Tuesday, July 31, 2012

Health Insurance -- Hard Pill to Swallow

     I never noticed what health care cost back when I was working during the 1970s, '80s, '90s and into the 2000s. My company took a few dollars out of my paycheck. The amount went up a little bit, from year to year, but not as much as my salary -- and besides, it was a minor blip in my financial picture.

     Then I got laid off. I went on COBRA and had to pay the whole bill. I was absolutely stunned at how much health insurance costs.

     I did some research and found I could do better than my old company, which offered what we now call a Cadillac plan (but from what I hear from old colleagues, it doesn't anymore). I got a little better deal through my professional association; but it was still breathtakingly expensive.

     My insurance bill went down after my kids transferred onto their own plans. But now, in the last couple of years, it's started shooting up again. By 16% last year. And a proposed 20% to 40% for this year.

     As I outlined in a previous post, Affordable Health Care for Early Retirees, I haven't been blaming my insurance company for high insurance costs. I figured if medical insurance was a profitable business, I'd be getting solicitations by mail and phone and Internet to sign up with Prudential or Aetna or Allstate. After all, various companies are always trying to sell me life insurance or auto insurance or home insurance. If they're not trying to sell me health insurance, it must not be very profitable.

     In fact, it's hard to get health insurance. You have to have connections in order to get medical insurance. Like they're doing you a favor.

     And besides, I've seen what doctors and hospitals try to bill people for their services -- from my daughter who recently went to a clinic for a sore throat and was billed $383 for a five-minute visit, to my friend who got a pacemaker, stayed in the hospital overnight and went home with a bill approaching $100,000!

     The insurance paid . . . not all of it, but most of it, by far. How can that be a bad deal?

     I do not claim to be an expert on medical financing. But in my admittedly unscientific poll last week, the majority of responders did blame the greedy insurance companies for high medical insurance premiums. And a couple of them must know, since they used to work for insurance companies.

     Some 42% of the votes said greedy insurance companies were primarily responsible for the high cost of medical insurance. Just 23% blamed the high cost of medicine. About 12% blamed overuse of the medical system by well-insured people. Only a couple of people blamed Obama.

     Dr. Kathy McCoy at Living Fully in Midlife and Beyond said, "My feeling -- as a retired healthcare professional -- is that the biggest problem in escalating healthcare costs is the unfettered greed of the big insurance companies. I hated dealing with them when I was in practice because they would refer a patient to me and then I would have to fight for (at times) up to a year to get paid. But I most hated hearing stories about people who had faithfully paid premiums being dropped the moment they really needed care or being denied coverage due to pre-existing conditions."

     June of Aging Gratefully said, "I worked in the insurance industry. It was property and casualty insurance, not health insurance, but in some ways there isn't much difference. Greedy insurance companies are The Bad Guys in this situation."

     Still, I think Dianne from Schmidleysscribblings has a point when she says, "We need to look at our own contribution to the mess . . . Health insurance costs will continue to rise as long as those who can use the system whenever they can. Everytime an effort is made to rein in costs by advising that perhaps some tests are not necessary, such as mammograms, the outcry is so loud, the insurers, regulators and doctors back off."

    Plus, I know plenty of people who run to the doctor with the slightest ache or pain. It only costs them the $20 copay. So why not? It probably does run up costs for everyone -- but is it really significant?

     It's a complicated issue, and even the experts haven't been able to solve it. But still, I'm looking at that letter from my insurance company, and I'm beginning to wonder . . . 20 to 40%? Really?

     Probably the reason hardly anyone blamed Obama for rising medical insurance costs is because not much of the Affordable Care Act has come into effect yet. So the impact is yet to come. Obamacare does an admirable job of extending access to health care for many Americans, including us early retirees. That's certainly a good thing. But anyone suggesting that Obamacare is going to lower medical costs is drinking the Kool-Aid.

     Annie Lowrey of the New York Times reported on an Oregon study showing that uninsured people who gain health insurance "feel healthier, happier, and more financially stable." But it also concluded that despite some savings from better practices, such as keeping people out of emergency rooms, the insured spent about 25% more on health care. The conclusion: "Expanded coverage brings large benefits to many people, but it is also more likely to increase a stretched federal government's long-tern budget responsibilities."

      Better health for more people. But at greater cost, at a time when it's hard to argue that we can easily afford it. Two sides to the same coin. No wonder Obamacare has been controversial.

     Now this past weekend the New York Times in "Doctor Shortage Likely to Worsen with Health Law" revealed that experts project, even without the healthcare law, by 2025 the shortfall of doctors in America will exceed 100,000. Factoring in additional medical coverage from Obamacare, the shortfall will be over 125,000.

     That can't be good. Gee, I wonder what my insurance increase will be for next year?


JHawk23 said...

Didn't see your poll before, but all of the things you mention certainly contribute to the problem, and the key to that in my view is that in the US we have got to the point that we confuse perfect health with good health.

Yes, people do go to the doc more often. But the docs, often limited by what Medicare or an insurance company will pay them, compensate by ordering up expensive and often unnecessary testsor recurring diagnostic procedures, and by prescribing medication at the drop of a hat.
Insurance companies do their part by actively discouraging the consumer from considering cost as a factor, and are completely uninterested when you report that a procedure botched by the lab had to be redone -- they will just pay the lab for BOTH.

Consumer awareness - and an active, informed, participatory approach - might be the place we can begin to turn things around. I've argued with my eye doc about the frequency of some of his tests; we do them once a year now rather than every six months; and my internist has to persuade me of the value of the medications he's tempted to prescribe (so I declined statins, and have got him to reduce the dosage on my high blood pressure medication).

rosaria williams said...

This is a hot topic, for sure! For years, congress tried to pass a health care bill, and failed to do so. Finally, we have one, and immediately it is threatened.
How is it that England boasts about its health care, and we run away from it?

Sightings said...

Do the English really boast about their health care? I've seen both pros and cons.

I know in Canada, the complaint is long wait times, esp. for elective surgery like knee replacements. But everyone does have access to acute care, at a lower cost than Americans.

Worth noting: Canada does NOT have socialized medicine. Many doctors work for themselves. What they have is a socialized insurance program, kind of like Medicare. Although most Canadians also have private supplemental insurance (again like Medicare) to cover drugs, dental procedures and other things not covered by govt. insurance.

Canadians spend less on health care than Americans, with better health outcomes. But nobody seems to know whether it's because of a better health-care system, or better lifestyles. For example, Canadians have half the obesity rate as the U.S. So naturally, they get fewer heart attacks, and they live longer.

Also worth noting: the Canadian system is run by the provincial govts., not the national govt.

But I'm no expert on Canada. I'd love to hear about people's real-life experiences with the medical systems in Canada, Eng., and elsewhere.

Douglas said...

You're not being inundated with health insurance offerings? Wait till you approach Medicare age. I still get them (after being on Medicare for a year) and one of them begging me to call and inquire is the company that already provides me with my Part B coverage.

I remember the fight over Medicare start up. The AMA opposed it at the time. They called it "socialized medicine" and predicted the downfall of America because of it. Of course, once it was put into place, doctors embraced it. After all, it filled their waiting rooms with people who needed care and many who didn't. And that is what worries me about "Obamacare." Currently, healthy and uninsured people do not go to the doctor. They are no burden on the system. It's the unhealthy and uninsured who are the burden. What I suspect (and predict) will happen with mandatory health insurance is more crowded waiting rooms and longer waits to see the doctor for even shorter face time with said doctors. This will translate into even higher insurance cost, not lower.

Know what else happened after the beginning of Medicare? The demise of the house call. Doctors had more patients than they could handle and no longer needed to maintain a clientele.

The chief reason for those expensive (and sometimes redundant) tests and procedures is not insurance but malpractice suits and insurance.

Just my two cents.

Lisa said...

I think Obama has made this happen the health care bill really helped Americans. Insurance Proposals

Knatolee said...

I love our healthcare system in Canada. No, it's not perfect, but nothing is. But I think it's pretty great. I've seen it used in fear-mongering campaigns in the US and I just shake my head. Here's my experience. I have a provincial health card. If I'm sick and need to go to my family doctor, or the hospital, or a specialist, I had over my card and pay nothing. I have made a lot of use of our system over the years and I've had excellent care. For some procedures (knee surgery, hip replacement), there are indeed wait times. They have been working to shorten wait times. But don't forget, we are a huge country with a small population, and the doctors tend to flock to the cities.

If I want a second opinion, I go to another doctor and get one. While you generally must be referred to a specialist by your GP (or another doctor, if you are in the ER for example), no insurance company tells me what doctors I can see. That's generally up to the patient.

In some areas there is a shortage of family doctors but there are walk-in clinics, and if you go to one of these you hand over your card and get to see the doctor on duty. For free.

Well, not really free. Yes, we pay taxes. I've heard Americans point to our high taxes as a reason not to have a medicare system like ours. Well, my taxes aren't THAT high and you know what, I get a lot of services for the taxes I pay. I know what some of my American friends are paying for health insurance and let me tell you, it's a hell of a lot more than the portion of my income tax that goes to healthcare here.

No one in Canada has to keep a job they hate just so they don't lose their health insurance. No one has to worry about a bankruptcy after the healthcare costs of a catastrophic accident wipe out their assets. You may keep a job because you like your benefit plan that covers things the govt. doesn't (most prescription drugs, eyeglasses, etc) but that's another matter.

My parents both had serious illnesses (lung cancer, cardiac issues) and I saw them get excellent care for this, with no delays and visits to many specialists. My friend's Mum was just diagnosed with colon cancer and was in having surgery for it within a week of diagnoses, and that's out here in the boonies we live in.

So I guess you could say I'm a big fan of our system, imperfect though it may be, and I would never trade it for the American one. Plus we have longer life expectancy than Americans, lower infant mortality rate, and a higher overall rate of happiness. Apparently the average American is now wealthier than the average Canadian too!

People abuse the ER here too (going in for trivial issues) and they try to find ways to cope with stuff like that so it doesn't burden the system, but for the most part it is working.

Oh yeah, and your medical costs (doctors' fees, hospital fees, prescription drugs etc) are also a LOT higher than ours. So your medical care costs more to begin with!

THere's my long-winded Canadian opinion. :)

Knatolee said...

SOrry for the typos in that. It was hard to proof-read my tirade in the little box! :)

Knatolee said...

I also screwed up a sentence! It should read "The average CANADIAN is now wealthier than the average AMERICAN." That's mainly because our real estate market didn't bottom out like yours did!

Sightings said...

Knatolee, many thanks for your informative first-hand report on the Canadian system. Sounds pretty good to me. What's the Canadian immigration policy? I'm ready to pack my bags!

Knatolee said...

My hubby practices immigration law (among other things. ) I know a good lawyer for you, ha ha. Seriously though, I think we work on a points system. They care about what country you're coming from, what money you have, eduction, skills, yadda yadda yadda. :)

And hey, Canadian seniors love to go south to Florida for six months of the year anyway!

Btw, seniors get extra goodies in our health system, such as discounted (or free) prescriptions (depending on income), eye exams and other stuff.

schmidleysscribblins,wordpress.com said...

Grannymar wrote a piece today on pulling the plug when the time comes. The last year of life is the most costly as relatives try to keep their loved ones alive. I won't let them take unnecessary measures to keep David alive, but I can't pull the plug either.


PS, I think hospitals have overcharged folks with insurance to make up for the loss of funds for those without insurance. According to an article in the NYTimes this will grow worse as the less well off hospitals with few on insurance plans lose some of the funding they have have received heretofore.

The ACA has reduced this funding for poor hospitals, many of them, in NYC (an unintended consequence?). This is a whole other topic for you to cover. Dianne

Dick Klade said...

Although their politics range from extreme liberalism to arch-conservatism, the 60 members of our family who live in Germany have nothing but good words to say about their universal health care system.

Several have needed complex surgeries, such as multiple heart bypasses, and they received excellent care.

Some reports say that France has the best system--providing maximum care at reasonable cost.

One thing's for sure. Health care systems have been studied to death. "Obamacare" represents a political compromise, not an attempt to adopt the "best" system. The insurance companies agreed to provisions banning their most despicable practices in return for the prospect of gaining about 40 million new customers.

Universal health care is a safety net, not a substitute for perfect medical care. If the U.S. adopted "medicare for all" those with the wealth to do so would still be perfectly free to buy better care for themselves through extra insurance policies, just as they do now.

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