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The big healthcare scam.

November 13, 2018

During the recent election, voters said the cost of healthcare was either their top or second most important consideration, and Democrats actually ran on it as a campaign issue.

But do people mean the cost of the care, or the cost of the insurance?  It could be either or both.

Several states opted for broadening Medicaid coverage for people who are working, but still can’t afford insurance premiums or they can’t see any reason to buy it when the deductibles and co-pays are often more than a half years pay.

In fact for many people, by the time they pay the non-covered portion of the doctors fees, they may never have a claim paid by Obamacare. To that extent, it is little more than catastrophic insurance.

Here is a 2017 quote from cnbc.com that describes the then-current annual cost of health spending per family.

“According to eHealthInsurance, for unsubsidized customers in 2016, “premiums for individual coverage averaged $321 per month while premiums for family plans averaged $833 per month. The average annual deductible for individual plans was $4,358 and the average deductible for family plans was $7,983.”

That means that, last year, the average family paid $9,996 for coverage alone, and, if they met their deductible, a total of just under $18,000.Meanwhile, an average individual spent $3,852 on coverage and, if she spent another $4,358 to meet her deductible, a total of $8,210.”

Note that the costs described are not for CARE, but for insurance premiums. In other words, you will pay out this amount even if you do not receive a single minute of actual care.

Believe it or not, it is very difficult to find amounts for actual routine care. Most averages include all health care, including catastrophic event care, cancer treatment, emergency injury care etc.

We spoke with a few people with families of four who have opted for cash-based concierge care with family physicians.  Most of them pay about $1000 a year to belong to the practice, and their total annual cost for care such as annual physicals, immunizations, minor injuries such as sprains or minor burns averaged another $2200 annually. That’s a fraction of the costs listed above.

For all of its hype, the ACA, i.e. Obamacare, didn’t cover everyone. It is popular now mostly because it’s perceived to be the only game in town for those not covered by employer insurance or Medicaid.

Since Congress, particularly Republicans, didn’t and don’t  have any viable alternative, people are obviously afraid to lose even the scant benefits they get from the federalized policies.

Although politicians won’t admit it, most people are very little if any better off with ACA coverage than they were under the “old” free market system.

Of course when you go beyond routine care, then insurance becomes not just useful but mandatory.

For instance, “Jim” had two vertebrae in his back “stabilized”  (not fused, but mechanically stabilized) last year. The total cost for everything, i.e. surgery, anesthesia, hospitalization, diagnostic and post-surgical care including physical therapy was just under $71,000. His employer-subsidized insurance paid all but $6,800 of the total.

The argument FOR insurance is that even if you only have one expensive episode of care in a lifetime, the premiums you have paid over three, five or even ten years average out over the charges so that your insurance company has the money to pay the claims.

OK so much for the insurance side of the equation. What about the actual care?

Going back to “Jim” again, he says he had a hard time getting fully itemized bills, but he does know that the hospital charged a total for the room of $9127 for three days. His surgeon charged just under $30,000 including all aftercare exams, and the anesthesiologist charged another $6500. Physical therapy was $327 an hour. Then there were radiology charges, pain medications,  “surgical suite charges” and other items that were lumped under “supplies.”  He still isn’t sure what some of the remaining hospital and radiology charges covered.

Number one, if a provider can’t tell you exactly what you are paying for and why, that’s a problem.

Second, this sounds like an awful lot for a surgery that took just over two hours to install what amounted to two staples. Granted, spinal surgery requires a highly skilled surgeon, but does price equal quality?

The whole aim  of insurance is to keep people from having to choose between their health and going bankrupt, and too many times we aren’t hitting that target.

Some providers say that they bill high because if they don’t they won’t be paid enough to stay in business. Some years ago, a retired provider admitted that they bill high simply because they can.

We need to find out why the cost of care is so high in the United States.

Perhaps the Democrats could squeeze that task in between their 85 Trump-targeted subpoena cannon shots  before they try to sell us on Medicare for all.

From → op-ed

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