Tag Archives: Insurance

Do not be deceived by health savings plan proposals


U.S. Capitol

 

As the Congress discusses the reconfiguration of our health care system, one “solution” that keeps coming up is various options related to health savings plans. These plans need to be recognized for what they really are, a con of the health care consumer. Sure, you can get health care, but you must pay for it yourself with money that you have saved. Saving money sounds like a good idea, and it is. It is great to have saved a little extra to cover those expenditures that fall outside of your normal budget. The problem here is that the cost of medical care can be so excessive that it would be virtually impossible to save enough.

Medical care is expensive. There are stories of Canadian tourists who find themselves with a two hundred thousand dollar medical bills for having a baby in the United States.  Any serious medical illness can easily run into the hundreds of thousands of dollars. Think about an emergency situation such as a heart attack or a stroke. And for those who believe that they are too healthy for such an emergencies, think about getting hit by a car while walking or riding your bicycle.

That is why insurance is needed. Perhaps the best that you could ever hope for from a health savings plan is enough money to cover your deductibles and copays. That is pretty much what happened to me last year.

I have excellent medical coverage for myself and my wife through my employer. I have no deductibles and modest copays that are capped at $3,000 per year. I had a series of medical issues, nothing major and certainly nothing life threatening. I had three emergency visits, three nights in the hospital, and two outpatient procedures. The total cost paid by my insurance carrier was in excess of $65,000. My out of pocket cost was capped at $3,000.

When a patient does not have medical insurance the hospital will jack up the cost to well above what an insurance carrier would pay. If Blue Cross would pay $30,000 for a particular procedure, an uninsured patient will likely be charged $50,000. The reason for this is that the hospitals offer volume discounts to major insurance carriers. Thus, the $65,000 in medical expenses that I incurred last year could have easily been charged at over $100,000 if I did not have insurance.

It is one thing to save $3,000 to $5,000 to cover deductibles and copays. It is quite another thing to save the hundreds of thousands that a serious medical condition might require. And for many households, even saving $3,000 to $5,000 is virtually impossible. There are so many other priorities for our dollars. It is estimated that for 40% of the households in our country, an unexpected bill for $500 could be a financial calamity. What happens if the furnace goes out or the truck breaks down? For some, saving $3,000 to $5,000 in a Medical Savings Account could take 5 to 10 years, and that assumes that no withdrawals from that account would be required during that time period. .

The idea of offering up health savings plans as an alternative to health insurance is beyond ludicrous.  It is a glib and irresponsible diversion tactic offered up by those who wish to deny coverage for medical care.

Health Care Crisis in the US


Health Care Issues

The Unites States spends 17% of GDP on healthcare, or over $8,400 per capita, more than any other nation.  No other developed country spends more than 12% of GDP on medical care. And yet our people have some of the poorest healthcare outcomes in the developed world.  Some 46 million Americans are uninsured.  We rank 30th in infant mortality.  Our life expectancy is 50th in the world, behind all developed nations.  Medical expensed is a major factor in 62% of personal bankruptcies.

Spending so much to get so little.

CLICK ON GRAPH TO ENLARGE

Truly we are not getting the maximum value for our health care expenditures.

We need to have universal access to healthcare.  This does not need to be accomplished through a government bureaucracy, but it does need to be done.

Universal healthcare will provide for early diagnosis and intervention, saving billions of dollars in the long run.  As it is now, people without access to health care normally wait until their condition requires emergency room treatment at high cost.  They are forced to wait until their minor medical issues become crises before their conditions can be treated.

Under the current health care system medical care is delayed for those who can least afford it.  Imagine a small child with an earache.  The parent is forced to delay medicalcare due to the high cost of treatment, let’s say $200 for a doctor visit, lab tests, and prescriptions.  Without access to healthcare the child’s condition worsens until the child is taken to the emergency room with a high fever and unbearable pain.  Because of the delay a relatively minor malady that could be treated for a few hundred dollars may now cost thousands or even tens of thousands of dollars.  And on top of this, the child may have become deaf or suffered other permanent impairment requiring a lifetime of special care.

Single payer health care will end the costly paperwork and delays caused by our current multiple-payer system.  Health care professionals would be able to concentrate on providing health care as opposed to figuring out who is going to pay and how to prepare and submit the paperwork for reimbursement.

Pre-existing conditions will no longer be an issue as all will have insurance regardless of their condition.  Everyone can be covered if everyone pays.

Universal healthcare will focus on prevention and early intervention.  Vaccines, blood pressure monitoring, diabetes testing, cancer screening, health education, weight control, nutrition and exercise, stop smoking campaigns, and perinatal care will become essential programs for maintaining health and wellness, and for reducing healthcare costs in the long run. Under universal healthcare the focus will shift from disease care to wellness care.

We need a fundamental shift in priorities for healthcare.  Under our current system, approximately 75% of a person’s health care expense comes in the final year of life.  Instead of paying for heroic measures to extend life of the critically ill, we need to shift our resources and our focus towards maintaining health and wellness for all.  In the most extreme cases, our heroic measures do not extend life, but only prolong death at a horrific cost.  Those are healthcare dollars that could better be invested elsewhere.

Healthcare rationing will be required under any conceivable healthcare system.  The old indemnity insurance system failed because plan members could demand essentially unlimited medical coverage.  If the first doctor refused to do a requested procedure, the patient could seek out ten additional doctors, and undergo ten more sets of tests.  Eventually, a doctor would agree to do the procedure, even if it had limited or no justifiable medical value.  And the result was that the insurance company was expected to pay the full cost of the search for treatment as well as the actual treatment.

It is not financially possible to perform all of the medical procedures that we know how to do.  Nor is that always the wisest course of action.  The cost of heroic medical care is paid not only in scarce healthcare dollars, but in pain, incapacity and suffering of the patient as well.  The cost of intensive care is approximately $3,000 per day.

If the patient in such circumstances has a chance of recovery, then the expense as well as the pain and suffering may well be worth it.  But if the patient has no chance of recovery, then what is gained by the expense, pain and suffering? And in gauging the capacity for recovery we must use sober reasoning and not wishful thinking.

But we must also look at the negative quality of life for the patient.  If a patient has no chance of recovery, how long should they be maintained by such heroic means?  And furthermore, what is the quality of life for that patient?  This situation demonstrates the difference between extending life and merely delaying clinical death.  The irony is that under such extreme circumstances we treat our pets more humanely than we treat our parents.

Before making any major medical decisions we must also consider other factors such as the patient’s age, health, his or her capacity to endure the procedure, and the potential for improvement in quality of life that the procedure offers.  For example, an eighty-six year old with congestive heart failure ought not to be considered for a liver transplant.