Just like lunch, there is no free healthcare

Fixing blame is easy. Taking responsibility is the hard part.

So it is with healthcare reform, where insurance providers currently are tied to the whipping post as Congress debates a public option for coverage.

As is too frequently the case in politics, this jingoism is misplaced and oversimplified.

And the danger is that consumers will be duped into believing they are actually getting something for nothing.

That is the sirens’ call of the so-called “public option,” a government-run insurance plan open to all, supposedly to put a check on the excesses of private carriers. Everyone gets health insurance and the taxpayers don’t have to pay for it, say the spin doctors of this proposal.

Pardon me, but who actually believes this?

As a commentor wrote in the New York Times this week:

“In practice, however, if a public option is available, it will probably enjoy taxpayer subsidies. Indeed, even if the initial legislation rejected them, such subsidies would be hard to avoid in the long run. Fannie Mae and Freddie Mac, the mortgage giants created by federal law, were once private companies. Yet many investors believed — correctly, as it turned out — that the federal government would stand behind Fannie’s and Freddie’s debts, and this perception gave these companies access to cheap credit. Similarly, a public health insurance plan would enjoy the presumption of a government backstop.”

In other words, don’t believe the rhetoric. If there is a public option, taxpayers ultimately will pay for it.

So, as some suggest a public option as a panacea that will right the wrongs of private insurance, remember to think with your wallet.

Just like lunch, there is no free healthcare.

Wrong from the start

How many uninsured Americans does it take to create a health care crisis?

It seems more than there really are.

There are 46 million uninsured, we have been told over and over.  Democrats use it. Republicans use it.  Media use it. Economists use it.

And they are all wrong.

The Wall Street Journal explains why:

The Census Bureau estimates that the number of uninsured amounts to 45.7 million people. But the agency might be overcounting by millions due to faulty assumptions. Another problem: That 45.7 million figure includes undocumented immigrants, even though they aren’t likely to be covered under new laws.

But that hasn’t stopped both parties in Congress from using the flawed numbers liberally, as they debate health-care overhaul this summer. That’s a reprise of what happened 15 years ago, when the Clinton health plan foundered under differing cost estimates wielded by opponents. But such projections are even more uncertain than today’s fuzzy count of the uninsured, depending on tricky assumptions about people’s economic choices.

The numbers are important because they provide the key input for determining the projected cost and reach of any reform plan.  If the numbers are not correct, the projections will not be either.

Why are the numbers wrong?  There are several reasons.  For instance, there are an estimated 6 million undocumented workers included in the number of uninsured, but they likely will not be covered.

As well, the Census Bureau assumptions in interpreting its data are highly suspect. It assumes that a high percentage of those refusing to answer the health care section of the census are uninsured.  In its mandatory health care program, Massachusetts made similar assumptions.  Its estimate of 650,000 persons was overstated by 39%.

Finally, no one can project with any validity the impact of new government regulations on employer-sponsored plans or the further fallout from the recession.

Put it all together and decisions are being made based on numbers that are incorrect, and quite possibly by a substantial amount.

There is only one equation that we know to be correct. Wrong inputs equal wrong policy.

Before Congress jumps again to throw a lifesaver to those without insurance, we need to better understand who is out there waiting for aid.

Is Young and Uninsured Worth the Risk?

As the debate over health care reform rages on, we are reminded that 46 million or so Americans have no coverage. Now, a new federal study sheds light on a key part of this group–those from 19-23.

A report from the Agency for Healthcare Research and Quality finds that 5 million Americans in this group do not have health coverage. Further, consistent with the feeling of invincibility that is common in youth, 30 percent do not believe it is worth the cost.

The analysis by the federal agency found that 46 percent (2.2 million) of uninsured young adults worked full time and 26 percent (1.3 million) worked part time. Some 81 percent of the 5 million young adults who were uninsured through all of 2006 were not full-time students.

The report by AHRQ also shows that in 2006:

- Young adults who were uninsured for the entire year were only about half as likely as those who had insurance part of the year to have a usual source of care, such as a family doctor (36 percent vs. 70 percent).

- More than two-thirds of young adults without insurance for the entire year did not see a doctor.

- Young men were more likely than young women to be uninsured all year (30 percent vs. 18 percent).

The analysis raises key issues for any legislation, including how to educate these consumers regarding the perceived value of insurance. While the feeling of invincibility is somewhat understandable, this also is a group that often takes part in riskier activities and extreme sports, and that all-too-often leads to the need for medical attention.

Medical bills from a torn ACL or rotator cuff injury–too common sports-related injuries–can be substantial. Indeed, they may overwhelm the resources of a young worker or part-time student just starting out. If not paid, the consequence is credit and financial hardship for the uninsured and effectively higher healthcare costs for the rest of us as those costs are “socialized” and passed on to us.

Health insurance, especially for major medical issues, is something that even “invincible” young adults cannot afford to be without. But, how do we get that message across? Congress must consider this as it sorts through the path to effective reform.

Costs a lot, does not do much

Consumers waiting for government to “fix” health care are justified in casting a leery eye toward anything portrayed as a solution.
After all, just a few months ago, we invested billions in bailouts only to see much of that money frittered away in untraceable ventures and even more lost in subsequent bankruptcies.
If we are not careful, healthcare reform may follow the same route. With everyone jumping to craft an “answer,” we are in danger of not really solving the myriad of issues before us. (Two of those issues–skyrocketing health care costs and our ever-expanding national waistline–will be treated in later blog posts.)
Now comes this news from the Congressional Budget Office regarding the Senate proposal to fix healthcare:

The Senate Health, Education, Labor and Pensions Committee’s health reform proposal would cost taxpayers about $1 trillion over the next decade and only insure 16 million people, about one-third of uninsured Americans, Politico reports. More individuals would lose employer-provided insurance they already have, or move away from government programs.

If correct–and the CBO is one of few consistently fair voices in Washington–we will have spent a trillion dollars only to create a host of other problems.

If this brings flashbacks of bailouts to mind, you are not alone.

We know all too well what happens when government acts too quickly without a full appreciation of the consequences.  We also know that throwing money at problems does not make them go away, and often only leads to other problems.

Before we jump again in the blind hope that there is somewhere soft to land, policymakers would do well to fully survey the landscape.  Otherwise, if we continue on the rushed route we are on today, consumers would be wise to buckle up because it is going to be bumpy ride.

Cold, hard facts

The consulting firm PricewaterhouseCoopers released its report predicting 2010 heath care costs for business, and it is not encouraging. According to a press account:

Despite the worst recession in 25 years, U.S. employers can expect to see their health-care costs rise by 9% next year, according to a new report by PricewaterhouseCoopers’ Health Research Institute. As a result, 42% of employers expect to increase the amount that employees must contribute to health benefit plans, and 41% expect to increase the amount of co-pays, deductibles, and other health costs the employee must pay.

The only good news: The 9% climb is slightly lower than the increases of the past two years. Medical costs to employers rose 9.2% in 2009 and 9.9% in 2008. But the health-care inflation rate for corporations still significantly outpaces overall inflation and the increases in worker earnings. It is even higher than the health-care inflation rate for the nation as a whole, currently running at 6.9%.

The consulting firm said that, in the last five years, health insurance premiums for employees have increased four times faster than wages. And the recession is actually having a somewhat perverse effect on costs, according to Pricewaterhouse principal Michael Thompson, because employees worried about losing their jobs, and thus their insurance coverage, are accelerating their use of health care while they can still afford it. Other factors driving the increase: the rising cost of care, the aging of the workforce, and the increasing rate of obesity.

Shifting Costs to Employees
Employers do not plan to get out of the insurance game, however. “Health insurance is a benefit that is very much valued by employees,” Thompson says. “Companies will literally try everything else before dropping coverage altogether.” Instead, they are shifting more and more of the cost of that coverage onto employees. Workers now pay roughly 25% of their insurance premium, says Thompson, and that share is heading toward 30%.

The prediction confirms what many of us already know–health care costs are rising exponentially and workers with group coverage will directly pay more of those costs.  Of course, paying 30% of premiums, as employees do on average under group coverage, is still a great deal compared to those paying the full cost for coverage.  But it still sends a shock at a time when wages are stagnant and employment is sometimes uncertain.

The old adage that ” I am working for healthcare” is becoming more true with each passing year.

Consumers take the wheel

Amid the complexity and political in-fighting surrounding health insurance reform, a glimmer of positive news is coming from consumers these days.

As Congress continues to propose and debate trillion dollar options for health insurance, consumers themselves have begun a quiet little revolution of their own. Data being reported from several sources indicates that Health Savings Accounts are beginning to make a dent in the uninsured market.

A published news report today indicates:

The increase in CDHPs with Health Savings Accounts is growing in both the individual market as well as the group market. The option is especially appealing to small business owners who can save on premium, contribute something to their employee’s HSAs and still be paying less than they paid for their traditional PPO group coverage.

Even more surprising is the demographic that is buying HSAs. Once thought to be appealing only to the rich, the young and the healthy, several majors insurers have reported an unexpected trend.

40% of those buying Consumer Drive Health Plans (CDHPs) and investing in Health Savings Accounts are reporting average income of under $50,000. One company, Assurant, reports that 27% of those purchasing CDHPs and opening Health Savings Accounts have a net worth of less than $25,000.

The most encouraging news which is being reported by three different insurance sources is that 33 – 40% of those buying CDHPs with HSAs were formerly uninsured.

Health Savings Accounts remain a sometimes little known and misunderstood funding tool for medical care.  Consumers can direct income to be saved tax-free and used on qualifying health and medical expenses.  In doing so, consumers leverage their health care dollars much further than otherwise would be the case.

The news that as many as 40% of new HSA customers previously were uninsured is especially encouraging.  A growing number of consumers are taking control of their health care dollars and putting them to good use.  In this time of uncertainty, that is great news.

For more information, look at websites that describe HSAs in more detail.  We especially like www.HSAInsights.com, which explains the terms and demonstrates how using an HSA can save a typical family thousands of dollars.

Insure my what?

The name of the website elicits a double take, and that it what it is designed to do at first glance. But, beneath the surface, there is a lot more to www.insuremonkey.com.

When I reviewed a press release about the site, which purports to help consumers evaluate individual health insurance plans, I was skeptical.  After all, 25 years as a consumer advocate have taught me to question every claim.  And the name of the site, while catchy, does little to inspire confidence as a serious research tool (of course, google and yahoo do not on their face either).

A deeper look left me impressed however.  This site can really help consumers through the maze of individual health insurance. Taht is because Insure.Monkey isn’t trying to sell you anything (although you may end up buying). Nor does it try to overtly push a particular product. Rather, it aims to give you the information needed to make good decisions.

InsureMonkey elicits some general information from a potential applicant and then presents a range of potentially available individual medical plans with monthly premiums, various deductibles and other costs, and the name of the company.  From there, you can click on the option you prefer to be taken to the application process. 

In my case, after inputting my basic information, InsureMonkey suggested a dozen or so plans from several insurers, with a variety of plan options.  They were ranked in order, but I could select any.  When I chose a plan with a $250/month premium (not bad at all for my age group), I was taken to the company’s website with an option to either start the application process or seek more information.  Quick and easy. (I should note, if you have only been covered by group insurance, the process for individual coverage is considerably more detailed because your specific risk, as opposed to that of the group, is being evaluated.)  This is as painless a process as there is for consideration of individual coverage.

But, here is the kicker that made me a believer in InsureMonkey as a truly exemplary site for individual health insurance.  After filling out my forms online late at night, I received a call the next morning from an InsureMonkey representative to thank me for visiting the site and asking if I needed more information or anything explained in more detail.  That makes this site a winner.  Seeking individual coverage can be confusing, regardless of how well-designed a site may be.  Terms can be confusing, no matter how well explained.  It is reassuring to have a call with a real human to follow-up on those issues.

Insure.Monkey.com.  Silly name.  But this once-skeptic is now a convert. 

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).

Desperate buyer beware

It was only a matter of time. As persons with chronic health conditions and no insurance coverage become more prevalent and more desperate, the scam artists have emerged.

CNN reports this week on the what it calls “fake health plans.”  These plans, offered without regard to pre-existing conditions or other underwriting issues, purported provide deep discounts on doctor visits, prescriptions and even procedures for a relatively low “one-price-fits-all”  monthly payment.

Despite the obvious and suspicious nature of these offers, some consumers are so desperate for care that they send in their money.  Too often, they find out too late they have been scammed.  Doctors listed in the plan do not accept the plan.  Neither do pharmacies.  Neither do hospitals. And consumers in need of medical assistance are left even worse off.

Between two and four million consumers have purchased health care discount cards.  Not necessarily every plan is a scam.  But enough of them are to prompt the Federal  Trade Commission and eight states to bring regulatory actions and lawsuits for fraud and deception.

How should you proceed?  CNN suggests that if you are considering such a health care card, suspect a scam if the following occurs:

1. You learn of the discount card from a blast fax or Internet popup ad.

The National Association of Insurance Commissioners considers this a red flag that you’re about to be scammed. You can read the rest of the warnings on its Web site.

2. They promise a certain percentage savings.

“A 30 percent discount means nothing. Thirty percent off of what?” asked Nancy Metcalf of Consumer Reports.

3. They use the term “guaranteed coverage.”

This makes the card sound like insurance, which it’s not, says the Coalition Against Insurance Fraud. The coalition also lists other scam alerts on its Web site.

4. They won’t give you a list of providers until you sign up.

The discount card company should tell you the providers up front. If they won’t, hang up the phone. If they do, call the providers and verify that they take the card.

5. It sounds too good to be true.

“If you’ve looked into getting regular insurance and gotten a price, and then you find something way cheaper, that’s a huge red flag,” Metcalf said. “It’s cheaper for a reason.”

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).