FORGOTTEN FACTS ABOUT HEALTHCARE
1) Healthcare is not like other forms of insurance. You cannot buy it by the slice. Everyone needs full coverage because no one knows what might happen.
2) Healthcare can be immensely expensive. Any health care issue can potentially cost one hundred thousand or even one million dollars.
3) Any form of “medical savings plans” is simply a cruel joke. For people living paycheck-to-paycheck any form of savings is impossible. A more affluent middle class family may be able to save five thousand dollars over five years in their medical savings plan. When and if they are hit by a medical crisis such as a heart attack, traffic accident, or severe disease, their five thousand dollars in savings may not cover even the first day of treatment.
4) There has to be enough money paid in to the health care system to pay all claims. A sixty-year-old woman may say that she does not need pregnancy coverage. If that is allowed, then a twenty-year-old woman may say that she does not need coverage for “old people’s” issues such as osteoporosis or Alzheimer’s. Any medical care system must find a way to pay for all medical needs for all people. Healthcare is not just about my medical needs, but how to cover the medical needs of the whole population.
5) Any health care plan will require government subsidies. The only alternative is to let the poor and vulnerable people die. People in nursing homes are there for a reason, and cannot be expected to get a job and support themselves.
6) Even the healthiest people need insurance. You may be a marathon runner but this does not mean that you won’t get hit by a bus or develop a brain tumor.
7) The cost of healthcare is not only the cost of the medical premiums, but also includes the deductibles and copays. A “cheap” insurance policy with low premiums is nearly worthless if it has high out-of-pocket costs. Many who complained about the Affordable Care Act went from cheap, nearly worthless policies, to full coverage. That is also a part of the reason that costs increased.
8) Coverage of pre-existing conditions is essential. With anyone over age 50 you would expect numerous pre-existing conditions. Under recent plans announced by the Republican Congress, some people with pre-existing conditions would be paying in excess of $100,000 in health insurance premiums alone, before counting the costs of deductibles and copays. This is not insurance coverage but a death sentence.
9) We need wellness care instead of sick care. Wellness care involves vaccines, early diagnosis, and rapid intervention. Health care plans should focus on preventive care as a long-term investment. Preventive care should be done with out-of-pocket expense to the patients. Even better is to make preventative care free. For example, my Kaiser Permanente provider requested that I have a colonoscopy simply because of my age. This procedure was done without any out-of-pocket cost to me. During this procedure polyps were found and removed, preventing potential colon cancer.
10) Healthcare should be seen as an investment in our human capital. A strong and healthy population yields productive workers and tax payers. Prevention is infinitely cheaper than emergency intervention and rehabilitation.
11) The health care system in most developed countries try to reduce overall healthcare costs by such mechanisms as volume discounts in purchasing. This country has gone to the opposite extreme. When Medicare Part D was pass for prescription coverage, Big Pharma was guaranteed that the government would pay top dollar for every purchase. The purpose was not to provide affordable health care to all Americans on Medicare. Rather, it was done to create a massive subsidy to Big Pharma at the expense of those in need.
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.