A few weeks ago, a notice came in the mail from my health insurance carrier. The first line, in large, bold letters, informed, "Rates are going up but you do have choices."
Be still, my heart.
I've had group health insurance through my employers for most of my adult life. But last year, when I decided to become self-employed, I dove into the "individual" insurance market. After surviving the initial sticker shock without needing hospitalization, I chose a high-deductible plan, swallowed hard and started paying the premiums. I undergo the monthly wallet-ectomy on an outpatient basis.
News that the premium would be rising had me clenching my teeth, especially when the "choices" offered by my insurer were a list of similarly priced plans offering fewer benefits. And, while assuring me that "telling a valued customer about a premium increase is never easy," the letter blamed it all on California's new requirement that maternity and autism benefits be covered in family and individual insurance coverage. The bottom line was about $10 a month tacked on to my premium, and I figured I'd got off easily.
But I'd also forgotten I was dealing with an insurance company.
A few days later, I received another notice with the now-familiar heading, "Rates are going up but you do have choices." This time, my new, higher rate was going higher still because "costs for services provided by hospitals, doctors and drug companies have gone up significantly." So, in addition to that extra $10 a month to cover my maternity needs, my premium would jump by another $38 to cover the costs of those hospitals, doctors and drug companies.
What, you thought the insurance company was getting some of that?
Well, that's what I thought, too. Especially when I read the story from the Los Angeles Times that ran Monday in the PD about "the cash discount for health care." In case you missed it, the story described "one of the little-known secrets" of our health care system, which is that – sometimes – it's cheaper to pay the bills out of your own pocket than to use your health insurance.
How can that be? Well, to summarize one example used in the Times story, a hospital in Long Beach charged Jo Ann Snyder $6,707 for a CT scan. Her insurance company, Blue Shield of California, covered most of that bill, reducing Snyder's out-of-pocket cost to $2,336. However, it turns out that if Snyder had told the hospital she had no insurance and would be paying for the scan herself, the bill would have been just $1,054.
Wow. No wonder my rates are going up.
This is the beauty of the so-called "free market" health care system that is touted by those who oppose President Obama's health care reform plan. Under today's rules, "there's no correlation between what things cost and what is charged," Paul Keckley, a health care financial analyst, told the Times.
Of course, the plan that is derisively known as "Obama-care" doesn't guarantee such correlation in the future. But it would make sure that everyone has insurance, and that would eliminate the excuses that were trotted out by the hospital and insurance industry spokesmen who tried to explain to the Times the different costs for Snyder's CT scan.
The insurance industry says it negotiates the lowest prices possible for its customers, but its customers want access to prominent hospitals, which command higher prices. Hospitals say they need to charge health plans enough to subsidize the cost of treating uninsured patients and patients covered by Medicaid, which reimburses at rock-bottom rates. Meanwhile, the higher costs are passed on to employers and individuals who are buying the insurance policies and paying the deductibles.
And, much like the notices I received from my insurance company, no one mentions the profits that are being made by the hospitals and insurance companies.
It's hard for me to understand how anyone can defend this system of paying for our health care. To those who believe that Obama's plan is "socialism," or that it is unconstitutional in its requirement that everyone have insurance, I have one question: Do you like the way things work today?
Before you answer, read the Times story here: http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527#mod-blogs
Personally, I'd rather see everyone on a single plan such as Medicare than going to the system that Obama managed to get through Congress and now is awaiting a decision by the Supreme Court. But, while it's not perfect, "Obama-care" is moving us in the right direction – away from the system we've got.
Oh, and about my insurance rate increase. The day I received my second notice, I also got an e-mail from the broker who helped me find my individual policy last year. He said I'd probably be hearing about rates going up, but I had some "choices" beyond those offered by my current insurer. Those choices included using a different insurer, with a similar plan for a lower price. I took that option.
Still, I've got to wonder: Who – and what – am I paying for?
Chris Coursey's blog offers a community commentary and forum, from issues of the day to the ingredients of life in Sonoma County.
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