Pay. And Pay More.

Did you ever wonder who really pays the health care bill for the uninsured?  If your suspicion told you that much of the  costs somehow fall to those with insurance, your suspicion has been confirmed.  US News reports:

A “hidden health tax” has families paying $1,017 more in health insurance premiums in 2009; according to Families USA, a health care advocacy group. Individuals pay an additional $368, the group says. According to Reuters, a report released Thursday by Families USA said that health care providers charge those with private insurance more to cover the cost of care for those without it, and insurers, in turn, raise premiums to pass along the cost. In 2008, people without insurance got about $116 billion worth of health care and paid for about 37 percent of the cost. While government programs and charities paid 26 percent, $42.7 billion was left on the shoulders of the privately insured, the report found.

While the precise impact may be debatable–the study does not distinguish between price and cost, for instance–the overall conclusion is not. The uninsured place a significant financial burden on the health care system, and that burden is borne in part by those with insurance.  A costly portion of many household budgets becomes even larger as a result.

This dysfunction is yet another sign that health care in America is broken, mired in inefficiency and lack of transparency.  Those who pay for insurance also help pay for those who don’t–through taxes, higher medical bills and ultimately higher premiums.  That is not right.

As Congress and the Obama Administration work toward a comprehensive resolution (I hesitate to use the word “solution”), focus must be on expunging these cost disparities from the system.   Those who elect medical coverage should pay only the costs and premiums associated with it. Yes, taxes will undoubtedly cover costs of the uninsured.  But make that demarcation clear.  Paying more than once, as the US News report illustrates, should no longer be the norm for those with private insurance.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Just the facts, please

With an issue as complex and contentious as comprehensive health care reform, it is sometimes easy to get lost in the rhetoric.  Who should do what? Who should pay what?  Who is going to win and lose?

It is understandable because so much is at stake as The Obama Administration and Congress deliberate.

In the midst of this fundamental policy decision, it is helpful to remember the core issues before us.  What really is at stake?  Who really is affected?  What is the scope of the issue?

Reuters has gathered a high-level view of the health care issues facing the nation:

* U.S. government economists predict that public and private health spending will hit $2.5 trillion this year, taking up a 17.6 percent share of gross domestic product.

* Americans spend more per capita on healthcare than any other country at $7,421 per person, the U.S. Centers for Medicare and Medicaid Services reports. Yet studies suggest Americans get poorer care than people in other industrialized countries that have national healthcare plans.

* Private insurance pays 35 percent of this; Medicare, the federal health plan for the elderly and disabled, pays 19 percent; Medicaid and the State Children’s Health Insurance Program pays 15 percent; 12 percent comes from other public funds; 7 percent from other private sources, and 12 percent is paid out-of-pocket by patients.

* The U.S. Census Bureau says 46 million Americans, or 15 percent of the population, have no health insurance.

* About 63 percent of U.S. employers offer health benefits to workers, according to the Henry J. Kaiser Family Foundation. Those who work at large companies are much more likely than those who work at small businesses to have health coverage. The self-employed must typically pay much more for coverage than those who get insurance through an employer.

* Growth in health-insurance premiums has outpaced workers’ earnings and inflation since 2004 by a ratio of 4 to 1, according to the Kaiser Foundation. Employers on average pay about 75 percent of that cost.

* Obama says he wants to cover more of these Americans but has not indicated how. Options include expanding Medicare and Medicaid, creating a public insurance pool, tax breaks for employers to offer coverage and requiring insurance companies to cover more people.

What affects you most about these issues?  Is it the cost, or perhaps the fact that government already pays 46% of health care bills?

For me, the most troubling aspect is the inefficiency of the system.  We pay more for care (from whatever source) than those in other industrialized nations, but often receive lesser care.  With health care taking up 17% of our GDP, that is a dynamic that must be addressed if we are to prosper on both a personal and national level.  But the solution, I fear, is much more complex and elusive than those in Washington can appreciate. And its pursuit may stretch the patience of those of us seeking certainty.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Dealing with the R Word

It is one word that makes all the difference in individual health insurance.  Rescission. The term is one of most misunderstood and sometimes confusing concepts for consumers taking out an insurance policy.  And what it means for consumers is that undisclosed health conditions can come back to haunt you.

Despite its confounding nature, the concept is fairly simple. When a consumer applies for an individual health policy, they are asked a number of questions, particularly regarding past and current medical conditions.  The insurer uses those answers to decide whether to issue a policy, and, if so, how much to charge for it.  All other things being equal, a healthier person generally pays less. For instance, someone who had three heart attacks in the past decade would pay a much higher premium than someone with no heart condition.  This is because the insurer will pay out more in claims for the heart patient, and so its charges more for coverage in recognition.

In a perfect world with perfect information, this would be a fairly straightforward process.  But health information is often filtered, not clear.  And that makes rescission a necessary component of the insurance process.

For a limited period of time (often two years), insurance companies are allowed to look at a consumer’s application to see if there was anything omitted or misrepresented.  For instance, was treatment for a back problem not disclosed?  If so, the company can either revise the premium required or completely rescind the policy.  In the latter instance, that means that the policyholder would not have been covered–premiums would be returned, but claims would be the responsibility of the consumer.

As you might imagine, instances of rescission are fairly uncommon.  Most policies are implemented and in force without this ever becoming an issue.

But, when it does occur, it often is with contentious and significant results.  Arguments may occur over what was required to be disclosed or whether the questions were clear or what the consumer knew at the time.

Such is the case in a high-profile case in Los Angeles, which goes to trial this month.  A consumer inovled in a serious car crash had his policy rescinded by Blue Cross for failure to disclose treatment for hypertension.   Was the policy confusing, as the consumer claims?  Even if so, can the insurer cancel it?  These questions will be a central to a case that set a precedent for the interpretation of this language.

We will monitor and report back to you.   Regardless of the immediate outcome here, though, rescission is a term that consumers are wise to understand.

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Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

A good place to start

With all the discussion and rhetoric and even politicizing around health care reform, a pathway toward real solutions is beginning to emerge.

There are many fingers to point in investigating why the cost of health care has skyrocketed in recent decades, but the bottom line is that our society is a  victim of its own success. New treatments and procedures have made it possible for us to stay healthy longer, and that simply costs money. Lots of it. Health care costs have gone up exponentially. Insurance reimbursements have gone up to cover the costs. And premiums have gone up to cover the reimbursements.  We live longer and have access to better healthcare.  And we are paying for it.

If there is a solution that controls costs while not sacrificing quality care, it must lie in a broad approach across all involved–health care providers, pharmaceutical manufacturers, insurance companies, consumers and government. That is why the pledge of industry groups is an esential and encouraging start. As Kaiser Daily Healthcare reports:

The six industry groups that pledged to reduce health care spending growth by $2 trillion over 10 years on Friday issued a statement reaffirming their commitment to work toward the goal, Roll Call reports (Murray, Roll Call, 5/15). The industry groups in a letter sent to President Obama on May 10 wrote, “We will do our part to achieve your administration’s goal of decreasing by 1.5 percentage points the annual health care spending growth rate. … This represents more than a 20% reduction in the projected rate of growth.”

The letter — which was signed by the American Medical Association, the American Hospital Association, Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, America’s Health Insurance Plans and the Service Employees International Union — did not elaborate on what specific measures the groups would take to achieve such reductions (Kaiser Daily Health Policy Report, 5/12). Obama in a May 11 public announcement of the groups’ pledge said the coalition’s goal was to cut the growth rate by 1.5 percentage points “each year,” which would total $2 trillion over 10 years (Norman, CQ HealthBeat, 5/15).

Everyone involved must engage in problem-solving, not rhetoric. Sgnificant cost-cutting requires nothing less. Some savings can occur through efficienciees (health care IT offers special promise), but the bulk must come through old-fashioned belt-tightening.  Some of this is logical, such as discouraging the use of hospital emergency rooms as a de facto primary care physician for the uninsured.  Other measures will require creative thought and leadership….and perhaps some pain.

But the result is well worth the struggles. Our health care system is on the verge of dysfunction, great but also often duplicative, inefficient and even elitist.  That must not be the legacy we leave the next generation.  We can fix this.  And, finally with the major players committed to action, we have a good place to start.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Making if fair or unfairly taxing?

You knew that the health insurance reform discussion in Congress could not go far until the issue of taxes came up. After all, someone has to pay for the proposal of coverage for all, and only 98 million Americans pay income taxes as it is.

The problem is that not of all us pay the same tax burden when it comes to the dollars we use for health insurance premiums. It matters greatly whether coverage is provided by your employer or you obtain your own coverage.

The Wall Street Journal explains it this way:

Right now, employers and their employees don’t pay taxes on health benefits. In 2010, this effective tax exemption will represent a loss of some $297 billion in federal tax revenue, according to the Lewin Group, a health-policy consulting firm.

That figure is catching the attention of Congress because it needs to find a way to pay for the health-care overhaul sought by Mr. Obama. A comprehensive plan that would include coverage for those now without insurance is expected to cost about $1.2 trillion over 10 years. So far, the government has identified where it will get about half of that sum.

Raising the benefit-tax idea presents a political problem for Mr. Obama because on the campaign trail he opposed it, while his Republican rival, Sen. John McCain, made it a key plank of his health-care proposals.

So, where do you come out on this thorny issue? Chances are your pocketbook is your guide, and that is understandable.

As for me, the key is equity moving forward. I would prefer that to mean that health insurance premiums are not taxes for anyone. That, however, does not appear to be reality of a highly ambitious system that is in need of substantial funding. And so, the price of comprehensive insurance coverage may be that all of us are taxed on some or all of the premiums paid. For millions, that is an effective tax increase.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Relay for Life and Reflection

Over the next 24 hours, I will join hundreds of others in my community in the round-the-clock Relay for Life, an American Cancer Society fundraiser that features nonstop team walking in a festival atmosphere.  Thousands more will walk in similar events in other communities over the coming weeks.  Even more will participate in other fundraisers, such as the Race for the Cure and the March of Dimes Walk.

If you plan to participate, we salute you.  If you have not, please find a way to donate or help as you are able.  These events are a key source of revenue for the important work of organizations working to alleviate or eliminate catastrophic diseases and conditions.  The need for research funding has never been greater, nor has the opportunity to make a difference both locally and globally.  The depressed economy has affected us all, including the work of these important groups.

My local newspaper reported this morning:

Nationwide, charities have been feeling the effects of the sputtering economy. The Center on Philanthropy at Indiana University keeps quarterly records of charitable giving around the country. According to its December report, 94 percent of nonprofit fundraisers are reporting a drop in giving due to the economy.

We are all hurting.  At the same time, we are on the brink of key breakhroughs  in the treatment and prevention of diseases once thought to be chronic.  It would be a shame if the health of the next generation became another victim of our economy.  Do what you can and do what you must.  Walk, donate, volunteer, say a prayer.  We are all in this together, and we need one another now more than ever.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Pomp and (covered) circumstance

As your college grad takes diploma in hand, it is a well-earned mark of independence. But that independence often comes with a price.

With that diploma, new graduates typically fall off the health insurance provided through their parents or their school. With job hunts ongoing, many face being uninsured.

Young and seemingly invincible, many may consider goind without insurance a risk worth taking. Too often, that turns into a regret. And, the sad truth, it need not be.

Recent graduates still in the job market are perfect candidates for individual medical policies that will cover whatever calamities await at a surprisingly affordable price. Often available for $100 a month or so, a policy is a small price to pay for even healthy graduates, who are active in a number of activities.

Consider the case of simple broken ankle from a skiing or sporting accident. The cost of hospital and doctor visits, tests, minor surgery and therapy can easily surpass $40,000. That makes a $100 a month policy a true bargain. The last thing a new graduate (or his or her parents) need is another sizeable debt to pay off.

Graduates and parents, maybe the best gift this graduation season is the protection that comes with an affordable individual medical policy.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

Fool me once….

We have long cautioned those who have lost their health insurance about assuming that COBRA is their best alternative.
Now, 70-year-old Frank Farbanec proves our point. Frank told his story to NJ.com, which reported as follows:

Frank retired five years ago after a 23-year career with AT&T, using company-sponsored plans for his health care. When he turned 65 in 2003, Farbanec enrolled in an Aetna Medicare HMO through AT&T, and when his wife Bernice became eligible, she signed on, too.

Then last December, the Cranford man received the annual Medicare booklet and decided to compare his plan to other available coverage.

He found an individual plan — one of several offered in his county — that he thought had more benefits for a cheaper premium: $208 per month for the couple, compared to the $349.70 per month he’s paying for the AT&T plan.

“I kept looking for catches,” said Farbanec. “It was a generally accepted belief that any group health plan sponsored by a major corporation would be cheaper and offer better coverage than any individual plan.”

After writing several letters to the AT&T benefits department and company executives, Farbanec said he didn’t get an answer for the large disparity. Thinking AT&T may not be offering the best possible health care plans to retired employees, he contacted others for advice and soon decided that the individual plan was a better deal.

That is Frank’s story. The lesson is clear. It pays to shop around, look at individual medical policies and compare all features before making a choice.

Frrank did, and now he is saving $1700 a year.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).

What comes around….

The Wall Street Journal reports on a significant spike in already increasing health insurance costs caused by workers scheduling treatments in anticipation of higher costs in the future.

What comes around goes around, as employees continue to absorb more of their insurance costs.

The Journal reports:
It looks like many employers aren’t waiting to see whether the recession eases before year’s end. In a new survey conducted by Mercer, the employee benefits consulting shop, nearly half of the 428 employers polled said they plan to shift more health costs to employees in 2010.

One-fifth of the companies said they planned to add or switch to a high-deductible or “consumer-directed” health plan with a health savings account, perhaps doubling the percentage of employers who offer such plans, Mercer said.

A big reason is that employers say the recession isn’t just crimping business; it’s also expected to drive up their health care costs. Those surveyed said they expect their health benefit costs to spike an average 7.4% this year (compared to the 6% increase employers originally forecast). Employees in fear of layoffs are likely using benefits before their coverage might end, said Linda Havlin, a worldwide partner at Mercer.

“Knowing that coverage could end or be significantly changed is an incentive to ’store up’ procedures and medications that could be unaffordable to an unemployed person,” she said. Some 15% of employers in the survey said that employees are already tapping health plan benefits more than expected this year.

Next year, employers hope to lower slow the growth of health care costs to 5.2%, the survey showed.

Other SimpleCoverage.org topics:

Individual health insurance, health insurance coverage, health insurance plans, health insurance comparisons, personal health insurance, group health insurance, health insurance options, temporary health insurance, health insurance glossary, COBRA health insurance, health savings accounts (hsa’s).