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The Insured Are Feeling The Strain of Health Costs : Part 1

Stanley Feld M.D.,FACP,MACE

The United States economy is slowing down. Many employers provide healthcare coverage to their employees. As healthcare premiums rise employers are providing less coverage than previously in order to reduce their costs for providing the healthcare coverage. Employees are beginning to realize their healthcare insurance is not very inclusive and their out of pocket costs are high. In fact, many the out of pocket expenses are unaffordable. The result is a tendency to not seek necessary medical care. The avoidance of medical care leads to more serious and costly illness.

I have warned my readers about this problem earlier. I have received comments such as “The cost of healthcare does not concern me. I have a very good healthcare insurance policy through my employer. The inability to obtain healthcare insurance is the other guys’ problem and not mine.”

The other guys’ problem eventually becomes your problem either through higher taxes or other burdens on society. Individuals with healthcare insurance can not assume they have adequate coverage. The inadequate healthcare coverage is discovered when they become ill.

A basic economic fact is consumer spending defines the market place. Consumer spending also defines the economic well being of our society. An informed consumer can make or break a business. In Dallas, the new concept restaurant capital of the world, we see this market phenomenon daily. This week’s hot restaurant is next week’s dud because the consumer does not show up.

The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.”

Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be — often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.
Our presidential candidates provide sound bite babble in the “so called” healthcare debate. The “debate” has nothing to do with the solution to our healthcare problems. Some politicians claim people are too dumb to take care of themselves. They claim the government needs to provide single party payer system for citizens healthcare needs.

The government is having a difficult time providing insurance for our senior citizens through Medicare. In fact Medicare is scheduled to be bankrupt before 2020. I cannot imagine how the government will insure the entire population.

The government should be figuring out rules that level the playing field for all stakeholders. All the stakeholders vest interests must be aligned. The basic principle should be the patient is first.

REED ABELSON and MILT FREUDENHEIM of the New York Times listed examples of the increased burden to consumers as healthcare premiums increase. The article does not present solutions. It simply confuses the consumer and intensifies the consumer feelings of impotence toward fixing the healthcare system.

Alan Shimel’s blog makes the problem clear from a consumer’s and executive decision maker’s point of view.

“My wife had minor surgery in September. It was ambulatory surgery where she went in the morning and went home that afternoon/evening. Even though we have full PPO coverage and it was participating doctors, hospital, etc. my out-of-pocket costs after insurance were almost $3000! The surgeon received a whopping $472 from the insurance company for the operation and the hospital billed like 17k! When I called the hospital they said they did not expect to get paid that much, but had to bill it so they could get as much as they could. I than had to negotiate what I would pay out of pocket beyond that. I also had to pay the anesthesia, the prescriptions, etc”.

The main issue in the healthcare debate is perfectly described in Alan Shimel’s next paragraph.

Here at StillSecure we had to switch providers again this year because United Health Care wanted another 15 to 20% raise in premiums. In fact that is about normal for health insurance, way above the cost of living and inflation. We pay a good chunk of our employees’ insurance premiums, but even so the 20% or so that we have the employee pick up gets bigger and bigger. Plus the insurance company covers less and less. This squeeze is frankly baffling. How can you pay more and get less.”

The problem is understood easily. The healthcare insurance industry is determining the premium as well as the access to care. The higher the premiums and the greater the restrictions on medical services the higher the healthcare insurance industry’s profit.

In the last few years employers have tried to get out of the business of providing healthcare to employees.
To my amazement, Mr. Nussbaum Director, Group and Healthcare, North America, Watson Wyatt Worldwide and other consultants say it is unlikely that significant numbers of employers will simply drop coverage for their workers.

“The weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits. Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses.”

Mr. Nussbaum dismisses Health Savings Accounts out of hand as a way to force the consumer to pay for their healthcare insurance.

It now becomes clear why many healthcare policy consultants for the healthcare insurance industry have bastardized the original Medical Savings Account and morphed it into the Health Savings Account. It looks like another example of telling the consumer you are providing something good but perhaps in reality providing an advantage to the healthcare insurance industry and the employers but providing something bad for the consumer.

I will discuss this point in greater detail next time.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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