The blame game. Why read on? Because consumers need to advocate for themselves in this healthcare crisis. Why? Because we might have done something long before now if we had and our healthcare system determines not only our quality of life but our longevity…the healthcare SYSTEM (not health insurance, a product that SHOULD help people avoid financial decimation if they need medical care and treatment.)
Life Expectancy: On May 30, 2012 in the post, “Are you better off than four years ago?” (http://conoutofconsumer.blogspot.com/2012/05/are-you-better-off-than-four-years-ago.html) you’ll see that I was frustrated regarding the worsening of the US ranking in terms of life expectancy.
In 2007 the US was ranked 42nd in life expectancy (look it up at http://www.cnn.com/2007/HEALTH/08/13/life.expectancy.ap/index.html).
Today we are at 51, we’ve lost nine slots (look it up at https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html) This is POST-PPACA, Obamacare.
There is enough blame to go around, but that doesn’t help us. Instead, tune out the noise and consider solutions being put forth for the problems being highlighted in order to better guide the continued discussions our country is having for healthcare reform.
For instance, all over the news this week talking heads are discussing high deductibles. Yeah, we knew this was coming yet it took YEARS to come into the news, long after any reasonable time for doing anything to reverse the trend before it took a foothold.
On May 1, 2008, I discussed the HSA and its perils in my post, “High Deductible Health Insurance: Evolution of a Scam?” (http://conoutofconsumer.blogspot.com/2008/05/high-deductible-health-insurance.html) (copy and paste address in browser to read or search blog.)
Too late to go back, but moving forward, it’s important to understand the problem before addressing a quick fix. Insufficient insurance, thin coverage, underinsured are all ways of saying that IF you need your insurance PRODUCT to help you pay for needed medical care and treatment and it does NOT, either by leaving you financially destitute, by making your best options inaccessible, or be delaying your ability to obtain that needed medical care or treatment, then the INSURANCE PRODUCT fails.
We don’t care WHY in this instance, just that we paid premiums for something that did not cover the CONTINGENCY, the “What if?” that occurred in our lives. It’s like buying homeowner’s insurance that doesn’t cover a loss, or buying car insurance that doesn’t cover a loss, ALL the money paid in premiums is WASTED if it’s not there when you need it.
Why don’t we care about WHY IT FAILED? As consumers if we buy something we want it to work. Let the doctors and insurers and politicians fight it out BUT if a product is sold that leaves us hanging when we need it that product is not good.
This is NOT rocket science, but it’s being treated as if it is because we’re being included in the bickering among other stakeholders. This might be interesting or entertaining BUT it is not useful to consumers.
Catastrophic plans, HSAs have been around for at least awhile, BUT they are a great way to highlight the major problem with Obamacare and that is that it DID NOT change the most perilous trends in our healthcare system that threaten the ability of citizens to obtain needed health care and treatment, but instead it CODIFIED them into law.
That is a problem. A law described as “Reform” merely gathered all the worst practices together and standardized them into a national policy.
But that doesn’t mean that repealing Obamacare is “THE ANSWER.” That would be treating Obamacare as a reform and it is no more a reform than it is a Patient PROTECTION and AFFORDABLE Care Act. The problems existed before and Obamacare made them worse. So, the focus on change should be how did it make them worse?
Deconstruct HSAs. They consist of high deductibles, higher payments for medical care and services in the form of a greater percentage of what you pay for medical care and treatment which means that the money you put into your HSA will be spent more quickly than money you put aside for medical expenses if you saved money yourself.
For instance, under the “new” PPOs which are following the HSA model, money you pay is about 20 or 25 percent of cost of care and HSAs usually are between 30 and 40 percent that you’ll pay.
But here’s where Obamacare earns the blame AND MAKES THINGS WORSE:
1-Essential health benefits and benefits that are required of all plans in terms of preventive check-ups has made INSURANCE COMPANIES look for ways to maximize profits and comply with the law, therefore, HSAs, which must also meet these requirements, have RAISED premiums AND how much you will pay for needed medical care and treatment, anything other than PREVENTIVE.
IF, which is the operative word for insurance products that are supposed to cover contingencies, you need any diagnostic or continuing care rather than preventive care, you’re going to be paying more.
2-By limiting how much an insured is charged in premiums (9.8 percent of income) Obamacare has made INSURANCE COMPANIES look for new ways to maximize profits so that MORE is being charged for dependent coverage, which has NO limitation, AND/OR spouses with other insurance coverage options are banned from participating in their spouse’s health insurance plan (so much for use of the HSA as a supplemental policy).
3-By using HSA standards as the minimum coverage, catastrophic coverage, other insurance plans are imitating the HSA, pushing the envelope towards maximizing the money they keep in premiums by raising their deductibles AND/OR switching to requirements that consumers pay a percentage of cost rather than a co-payment. This is obviously bad for consumers.
4-By requiring that everyone has SOME health insurance in order to avoid a penalty, people are being forced to purchase HSAs if that’s all they can afford leaving them open to financial decimation if they get sick. Since the young are likelier to choose this cheap coverage, they are the ones getting screwed with the push for HSAs.
STILL BUYING THE SALES PITCH? Consider who really does OK with an HSA:
1-People who would be fine with or without health insurance because they enjoy good health and therefore don’t need an insurance product to help them pay for needed medical care and treatment.
People argue that HSAs are a marvel, allowing them to have health insurance that they could not afford otherwise. To anyone who says that you can respond, “Congratulations on your good health,” because we KNOW that if you’re sick, HSAs, basically catastrophic health insurance coverage, are insufficient.
2- People who are rich and need another tax shelter in addition to an IRA OR people who would have been fine anyway because they have not needed medical care and treatment.
People argue that they can save money tax free for future medical expenses. Again, you can respond, “Congratulations on your good health,” because you KNOW that approximately $7,000 goes in a second if you’re sick, and therefore there would likely be no year-over-year savings in an HSA.
If people are older and argue that they’ve been saving money up in their HSA and they have a tidy sum you’d have to say, “Congratulations on your good health, but if you knew you weren’t going to be sick for five years why wouldn’t you just put money into your IRA?” If you get the answer, “Because I max out on my IRA contributions,” then you see yet another problem with HSAs, they are a tax shelter for the rich.
3-People who have a spouse with better health insurance through their employers can purchase an HSA for themselves and thereby only use the HSA coverage for amounts not covered by the first insurance.
If a spouse says that he or she loves their HSA, then ask whether they’re covered under their spouse’s insurance. As a supplemental policy, HSAs remain an option.
4-Young people who want to comply with the law but face a terrible employment environment. They’re being pushed into these plans and it’s a shame because if they become sick, they will be in as much trouble as any other sick person who has an HSA.
When it comes to catastrophic coverage, we’re talking about providing people with the bare minimum which means that people will logically avoid using the money they’re “saving,” especially since they’ll pay more if they need other than Obamacare preventive checkups. It is unclear what impact this will have on our formerly 42, currently 51 ranking in longevity when compared worldwide.
A quick fix would be to push the old-time HMO, clinic type of plan where consumers save money on premiums for in-network coverage only rather than the HSA catastrophic coverage. This choice would require that HMOs have enough participating providers to give decent healthcare to their customers in a timely fashion. Family premiums must also be limited.
You may have better ideas, but gauge them against the single most important consumer goal: Access to affordable health services when we’re sick because when you’re well, any insurance will do.
Obamacare did not create the problem of selling people insurance policies that left them financially vulnerable in the event they became ill. BUT Obamacare codified this approach as a “solution” to the healthcare crisis. It’s wrong.
