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?