or more, much as they did after FDR passed Social Security.
Last night Hilzoy wrote Making It Explicit discussing this. Her conclusion is
Since these will be party line votes with heavy party discipline, it may have been a significant reason why Harry Reid and Barack Obama were willing to put up with Joe Lieberman's election campaign crap and leave him in as committee chairman just to make sure he did not bolt to the Republican Party. If Norm Coleman wins in Minnesota and Saxby Chambliss wins in Georgia, then the Democrats will almost certainly have to pull over two Republicans to defeat a filibuster by the Republican. As a Democrat, Lieberman is almost certainly a reliable vote to break a filibuster on this subject. That means Harry Reid only has to get two Republicans to break ranks - difficult but not impossible.
But if Joe went to the Republican caucus, or resigned and was replaced by a Republican Senator, then Harry Reid will need three Republican cross-overs. Paying off Joe to keep him in the caucus is a lot easier than getting that third Republican cross over.
It looks like Harry Reid and Barack Obama knew what they were doing with Joe Lieberman. Joe probably also knows.
Addendum 3:58 pm CST
Dday at Hullabaloo also writes on the Republican intention to block everything the Democrats attempt.
Now, though, they are going to get really serious about blocking any possible productive work out of the Congress.
They have to. They are in the "trapped rat" syndrome. They are absolutely convinced that if the Democrats do what they promised in the campaign, then the Republican Party will be relegated to the status of a minority party for the next generation.
They're right.
The problem is that their obstructionist tactics in the face of the collapsing economy are going to make their loss even greater. Unfortunately, their only alternative is to give up conservative extremism in the form of market fundamentalism, political evangelical social conservatism and the international aggression of the neocons. They'd rather gamble on obstructionism.
Politically, for the Democrats to succeed in passing universal health care will be a disaster for Republicans that is worse than the failure of the Bush administration to deal with Katrina or the failure to discover WMD in Iraq. The middle class will love it, and the Democrats will lock up the middle class for a generation or more, much as they did after FDR passed Social Security.
Last night Hilzoy wrote Making It Explicit discussing this. Her conclusion is
Pethokoukis and Cannon claim that if Obama succeeds in passing health care, then people who might have been conservatives will like it, and will be more likely to vote for the people who passed it. This is unexceptional. An honest conservative might accept this claim and say: well, I guess our ideas are unpopular, so we'll just have to make our case more persuasively.This morning Steve Benen added his post THE RIGHT, HEALTHCARE, AND POLITICAL SURVIVAL.
But that's not the conclusion they draw. Pethokoukis and Cannon say: because people will like health care reform, if we do not block it, our party will lose support. So precisely because people would like it if they tried it, we need to make sure that it fails.
At least they're honest about it.
Today, the circumstances are slightly different -- Democrats are in good shape and don't need their reputation "revived" -- but with the Pethokoukis and Cannon analyses in mind, history may repeat itself.Essentially it's 1993 all over again. If the Democrats pass universal health care, the national Republican party will be relegated to the minority for a generation and they know it. So we can expect them to pull out all the stops to kill any health care bill.
Remember, for Kristol then and Pethokoukis/Cannon now, it's not about the quality of the policy -- it's about political survival. If Democrats deliver, they'll be positioned to win over a generation of voters. Blocking (or "killing") a reform effort may undermine the public's needs, but it would also block Democrats from winning a historic victory.
With that in mind, the right will likely aggressively resist healthcare reform because, as a matter of electoral strategy, conservatives probably don't have a choice.
Since these will be party line votes with heavy party discipline, it may have been a significant reason why Harry Reid and Barack Obama were willing to put up with Joe Lieberman's election campaign crap and leave him in as committee chairman just to make sure he did not bolt to the Republican Party. If Norm Coleman wins in Minnesota and Saxby Chambliss wins in Georgia, then the Democrats will almost certainly have to pull over two Republicans to defeat a filibuster by the Republican. As a Democrat, Lieberman is almost certainly a reliable vote to break a filibuster on this subject. That means Harry Reid only has to get two Republicans to break ranks - difficult but not impossible.
But if Joe went to the Republican caucus, or resigned and was replaced by a Republican Senator, then Harry Reid will need three Republican cross-overs. Paying off Joe to keep him in the caucus is a lot easier than getting that third Republican cross over.
It looks like Harry Reid and Barack Obama knew what they were doing with Joe Lieberman. Joe probably also knows.
Addendum 3:58 pm CST
Dday at Hullabaloo also writes on the Republican intention to block everything the Democrats attempt.
"A New Era Of Comity And BipartisanshipI wrote as early as last year that this Presidential election was going to be the nastiest in living memory. The Republicans certainly tried to make it so.
by dday
Somebody forgot to tell Mitch McConnell.Senate Minority Leader Mitch McConnell (R-Ky.) on Friday sent a message to Democrats that Republicans are not prepared to bend to a stronger majority.This is the Senate GOP that obstructed practically every major bill that Democrats tried to bring up for the last two years. That's not going to stop, regardless of how many Republicans are planted in the Cabinet or throughout the federal bureaucracy. At this point, Republicans aren't interested in winning the next election, they're interested in stopping any popular policy and beating this country into the ground."
In a letter to Majority Leader Harry Reid (D-Nev.), McConnell urged Reid to adopt a more conciliatory tone and warned him that Republicans will unite against Democrats if he does not. The letter was signed by all 40 GOP senators and two Republican incumbents who are awaiting the results of elections in Georgia and Minnesota.
Now, though, they are going to get really serious about blocking any possible productive work out of the Congress.
They have to. They are in the "trapped rat" syndrome. They are absolutely convinced that if the Democrats do what they promised in the campaign, then the Republican Party will be relegated to the status of a minority party for the next generation.
They're right.
The problem is that their obstructionist tactics in the face of the collapsing economy are going to make their loss even greater. Unfortunately, their only alternative is to give up conservative extremism in the form of market fundamentalism, political evangelical social conservatism and the international aggression of the neocons. They'd rather gamble on obstructionism.
Thursday, November 20, 2008
Universal health care is near passing
On the universal health insurance front, the health insurance companies are feeling the heat from the recent political season. Now that Obama, who campaigned on universal health care, is President-elect the health insurance industry states that it "...would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage." So, unlike during the effort to pass Hillarycare, we are not going to see "Harry and Louise" ads from the health insurers this time. What the health care industry is now saying
It will eliminate the excessive costs involved in preventing uninsured individuals and already sick individuals from receiving health care.
Of course, the changes I described above are just about paying for health care. Improving the delivery of services will be more complicated, of course.
Kevin Drum, linking to Ezra Klein discusses the downside of the insurance company proposal. But he is looking at the details that are going to have to be worked out politically. I am looking at the political wind behind universal health care generally. Try though they will, the Republicans and conservatives will not be able to kill universal health care this time.
Addendum 11:23 pm CST
Mark Kleiman of the Reality Based Community discusses the politics behind the health insurance proposal to accept the individual mandate for health insurance coverage.
In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.All the government has to do in addition is set a minimum standard coverage, a single rate everyone has to pay, set standardized administrative procedures for filing claims so the every health care provider does not have to train clerks separately for each insurance company, and then offer a government insurance to compete directly with the private insurers. Since the government can administer health insurance at a substantially lower cost than private insurance companies can, this will probably either put them out of business or simply incorporate them into the same overall system.
It will eliminate the excessive costs involved in preventing uninsured individuals and already sick individuals from receiving health care.
Of course, the changes I described above are just about paying for health care. Improving the delivery of services will be more complicated, of course.
Kevin Drum, linking to Ezra Klein discusses the downside of the insurance company proposal. But he is looking at the details that are going to have to be worked out politically. I am looking at the political wind behind universal health care generally. Try though they will, the Republicans and conservatives will not be able to kill universal health care this time.
Addendum 11:23 pm CST
Mark Kleiman of the Reality Based Community discusses the politics behind the health insurance proposal to accept the individual mandate for health insurance coverage.
Saturday, September 20, 2008
McCain's healthcare proposal - all the advantages
of financial deregulation.
In the midst of the collapse of the unregulated American financial banking system, John McCain offers this proposal for "fixing" America's health care crisis.
Private health insurance does not provide health care. It collects premiums and either pays or refuses to pay for health care. That's all. So innovative products in health insurance will either collect more in premiums or they will refuse to pay for more benefits. There are no other possible innovations.
That has been the conservative "plan" since Harry Truman proposed national health care in 1948. Block government action on health care insurance and hope that somehow the wealthy insurance salespeople will somehow accidentally stumble on a non-government solution to the difficulties people face with they require health care that still permits insurance executive to skim profits off the premiums before paying for health benefits. It is the basis for the disaster that is America's current health care lack of system in which over 40 million individuals have no health insurance and those who do have health insurance never can be sure in advance what it will pay for. Isn't 60 years of failure enough to show that the "innovative" private insurance market is never going to work?
The solution to the health insurance crisis is not more deregulation, any more than the solution to the banking crisis is more deregulation. Instead there there needs to be a basic standardized health insurance policy in which the coverages are clear and are enforced, and that policy has to be provided to every American citizen.
Private insurance companies need to be required to take anyone of applies from the single standard pool of applicants without consideration of prior health issues. There needs to be a government insurance system that competes directly with the private policies with no additional preferential subsidy for the private policies such as the one Republicans have forced on Medicare. There needs to be a single system of appeal for all refusals to pay benefits and the results of those appeals needs to be available to the media in a timely manner.
No private insurance company is going to offer those options as innovations. They will have to be mandated by government.
When will John McCain learn that the American Enterprise Institute is not friendly the average Americans?
Steve Benen quotes Anonymous Liberal:
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.McCain already admits he doesn't know anything about economics. This statement makes it clear that he and his campaign team know nothing about health insurance either.
Private health insurance does not provide health care. It collects premiums and either pays or refuses to pay for health care. That's all. So innovative products in health insurance will either collect more in premiums or they will refuse to pay for more benefits. There are no other possible innovations.
That has been the conservative "plan" since Harry Truman proposed national health care in 1948. Block government action on health care insurance and hope that somehow the wealthy insurance salespeople will somehow accidentally stumble on a non-government solution to the difficulties people face with they require health care that still permits insurance executive to skim profits off the premiums before paying for health benefits. It is the basis for the disaster that is America's current health care lack of system in which over 40 million individuals have no health insurance and those who do have health insurance never can be sure in advance what it will pay for. Isn't 60 years of failure enough to show that the "innovative" private insurance market is never going to work?
The solution to the health insurance crisis is not more deregulation, any more than the solution to the banking crisis is more deregulation. Instead there there needs to be a basic standardized health insurance policy in which the coverages are clear and are enforced, and that policy has to be provided to every American citizen.
Private insurance companies need to be required to take anyone of applies from the single standard pool of applicants without consideration of prior health issues. There needs to be a government insurance system that competes directly with the private policies with no additional preferential subsidy for the private policies such as the one Republicans have forced on Medicare. There needs to be a single system of appeal for all refusals to pay benefits and the results of those appeals needs to be available to the media in a timely manner.
No private insurance company is going to offer those options as innovations. They will have to be mandated by government.
When will John McCain learn that the American Enterprise Institute is not friendly the average Americans?
Steve Benen quotes Anonymous Liberal:
"[I]f we bring the same approach to health care that we brought to the banking industry, maybe in eight years or so, our health care system will completely collapse and the government will have to step in and take over. Voila! A national health care system. Brilliant."Except, of course, that it adds another decade to the current six decades of failure to act.
Saturday, February 16, 2008
So what is the social and economic value added by private health insurance firms?
Any fact-based and rational discussion of America's health insurance "system" will get stuck on the question "What do private health insurance companies do to add value to the health delivery system? Here is a brief discussion from Harold Pollack :
It is fear of government bureaucracy? Why is rational government bureaucracy any less efficient than the existing multiple bureaucracies of thousands of different health insurers? (Answer - a single government-run bureaucracy is clearly capable of being much more efficient than what we have now.) Given that the inherent difference in the source of a bureaucracy is negligible, then the clear cost savings of a single, rational bureaucratic system with a decent appeals system and media oversight is obviously preferable to the current inefficient and corruption-ridden private enterprise system. And health care providers will have greater ability to influence a government-run single payer health care financing system than they do to influence powerful insurance executives who answer to no one except their investors.
I think America is ready for realistic health insurance reform. I do wonder if Barack Obama understands why previous efforts have failed and what he has to do to avoid those same traps if and when he is elected President. Hillary is clearly the preferred candidate if the intent is to reform health care. She understands the need and understands many of the pitfalls that Bill Clinton was unable to navigate around in 1993.
This is a subject that needs to be continually readdressed. America can't afford the gold-plated system that fails one in six Americans when they need it.
Why do we have this industry again? I understand that history and politics make this industry hard to replace, but what social value does it really create? I don't ask this question about the oil industry, the pharmaceutical industry, or computer software giants. Whatever the misdeeds of particular firms and the pressing needs for public regulation in these latter industries, we understand why it's good to have firms competing to find new energy sources, new drugs, new operating systems. I don't believe private insurers are less ethical, as a whole, than soft drink manufacturers or manufacturers of plush carpet. I just can't explain what we are getting here.We know that any reform of the health care system will immediately face insurance company financed "Harry and Louise" ads to try to scare voters out of rationally considering the problems insurance companies cause and their inability to add anything positive to the health care delivery system. But really, are physicians and nurses so brain washed that they are willing to continue to waste thousands of man-hours trying to get insurance companies to do things that are rational and provide decent patient care?
In the case of private health insurance, firms have some expertise administering claims and perhaps designing wellness programs. Yet to the extent that their business relies upon avoiding high-cost patients their activities are social wasteful. In so many ways, their incentives are poorly aligned with the public good.
Even if we could correct these misplaced incentives, it seems as though anything beneficial insurers can do could be accomplished better and cheaper by government. Private insurers are too fragmented to promote needed efficiencies such as electronic medical records. A Chicago provider dealing with 20 payers is hardly swayed by the pay-for-performance standard of any one of them. In general, private payers are too fragmented to exert powerful market discipline on providers. The embarrassing history of Medicare managed care provides one of many embarrassments for those who assert the inherent superiority of the private sector.
Private insurers do have two advantages: They are more nimble than government is. More important, they can take the political heat for saying "no" when patients want some desirable but unjustified service, drug, or therapy. This is hard for government to do, and "no" should sometimes be said even when this is painful.
But maybe we have this backwards. It seems to me that even when insurers are justified in saying no--as Cigna might have been in the liver transplant case promoted by John Edwards, and as insurers sometimes are regarding potentially useless or harmful experimental therapies--profit-making firms lack the legitimacy to deny anyone a desperately wanted treatment that provides some plausible benefit. Denying important treatments is an inherently political question. A transparent process, by financially disinterested parties, is required to secure public legitimacy.
If this is so, private insurers themselves have a strong stake in government assuming a larger role in scrutinizing costly therapies. And they have a strong stake in some larger regulatory structure to constrain the more predatory aspects of current market practice.
I write this as (by HuffPo standards) a politically moderate free-trade policy wonk who instinctively favors market solutions for most economic concerns. If people like me feel this way--and many of us do--the industry should be worried.
It is fear of government bureaucracy? Why is rational government bureaucracy any less efficient than the existing multiple bureaucracies of thousands of different health insurers? (Answer - a single government-run bureaucracy is clearly capable of being much more efficient than what we have now.) Given that the inherent difference in the source of a bureaucracy is negligible, then the clear cost savings of a single, rational bureaucratic system with a decent appeals system and media oversight is obviously preferable to the current inefficient and corruption-ridden private enterprise system. And health care providers will have greater ability to influence a government-run single payer health care financing system than they do to influence powerful insurance executives who answer to no one except their investors.
I think America is ready for realistic health insurance reform. I do wonder if Barack Obama understands why previous efforts have failed and what he has to do to avoid those same traps if and when he is elected President. Hillary is clearly the preferred candidate if the intent is to reform health care. She understands the need and understands many of the pitfalls that Bill Clinton was unable to navigate around in 1993.
This is a subject that needs to be continually readdressed. America can't afford the gold-plated system that fails one in six Americans when they need it.
Tuesday, December 25, 2007
Another reason private companies cannot insure health care fairly
What's really wrong with America's health care lack-of-system? Here is the answer.
Insurance companies make money by not paying for claims.
Here is another example of the way private insurers avoid paying legitimate claims. The story was reported in the Los Angeles Times on Christmas day.
A California State Appeals Court looked into the way California insurance companies cancel health insurance policies. Steve Hailey, an Orange County small-business owner, had an insurance policy with Blue Shield of California when he had a car accident that disabled him. Blue Shield first approved more than $450,000 worth of hospital and other medical care, but when the costs of care exceeded the amount or premiums he had paid, they canceled his policy and demanded reimbursement for more than $104,000 they had spent on his account.
The reason for the cancellation? They claimed that Hailey lied about preexisting conditions when he purchased the policy. However, the appeal court found that his wife had filled out the application, and it was written poorly so that it was not sure how she should have answered the questions. The key point, though, was that Blue Shield had become aware of the apparent misrepresentation about two months after the policy was issued, but waited until their was an accident and the payouts exceeded the premiums paid before canceling the policy and demanding reimbursement. Had they canceled the policy when the errors were first noted, the Haileys could have gotten coverage for Mr. Hailey on Mrs. Hailey's policy through her employer. By the time they did cancel, after an unnecessary delay simply to collect premiums, it was too late for the Haileys to make other insurance arrangements.
The California appeals court rejected the cancellation of the Hailey's policy, sent it back to the lower court for trial, and required Blue Shield to pay for the Hailey's costs of appeal.
The insurance company policy, then, was to delay canceling the questionable policy as long as the insured was paying premiums but not making big claims. Only when claims exceeded premiums did they cancel the policy, which prevented the newly uninsured from making other arrangements for insurance.
The decision by the California state court of appeals has no power in any other state. This technique is available to any health insurer who want to use it outside California. So remember
Insurance companies make money by not paying for claims.
This is another post that describes how private health insurance fails to deal fairly with the insured. My earlier post was Here's why private insurance companies can't finance decent universal health care.
Here is another example of the way private insurers avoid paying legitimate claims. The story was reported in the Los Angeles Times on Christmas day.
A California State Appeals Court looked into the way California insurance companies cancel health insurance policies. Steve Hailey, an Orange County small-business owner, had an insurance policy with Blue Shield of California when he had a car accident that disabled him. Blue Shield first approved more than $450,000 worth of hospital and other medical care, but when the costs of care exceeded the amount or premiums he had paid, they canceled his policy and demanded reimbursement for more than $104,000 they had spent on his account.
The reason for the cancellation? They claimed that Hailey lied about preexisting conditions when he purchased the policy. However, the appeal court found that his wife had filled out the application, and it was written poorly so that it was not sure how she should have answered the questions. The key point, though, was that Blue Shield had become aware of the apparent misrepresentation about two months after the policy was issued, but waited until their was an accident and the payouts exceeded the premiums paid before canceling the policy and demanding reimbursement. Had they canceled the policy when the errors were first noted, the Haileys could have gotten coverage for Mr. Hailey on Mrs. Hailey's policy through her employer. By the time they did cancel, after an unnecessary delay simply to collect premiums, it was too late for the Haileys to make other insurance arrangements.
The California appeals court rejected the cancellation of the Hailey's policy, sent it back to the lower court for trial, and required Blue Shield to pay for the Hailey's costs of appeal.
The insurance company policy, then, was to delay canceling the questionable policy as long as the insured was paying premiums but not making big claims. Only when claims exceeded premiums did they cancel the policy, which prevented the newly uninsured from making other arrangements for insurance.
The decision by the California state court of appeals has no power in any other state. This technique is available to any health insurer who want to use it outside California. So remember
This is another post that describes how private health insurance fails to deal fairly with the insured. My earlier post was Here's why private insurance companies can't finance decent universal health care.
Sunday, December 23, 2007
Here's why private insurance companies can't finance decent universal health care
Every wonder what is really wrong with America's health care lack-of-system? Here is the answer.
Christy Hardin Smith has a good article on this subject over at FireDogLake.
While it's not perfect, the solution is single payer national health care with the premiums paid by taxes on both employers and individuals and the crazy-quilt of varied coverages and their administration standardized.
Because there are so many insurance companies, each one can claim that refusal to pay valid claims by a different company is not something they do. The actions of each individual company is concealed in the many different companies all trying to offer different products. No government agency can get away with that. There would be a single system of appeals carefully covered by the media.
Stripping out the unnecessary administrative expenses out of the system would save 10% of the waste, fraud and abuse that characterizes the present lack-of-system. Eliminating the overpaid CEO's and dividends to owners would recover another 10%. Then eliminating the costs of salespeople would save another 10% or more.
We need single payer health care in this nation immediately.
See MichaleMoore.com.
Insurance companies make money by not paying for claims.So private companies will maximize profit by collection premiums and then avoiding paying claims as much as possible. The only appeals to this are to the company itself, to the state insurance regulators (which are staffed either by people from the insurance industry or people who are planning to later work for the insurance industry), or to the prohibitively expensive courts. The Republican Tort Reform efforts are all designed to cut off access to the courts by limiting the ability of tort lawyers to get paid for their efforts.
Christy Hardin Smith has a good article on this subject over at FireDogLake.
While it's not perfect, the solution is single payer national health care with the premiums paid by taxes on both employers and individuals and the crazy-quilt of varied coverages and their administration standardized.
Because there are so many insurance companies, each one can claim that refusal to pay valid claims by a different company is not something they do. The actions of each individual company is concealed in the many different companies all trying to offer different products. No government agency can get away with that. There would be a single system of appeals carefully covered by the media.
Stripping out the unnecessary administrative expenses out of the system would save 10% of the waste, fraud and abuse that characterizes the present lack-of-system. Eliminating the overpaid CEO's and dividends to owners would recover another 10%. Then eliminating the costs of salespeople would save another 10% or more.
We need single payer health care in this nation immediately.
See MichaleMoore.com.
Thursday, December 13, 2007
More proof the market can't be trusted with health insurance
From the Los Angeles Times:
Those 200 are just the tip of the iceberg. California has active regulators of the insurance, and probably misses a lot more cases than they catch. Here in Texas Blue Cross would never have been caught. The regulators may be paid by state warrant, but they work for the insurance companies.
California's top insurance regulator has accused Blue Shield, one of the state's largest health plans, of 1,262 violations of claims-handling laws and regulations that resulted in more than 200 people losing their medical coverage.Blue Cross complains that the violations are "for nonsubstantive issues," but for 200 people the company simply dropped their insurance rather than pay the expenses that those people had purchased the insurance for and that Blue Cross had committed to pay when required.
Calling the allegations "serious violations that completely undermine the public's trust in our healthcare delivery system and are potentially devastating to patients," Insurance Commissioner Steve Poizner said he would announce today that he would seek a $12.6-million fine.
Those 200 are just the tip of the iceberg. California has active regulators of the insurance, and probably misses a lot more cases than they catch. Here in Texas Blue Cross would never have been caught. The regulators may be paid by state warrant, but they work for the insurance companies.
Tuesday, July 10, 2007
The strongest argument for national health care.
This (from Kevein Drum) looks like the strongest economic argument for a national health care system:
Ask GM, Ford, and the Japanese firms who prefer to locate in Canada rather than the U.S. because in Canada the costs of health care are standard for every firm. Managerial time and effort is a rare commodity, and should be focused on the business rather than such unrelated items as negotiating with health insurance companies and trying to supervise health insurance contracts.
Is one reason a lot of firms fight universal health care because they will have to work harder to keep employees? Sort of like the way the electric utilities, mobile (and regular) phone companies and cable TV demand two year contracts so that a customer can't easily switch to a better offer?
And I'll disagree with Kevin. The current U.S. system wastes a minimum of 25% of every health care dollar in unnecessary overhead. Universal health care should easily be able to provide better general health care at sharply lower overall cost. Nearly 40 other countries provide total coverage at sharply lower costs per patient and get better overall results than the U.S. does.
"Matt Yglesias on one of the upsides of a national health care plan:This labor mobility is in addition to the greater freedom for business to focus managerial efforts on their own business, rather than the peripherals of employee health care.I don't know the size of this effect either, but I certainly know of people who are basically stuck in their jobs forever because they have an expensive, chronic condition that wouldn't be covered during their first year at a new job. Policies vary, but it's not uncommon for pre-existing conditions to get limited (or no) coverage during an initial period under a new group health plan. As for taking a year off to go to school, or leaving to start a new business, you can just forget it if you have a chronic condition that's too expensive to risk losing coverage for."There seems to me to be decent evidence that labor market flexibility leads to employment growth. It also seems clear that America's health care system generates substantial labor market rigidities as people with medical histories need to maintain a seamless web of insured-ness in order to remain insurable. [The] economic costs here seem potentially quite large, but obviously you'd need some really smart people to take a look at it.
Ask GM, Ford, and the Japanese firms who prefer to locate in Canada rather than the U.S. because in Canada the costs of health care are standard for every firm. Managerial time and effort is a rare commodity, and should be focused on the business rather than such unrelated items as negotiating with health insurance companies and trying to supervise health insurance contracts.
Is one reason a lot of firms fight universal health care because they will have to work harder to keep employees? Sort of like the way the electric utilities, mobile (and regular) phone companies and cable TV demand two year contracts so that a customer can't easily switch to a better offer?
And I'll disagree with Kevin. The current U.S. system wastes a minimum of 25% of every health care dollar in unnecessary overhead. Universal health care should easily be able to provide better general health care at sharply lower overall cost. Nearly 40 other countries provide total coverage at sharply lower costs per patient and get better overall results than the U.S. does.
Thursday, July 05, 2007
Can we get healthcare reform on the agenda?
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