There is a big argument going on at the moment about whether the Federal Government is going to replace the current law on health insurance with something else. It is some high theater right now and whether Congress can come up with the votes to pass a new program (or what that program might look like) is way up in the air.
But you can read all about the legislative horse race in a zillion other forums. My purpose here is to present a report from out here in the hinterlands about how the insurance situation has gone from bad to worse.
I have worked in small offices for pretty much my entire 30+ year career. When I was a young attorney in the mid 1980s, I realized that my office did not pay health insurance, so I would have to buy my own. I was a healthy 28 year old guy and knew nothing about the topic. So, I called an insurance agent and bought an individual health insurance policy. I still remember the cost of the premium: $67. Per calendar quarter. Worse, I remember griping every third month – “Oh no, here’s that miserable health insurance bill again.”
I later joined a group plan administered by my state’s Bar Association. Premiums were rising (I was getting older, had gotten married and was starting a family) and my health insurance soon passed my monthly car payment (which had been somewhere north of $300, as I remember it.) And then came the shocker – The notice that explained that there had been too many large claims and that there was a new plan, but one that would not cover pre-existing conditions for a year. To stay on the old plan? The premium had crossed the magic $1,000 per month threshold. A threshold I was forced to step across because my family had already received approval for a significant surgery which would be a pre-existing condition under the new plan. I sucked it up, for several months, though I’m not sure how.
Later small group plans through my office were the solution, although again the rates kept going up and up. The demographics were bad as most of us were either getting older or had some bad health history. And an individual policy was a no-go because the pre-existing conditions of some family members would not be covered for a period of time. By the mid 2000s my premiums went north of $1,000 per month again. Until that final year when they hit over $2,000 per month. For a high-deductible plan mated to a Health Savings Account. Every year I wondered how I could afford it and every year I somehow managed, though not always very elegantly.
It was in this environment that “Obamacare” became the law of the land. As a Red State conservative, I was a little irked by this new entitlement, figuring that it would not be sustainable or good for healthcare in general. But as a guy in small business with some difficult to insure family members who was about to get priced out of the insurance market, it turned out to be a Godsend and my monthly premium went down for the first time in years.
The problem has been that the situation has deteriorated each year. In year 1 the choices were good and the cost was reasonable. But then I had a claim. A family member needed a replacement for an implanted medical device. There was one source for it. I figured that after my deductible the insurer would pay the rest. The insurer figured it differently. It estimated what the device would really cost if it were available from multiple sources and if it were granted a discount. In other words, I present a claim for $X and they assume that the actual cost is 50% of $X, leaving me with the balance which, after my deductible, wound up covering more like 20% of $X . As an insurance lawyer, I knew that I could eventually take them on and win, but took the easier route and switched companies for year 2.
Company 2 paid the claim as it should have been paid and all was well. I was happy and stayed with them for Year 3, despite the premium increase. But at the end of Year 3 they announced that they were pulling out of the market because they could not make money.
Year 4 (this year) found us with our third insurer in 4 years, requiring yet another panicked adjustment of “network providers”. Some of our old ones we could keep, others we could not. And it cost more money, of course.
We just received notice that Company 3 is also dropping out next year (as is the company from Year 1). So each year the price goes up while the number (and quality) of insurers goes down. It looks like I might be down to either one or two companies to choose from next year if things stay as they are, including one with the most awful online insurer reviews I have ever seen. From what I have read, I may be one of the lucky ones.
The arguments going on in Washington are being followed by me with some interest. But what is the choice? It is not whether we keep the current law as it was configured four or five years ago but whether we keep the situation that we have now and will have next year. Those two things are very much not the same thing.
If it passes, will “Trumpcare” be better than or worse than “Obamacare”? In truth, nobody has the slightest idea. Some will win, some will lose, and we don’t know who is in which group.
What is the answer? I have no idea. I do know some things, however. We have no “crisis” in any other kind of insurance. Car insurance, homeowners insurance, dental insurance, name it. I know that the markets for health insurance and healthcare have been screwed up for decades.
As more and more people got insurance through their jobs and paid for every basic bit of treatment that way, health providers jacked up their prices so that they could give “discounts” to the insurers which demanded them. And as government programs sliced reimbursement rates, medical providers just shifted those costs over to those of us in private insurance. There is no functioning market for health care right now unless you are willing to make it a full time job researching and pre-negotiating cash prices for your treatment. And if you do not you will be sued by a big hospital company for the full list price of your treatment, an amount which no insurer has ever been charged.
Is government-run care the answer? I have heard enough stories about the Veterans Administration and Bureau of Indian Affairs systems to make me leery of this approach. Medicare reimbursement rates are so low that it is getting hard to find doctors who will take new Medicare patients. England’s National Health Service? I have no firsthand knowledge but have heard some not very nice things. The Canadian system gets a lot of praise these days, but I do not know much about it and those doing most of the praising are telling me how great we have it with Obamacare now. These are usually the same folks who are either young and healthy, have health insurance through their employer, or both. So I simply don’t know.
I do know that we are being offered an ever-increasing menu of increasingly complex and expensive health care options that are becoming harder and harder for normal people to afford. The days of paying your doctor with a chicken or two are long gone – unless your name is Tyson. And does anyone really want to go back to 1950’s medicine when such a thing was possible?
What about free healthcare paid by government? My background in economics tells me that there is no such thing as “free” – demand will become almost infinite, meaning that some rationing device will become necessary in order to keep the costs from swamping the system. And as with the case of Baby Gard in England, that rationing is not always pretty. But don’t expect the Medical-Insurer-Government Complex to lose on whatever the eventual deal is.
What I know firsthand is that things are bad. And they are definitely going to get worse if nothing is done. Under the versions of Trumpcare that are under consideration? Perhaps a different kind of worse. Or better. And nobody knows. Which is the only conclusion that we can really be sure of right now.