The must-read new story today is by Lisa Girion of the Los Angeles Times. In “Health insurers refuse to limit rescission of coverage,” we find the clearest case yet why the private health care industry will never, ever, not in a million years, come even close to solving the health care crisis.
In a nutshell — yesterday three big insurance company executives — WellPoint Inc., UnitedHealth Group and Assurant Inc. — told the House Subcommittee on Oversight and Investigations that their business models depended on being able to cancel the health insurance policies of customers who cost them too much money. An investigation by the Committee had found that over a five-year period, these companies had canceled the coverage of more than 20,000 people in order to avoid paying more than $300 million in medical claims.
One of the execs claimed the rescissions — industry jargon for canceling coverage — were necessary to protect the companies from fraud. People lie about preexisting conditions on their applications, he said, and this drives up the cost of insurance for everyone else. I’ll come back to this point in a moment.
In practice, this means insurers target people with high-cost conditions such as breast cancer and lymphoma and direct employees to examine patients’ paperwork for any pretense to cancel coverage. People with innocent mistakes and inadvertent omissions; people who were unaware of a preexisting condition at the time they filled out the application because the symptoms hadn’t developed yet; people whose preexisting conditions were minor and had nothing whatsoever to do with the disease costing the insurer money — such people found themselves dumped out of the health care system at their time of greatest need.
A Texas nurse said she lost her coverage, after she was diagnosed with aggressive breast cancer, for failing to disclose a visit to a dermatologist for acne.
The sister of an Illinois man who died of lymphoma said his policy was rescinded for the failure to report a possible aneurysm and gallstones that his physician noted in his chart but did not discuss with him.
Karen Tumulty at Time presents several other heart-breaking, and outrageous, examples.
Of course, you might remember that Michael Moore documented this practice quite nicely in Sicko. We all knew this was going on. Members of the House Committee feigned surprise.
But I want to go back to the part about rejecting people with preexisting conditions. Who above the age of 40 does not have a preexisting condition? For that matter, what percentage of young adults freshly cut loose from their parents’ policies find they cannot obtain insurance because they failed to get through childhood without a preexisting condition?
The insurance companies are saying they can’t make a profit unless they deny coverage to people with preexisting conditions. How is this not an admission the private health insurance industry is a big, fat FAIL?
Righties just love to tell us that the reason health insurance is so expensive in some states, like New York, is that those states have (Cue: “Fortuna, Imperatrix Mundi (O Fortuna)”) regulations. And what are those regulations? Chief among them are provisions that limit the insurers’ abilities to deny coverage to people with preexisting condtions.
So, in many states, a middle-aged person with no serious health problems who was once prescribed Lipitor for high cholesterol would be unable to obtain health insurance at any price. In New York, this person can get insurance. Yes, it’s so expensive most people can’t afford it, but it’s obtainable for those who can pay for it.
What this says to me is that relying on a private insurance industry to pay for health care costs is unworkable. A private insurance industry simply cannot do the job of paying for health care, because the only way a private company can make a profit is to deny coverage to people who are actually sick so that they don’t have to pay those bills.
My next question is, how obvious does this have to get before people see it?
I’m sure some people do lie on their insurance applications in order to obtain coverage. But in most industrialized democracies, this wouldn’t even be an issue. You’re a citizen, you get health care. Whether you once had acne treatments or took Lipitor or had a gallstone or even had a life-threatening disease, you get health care. Because the purpose of the health care system in most countries is delivering health care, not making a profit.
Related -- Regarding the recently released CBO estimate of $100 trillion over ten years — see Extra Klein for why the CBO estimate is deeply flawed. See also “The Bright Side of the CBO Snafu.”
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Comments
This is all part of a plan to have everyone covered under the government umbrella. It is a big fat government failure waiting to happen.
If we don't change anything but go on as we are now -- U.S. health care spending is expected to increase at twice the rate of inflation for the next decade reaching $4.3 trillion in 2017, or 20 percent of GDP.
And you're worried about a mere trillion? Hah!
There are several fundamental problems with all of the plans proposed by the Democrats.
1. The plans are cost centered as opposed to patient centered. In other words, the Democrats are not pro-choice. In every case we can see that the Democrats have come out on the side of the government's right to mandate rather than patient choice. This is true in health care and in the abortion issue where the government protects only select choices. The government makes choices and the people abide by those choices.
2. The government uses flawed statistics in order to push its health plan proposals. The myth of the 45 million uninsured and skewed life expectancy and infant mortality numbers are examples.
3. Democrat proposals are going to cost much more than they will admit. Haven't we seen this somewhere before? Medicare costs are much higher than published with a debt of $38 trillion and fiscal collapse looming by 2018. Now, President Obama wants to add another entitlement program.
Goals of a good health care system:
1. Simplicity. (Mr. Obama and Ms. Pelosi, this means lack of complexity)
2. Available to all members of society, including the poor.
3. Offers good, basic lower cost health care options.
4. Portable. Not tied to employer or the government.
5. Prevention of exclusions for those who have had "pre-existing" problems.
6. Expandable. Option to purchase more extensive plans according to personal choice and ability. There is no Shangri-La. Wealthier people in Britain buy private insurance and those in Canada come to the United States for care. The Wyden plan proposes options for more extensive plans as well.
7. Shared, sustainable cost and some personal financial responsibility for all.
8. Patient health centered care. Preventive care with financial penalties for continued poor choices and rewards available for good health practices.
Solution:
1. Don't pass any of the Democrat health care plans. Savings of at least $3 trillion over the next five years.
2. Immediately do away with Medicare, Medicaid, and The Center for Medicare and Medicaid services. No other major industrialized nation has a separate system for the elderly, disabled and the poor. Scrap the Joint Commission on Hospital Accreditation. Savings of nearly $1 trillion in federal tax dollars yearly, $1 trillion in savings for states and billions in savings by dissolving the tyrannical Joint Commission.
3. People should be responsible for purchasing their own health care, not the government or the employer, making health insurance completely portable. Scrap Hillary Clinton's HIPAA act at a savings of billions yearly. Let's make it HIPAA-posthumous.
4. A Health Insurance Company must offer a good basic low-cost health care plan with expanded health savings accounts. Taxpayer cost zero dollars.
5. No health exclusions for three years. Taxpayer cost zero dollars.
6. Health plans should promote healthy practices and preventive health. Taxpayer cost zero.
7. For the poor, government should subsidize the premiums, not be involved in paying providers. Taxpayer costs by my estimate around $600 billion per year.
8. Retired people of lower means should be helped as above but should not have a separate insurance plan run by the government. Sorry, Medicare is dead. Promises were broken, but we are mature people and we need to get over it. Let's not let it happen again! Taxpayer cost around $300 billion per year.
9. End tax penalties for individuals purchasing individual health insurance. Taxpayer cost zero dollars as these penalties are merely punitive, designed to make people dependent.
10. The health insurance companies in each state should have the option of creating a risk pool from some of their premium funds. Taxpayer cost zero dollars.
11. Laws should be changed to allow for private health co-ops to be formed as an option for those so inclined. Taxpayer cost zero dollars.
12. Patients should be free to change insurance plans at least twice yearly and since their insurance would not be controlled by their employer or the government no permission is needed from them. Taxpayer cost zero dollars.
13. There should be no legal right for insurance plans to dismiss competent and qualified contracted physicians for "no cause", when that no cause is really due to the physician acting as a patient advocate.
14. Tort reform with penalties for frivolous lawsuits and the loser paying some of the costs.
1. Separate for profit and not-for-profit healthcare.
2. Let the government subsidize non-for-profits through grants - to fund health care for the poor.
3. Let rich people have all of the services they want, so long as they pay for them. Note: for profits in my model are not eligible for any subsidies.
4. Get rid of for profit insurance completely.
5. Get rid of Medicare/caid etc. completely.
Re: "Democrats have come out on the side of the government's right to mandate rather than patient choice. This is true in health care and in the abortion issue where the government protects only select choices. The government makes choices and the people abide by those choices."
I have absolutely no idea what you're talking about.
Re: "The myth of the 45 million uninsured and skewed life expectancy and infant mortality numbers are examples."
I've seen the right-wing spin that tries to make that argument, and it's hooey. The spin about infant mortality is especially pernicious, since the U.S. infant mortality numbers have been a concern in the medical community going back several decades.
The argument is that (1) infant mortality is the number of infants who die between birth and their first birthday per 1000 live births; (2) infants in some other countries that are counted as stillbirths there would be considered live births here, meaning some dead babies count in our statistics that wouldn't count in other countries' statistics; (3) therefore, infant mortality isn't really a problem. The problem with this argument is that the actual number of ambiguous births is not so large that it make much difference to the overall statistics. When this discrepancy is accounted for, we move up from next to last in the developed world to about fifth from last.
The other reason this is a howler is that it doesn't explain the huge discrepancy in African-American infant mortality -- 2.3 times higher than the rate for non-hispanic whites. I assume physicians are not using different criteria for white and black babies. There are also big discrepancies in infant mortality between states. Some of the poorer (mostly "red") states have much higher infant mortality than other states, which drags down our overall standing.
Re: "Democrat proposals are going to cost much more than they will admit. "
I've responded to this 26 times already. Yes, we can all see that you've soaked your head thoroughly in Republican Party propaganda. In fact, we've all heard this nonsense so many times we can write your comments for you. Do you ever think an original thought, or are you just a pre-recording?
I've responded to this 26 times already. Yes, we can all see that you've soaked your head thoroughly in Republican Party propaganda. In fact, we've all heard this nonsense so many times we can write your comments for you. Do you ever think an original thought, or are you just a pre-recording?
Barbara O'Brien
June 17, 2009 12:35 PM
Can you name ANY government program that has come in at the stated cost? I didn't think so.
The 45 million unisured includes some young people who choose not to carry the insurance at this time. It also includes people who have lost their job for as little as 1 day.
These are not all my own ideas. I was just posting them to see what ideas others may have. Apparently your ideas include personal attacks.
I agree with you on the infant mortality rate.
My post, if anyone wants a few more details on the practice, is at:
http://open.salon.com/blog/steve_klingaman/2009/04/09/invisible_uninsured--a_new_american_apartheid
About as often as private projects, I suspect. For example, one of the several reasons the cost of the Iraq War got so out of control is that the Defense Department gave many tasks the military used to do to private contractors. Cost skyrocketed.
The "private sector is always more efficient than the public sector" is a myth. You can fnd success stories and horror stories on both sides. The larger point, which you steadfastly choose to ignore, is that the projected costs of changing the system are dwarfed by the projected costs of NOT changing the system.
"The 45 million unisured includes some young people who choose not to carry the insurance at this time. It also includes people who have lost their job for as little as 1 day."
More and more young people are uninsured because entry-level jobs don't come with insurance. My son is in that predicament now. He cannot get health insurance he can afford and it doesn't come with his job. The New York Times had a devastating article on young people who can't get insurance awhile back --
http://www.nytimes.com/2009/02/18/nyregion/18insure.html
It begins:
"They borrow leftover prescription drugs from friends, attempt to self-diagnose ailments online, stretch their diabetes and asthma medicines for as long as possible and set their own broken bones. When emergencies strike, they rarely can afford the bills that follow."
And "It also includes people who have lost their job for as little as 1 day" is hyperbole. I doubt such people show up in statistics.
Blackflon, I am stick to death of the denial and the excuses, and that's all we get from conservatives but denial and excuses.
Blackflon, I am stick to death of the denial and the excuses, and that's all we get from conservatives but denial and excuses.
Barbara O'Brien
June 17, 2009 01:37 PM
http://www.businessandmedia.org/printer/2007/20070718153509.aspx
Pay careful attention to the last 2 paragraphs.
I realize the standard conservative answer to any domestic problem is to (1) deny there's a problem; (2) blame Democrats; (3) blame government regulation; or all of the above. However, none of those three options apply to the present situation. At least try to come up with something else, or please go away. Thanks much.
a-I'm fat. PEC (pre-existing condition) #1
b-I'm myopic. PEC#2 (and yes, it counts, believe it or not)
c-I have a familial disorder called Hashimoto's thyroiditis. Never goes away. PEC#3.
I am a single mother making right at 50K (gross) a year, and I have over 70K in student loans. No way in hell I could pay for all my own care (such as with a Medical savings account). What if I need a hysterectomy? There goes that idea.
No way in hell could I afford the kind of premiums I'd have to pay if I didn't have employer-provided insurance. Another idea gone.
I appreciate the conservatives' wish to keep government hands out of most things. But I think this has more to do with their not wanting to "pay for anyone else" and they truly don't see that they already do.
And last, I am a health care worker. Though I know you guys don't mean it that way, I find it utterly incorrect and frankly distastefully offensive that you label the insurance industry as the "health care industry." They are two different animals. Hospitals don't make profits by letting their patients die. Insurance companies do.
Yes. There is no one on this earth who gets to age 40 without pre-existing conditions. Hell, a lot of people don't get to age 20 without them. I once was denied coverage for my daughter (age 18 months) because she'd had a routine 20-minute outpatient surgery about three months before I lost my job.
I don't think anyone who hasn't been through the fun and games of "no we won't insure you because of ____" really understands what this is like. For me, it was "we'll insure your family except for your daughter. Sorry." For me, along with the utter panic of being jobless, I had an uninsurable kid. Lucky for me, it was a totally routine thing that she had fixed and it was over. What about people with any kind of chronic disease?
Our system is so broken.
Also, someone mentioned something about other types of insurance like auto and life insurance. My car was stolen 4 years ago, and despite not ever having an accident and not getting a traffic ticket for a long time, I had a hard time getting my auto insurance co. to pay for what it's supposed to pay for.
First of all, the claims agent accused me of trying insurance fraud with my ex-husband. Secondly, she also wanted me to submit all receipts and/or credit card statements from all things that were in my car (I had home owner's insurance through the same company). I don't save receipts for more than a month or so, unless I've used a product and know it's not defective.
It was clear that she was trying to get out of paying me what the company owed me. And, when my car was found in Detroit (where it was stolen), I wanted it towed to the dealership where I bought it, which was about 50 miles away. The claims agent told me that they wouldn't pay for it, because it was too far to have it towed. I had it towed anyway, and the towing company charged the insurance company for it.
On top of that, whoever stole my car incurred $5,000 worth of damage to it, and the insurance company wanted it totaled... despite the fact that nothing under the hood was touched, so the car ran just fine. I told the dealership to fix my car and tell the insurance company that I wasn't totaling it.
And, to top that all off, I was treated like crap by the Detroit PD. It also accused me of insurance fraud, and I had to resort to yelling at them and at the insurance company to find my car (Why would I want my car found and fixed if I was going to commit insurance fraud?). I swear, to this day, that the cops had something to do with my car being stolen, because that same night, several cars were stolen from where mine was taken, and all of them were either Jeep Cherokees or Jeep Liberties, and when I mentioned that something was very fishy about that, the cops had curious looks on their faces. I don't trust them one bit, because of the way I was mistreated.
I know this isn't a health insurance example, but all the insurance companies are one and the same in what their motives are.
All I have is a question, the thing that totally puzzles me about the whole nationwide discussion. Everything I've read, pro and con, agrees that we in the US spend at least 50% more per capita than the next highest-spending developed country in the world (which, I believe, is Switzerland) and the others cover universally while we only cover in the neighborhood of 60% of the population.
Yet it seems that this spending not part of the discussion. It is as if all the costs of a new insurance system will be brand new spending.
The president seemed to approach it when he mentioned savings in his speech to the AMA but he only brushed up against it.
Is anyone, any where taking present spending into consideration?
"Yet it seems that this spending not part of the discussion. It is as if all the costs of a new insurance system will be brand new spending."
Thank you. That's a big part of the problem; people hear a new program will cost X, and they assume that cost will be on top of what we already pay. But that's not necessarily the case. In many cases we're already spending that money on health care; we're just doing it in a really scattered and inefficient way. The fact that so many people are uninsured adds a huge amount of cost to the system, for example, that could be brought under control if more people had insurance or, even better, if we went to single payer.
People seem to often describe insurance coverage as health care. This muddles the issues. Insurance companies provide no care, only pay for care...we all hope. In reality, they avoid paying in any way they can.