Our Government Knows What to Do. It Just Does Not Do It!
Stanley Feld M.D.,FACP,MACE
Insurance companies are in the business of providing insurance. Insurance is for unforeseen occurrences. It seems pretty sensible to me. However, as the health insurance industry has evolved, coverage is not as straight forward as is should be.
The individual patient buying insurance is not treated as fairly as the group buying insurance coverage. If you have hypertension and work for a large company that provides employee health insurance you are automatically covered in your company’s group health insurance policy. If you hate you job and quit, you would not be able to buy health insurance. The insurance company would deny you insurance coverage because of the hypertension. If you could get insurance hypertension and the complications of hypertension would be excluded from your coverage.
If you as an individual had any preexisting illness, the insurance company would make that illness a cause for denial or exclusion of health insurance coverage for that illness. The preexisting illness is not an exclusion or denial if the person is in an employer group health insurance plan. If you are a young individual with no preexisting illness and a healthy family you could obtain coverage with after tax dollars, while the company group health insurance coverage is pre tax dollars and a deductible expense to the employer.
Some of the exclusions are perverse. They include a history of migraine headaches, gallstones, pelvic inflammatory disease, back pain and back disorders, asthma, allergies, hemorrhoids, varicose veins and even sinusitis.
The reasons for outright denials of individuals seeking health insurance are even more perverse. The illnesses include ulcerative colitis, cirrhosis of the liver, diabetes mellitus, schizophrenia, coronary artery disease, epilepsy, and even obesity. Diseases with the chance for immediate emergency such as AIDS, uncontrolled hypertension, previous stroke and leukemia to name a few, are automatic policy with no questions asked. It is paid for by the employer with pre tax dollars and denials.
All of the illnesses above receive coverage in an employer group is a deductible expense.
If anyone in a family got any one of these diseases there would be no option for the employee to leave his job and become self-employed for fear of not being able to obtain medical insurance. This data is available at the U.S. Office of Technology Assessment. The person with the group insurance from an employer is imprisoned. He can not change jobs.
Insurance companies are in business to make money. They do everything in their power not to lose money by avoiding risk if they can. The government has not closed this loop hole in favor of the insurance industry.
Grace-Marie Turner of the Galen Institute ( an innovative research organization focusing on health and tax policy) found a remarkable op-ed piece written by Dick Armey (R-Texas) and Pete Stark(D-California) in the Washington Post in 1999. Pete Stark is the incoming chairman of the House Ways and Means Health Subcommittee. Dick Armey was house Majority Leader at that time. The title of the article was “The ultimate congressional odd coupe weighs in.”
The two seldom agreed on anything. However the agreed that “Congress should act now to help the 43 million Americans who have no health insurance”. Remember folks the date of the article was June 1999. It seems congress is a little slow. We are have 46.7 million people uninsured.
“For individuals, being uninsured is a problem because too often it means health care forgone, small warning signs ignored and minor illnesses allowed to become costly crises. It’s a problem for families because unpaid medical bills are a leading cause of personal bankruptcy. And it’s a problem for the nation because uncompensated care is an unfair burden on doctors, hospitals and taxpayers.”
“Indeed, today’s tax code discriminates against not only insurance purchased outside the workplace but also lower-paid, part-time and small-business workers. The highly paid CEO gets a more lavish health-care tax break than the waitress earning the minimum wage.”
“Properly designed, such a tax credit could bring about near-universal coverage without new mandates or bureaucracy. It would eliminate barriers the uninsured face in today’s system, enabling them to shop for basic coverage that suits their individual needs and is portable from job to job.”
To be successful, the credit would need to be sufficiently generous to buy a decent policy; available to those who owe no tax liability; and, to prevent fraud, paid directly to insurers or other entities, not to individuals.”
You notice there is no mention of the need for price transparency and a way to set up competitition between insurance companies to decrease the premium charges.
“ We do want to permit a gradual transition to a world in which individuals are free to obtain the kind of insurance they want, regardless of where it’s purchased.”
Admittedly, a tax credit can’t help people who are too sick to insure at any price. Although we differ, fairly strongly, about the best way to help such people, we agree a reasonable way can be found to do so, and we’ll keep looking for it. (Rep. Stark would prefer to get insurers to take all customers at a common price, regardless of health status. Rep. Armey would set up “high-risk pools” to subsidize sick people’s coverage in the 22 states that haven’t already done so.)”
Pete Stark is right on the money here although I hardly ever agree with him. The common price, regardless of health status is what group policy holders enjoy and this common price should be a community rated price. Community rated price is the average usage a particular community has and a calculation of the price of insurance on the basis of that community usage in a price transparent environment based on cost of the provider and not charges.
Dick Armey is wrong! High risk pools have not worked. The insurance industry has managed to price the cost of insurance in high risk pools out of the reach of those who need it.
“Too often, when Congress turns to health issues, it ends up applying legislative Band-Aids. It’s time to address underlying causes. The biggest health problem facing the country is the uninsured. The tax code can be used to help them. We urge a bipartisan consensus to do so.”
Even when they know what to do they do not do it. It is up to us to demand that it be done. Congress has not done anything since these two leaders said it must be done in 1999. June,1999 was six and one half years ago. Who do you think blocked it? The facilitator stakeholders block it because their vested interest was threatened. It is our turn.