I just got notice a little over a week ago that my health care premiums were going up by roughly 69%.
Consider for a moment what the reaction would be here in America if, say, the price of gas shot up—suddenly, or even over the course of one or two years, by 69%. Let's say, so as to not sound absurd, that it only shot up by half that. What do suppose the reaction would be? Would Ben Bernanke not only be getting jeered, but also getting pelted with eggs, even rocks?
I took out our current medical policy back in September of 2004, several months after my wife had to quit her job at a local hospital due a difficult pregnancy with our second son, who was born, just fine, in April of that year. We carried out the $100 deductible health coverage she had through her job via COBRA, at what then, a mere seven years ago, seemed like the exorbitant cost of $1200.+/month, until the maternity bills had come through and were settled, and then transitioned to a private plan, which, then, for a family of six, with a $6500 family deductible, 100% paid thereafter, cost us $364/month.
Again, keep in mind, we're talking not quite seven years ago; interest rates since then, for more years than not, have been at or near zero, with "core" inflation, according to some of the best and the brightest, being low enough to justify such monetary policy. Recent spikes in food and energy costs, according to our Fed Chairman, are "transitory," and have nothing to do with computer-generated dollars flooding into our global system of finance, to ostensibly keep our economy from sinking further into the mire, given that wages are stagnant, that unemployment remains high, that none of us can pull easy money out of banks or the equity in our houses anymore unless we really don't need it that bad to begin with, and well, even if your dollar is worth less and less due to computer-generated dollars and other currencies proliferating around the globe, if you don't have many to begin with, you can't hardly drive up consumer prices, and so, Ben Bernanke may very well be right, for now ... and we should all be a little more like Alfred E. Neuman of Mad Magazine (is there still a Mad Magazine? If not, there should be) and not worry.
Except, possibly, with regard to health care ... and those who have been trusted to see to our needs in that regard; namely, the health insurers ...
(NB: this assumes that you are not over 65, and thus have Medicare, and, since George W. Bush, cheap access to all kinds of drugs subsidized by the American Taxpayer who can't, by law, negotiate with the makers of those drugs to get a lower price, a law primarily driven through by our supposedly conservative lawmakers at the time, many of whom are currently champing at the bit over runaway government, but don't get me started; also, this assumes you are not a veteran of some sort, ranging from one who simply goes and plays cards on weekends somewhere once in a while, to one who has seen action, possibly a lot of it, whose body and family, in some cases, have been torn and ripped and battered by what our government, often in ill-considered adventures begun by those who have never seen action, has asked of you ... the whole range of you have the VA, or Tri-Care, good, decent health-care paid for by taxes, looking out for you; and ... if you are poor, if have no money at all, and lack abilities and resourcefulness, or are old and broke and in a nursing home that takes Medicaid, you have Medicaid looking out for you.)
But soon, those of us who aren't covered by one of the tax-payer funded programs in this country (listed haphazardly, and editorialized upon, above) are going to HAVE TO BUY health insurance, because that's the best deal Obama could cut—and I believe him—with the people who gave us Free Un-negotiated Pills for Old People, and who would otherwise hand the whole system over to the kinds of folks who just told me my premiums are going up by 69% ...
And so I asked these people, at my insurance company, just out of curiosity (since it wasn't going to matter, since I can't afford to go without health insurance unless I want to take a chance at getting bankrupted by the high cost of health care), to please account for me, why, otherwise, given that costs in the developed world are so under control and in some cases even falling unless of course you count food and energy and apparently the price of insuring your health care, why ... so ... much?
And I found out, among other nonsense, amid obfuscation of this and that, that now, in the state of Colorado, insurers have to cover you for maternity benefits. Which sounds great, right? Except, what if you don't need maternity benefits? Too bad, it's the law now. Gotta have um.
Now, from a business standpoint, as I have pointed out in previous blogs (see the surreal: "What We Talk About When We Talk About Health Care," from August of 2009), and to those who have otherwise made the mistake of getting me started on the subject, it makes no sense at all for an insurer to provide "affordable" maternity coverage (or to insure a person they already know is sick, or soon to be, for that matter), since, unless you have trouble getting pregnant—as in, years and years of trouble—the insurer has as little as nine to ten months, if not less, to recover the considerable expense of having a baby in the United States—which, for the sake of accurate and easy analogy, is roughly equivalent in cost to insuring someone's funeral, provided you knew the insured had only nine months to live. There is a chance, of course—stay with me!—that he could outlive the doctors predictions, but more often than not, he won't, and may in fact die sooner, and so the insurance company, meantime, not being nitwits, being a FOR-PROFIT ENTITY answerable to shareholders who expect to make money, not lose it, needs to take every care possible, should they want to keep their salaries and tall buildings in every city, to see that they, the company, make money, not lose money, on this individual whom they are insuring before he or she dies and they have to pay for the funeral, which, as noted, costs practically as much as having a baby!
So, even though neither my wife nor I can have children anymore, and the others on our policy are males also unable to have children and incur such expense, one of the reasons cited for my premiums going up by 69% is that I now have to have maternity coverage, because the State of Colorado mandates it—a type of coverage that, back in the day, was very expensive, for obvious reasons (see above), and that you only made out on, cost-wise, if you got pregnant within 30 days of taking out your policy (not likely, unless you're fifteen), and that, therefore, you had to be an idiot to take out, and thus you only had it—maternity coverage—if you were poor and covered by Medicaid, or if you had an employer who, out of the kindness of his or her heart, and at some expense, provided such a plan for you. Which you likely took for granted ...
However, turns out a lot of women who didn't have such coverage, nor any money to speak of, still got pregnant and wanted to have their babies in a hospital, as opposed to a bathtub, or even their own comfortable room, where the resources and skills and equipment available would cost them a lot less, but might not be so good. And—surprise!—even though these women didn't have any money, or tax-payer funded program, or insurance provided by a generous big-hearted employer, the hospitals still said it was cool if they wanted to have their babies in the hospital, with their doctors and nurses and high-priced equipment and drugs. They'd sort out all the money bullshit later.
In fact we had our first-born "out-of-pocket" as they say here in the United States, if in no other first world nation, and at the time it cost somewhere between seven and ten thousand dollars—about what it cost to get decently buried in the ground. Knowing how the game is played better than most, I negotiated 40% off the top of the hospital bill with a phone call, then put the rest on my American Express—got some miles, for my next trip out of town. That's how I used to roll back when. Let's Make A Deal! And they were happy, at that hospital, trust me, to hear from me, to play ball on my terms and not have to go to the time and expense of bankrupting me, offing me to collections, paying those people 30-40% so they could then—maybe—get $25 a month in return, if not garnish some wages that I didn't have after a lengthy court battle.
You'd think there'd be easier ways. And there are. And most other developed nations have them, but not us.
But never mind.
Or rather, see who makes out in the end, and you'll understand, kind of:
Imagine the negotiation toward getting maternity coverage mandated. The odd bed-fellows, if you will. Consider who, without question, makes out better as a result. Is it the insured? Doesn't seem like it. As I pointed out, my premiums just went up 69%, much of it due, specifically, I was told, to this change of law. Which sounds like such a nice law, yet ... who gets stuck for the cost the insurers are going to have to shell out to the hospitals, and providers, who will now get paid, every time, and not have to be cutting deals, and otherwise writing off expenses on the maternity front? Not the hospitals, not the providers ...
Consider that this is, perhaps, a microcosm of how health care expenses in this country have been pushed up, and up, well beyond any measure of inflation, over the years.
Yet while we all think it is madness—the expense, the rising costs—to cut costs means that someone, somewhere, is going to make less money. Which sucks, right? Especially when we consumers can barely do our part right now to keep things fat and happy, especially for those making multi-million dollar salaries, and those in the know investing computer-generated "hot" dollars in money-making schemes around the world.
Anyway, as I was saying, our family started off in September of 2004 paying $364/month for $6500 family deductible private health insurance. A few weeks later, Ian, our older son, was diagnosed with leukemia. Had I waited another month to transition our policy from COBRA, or had he gotten diagnosed a month earlier, we'd have been bankrupted before Children's Hospital, once we were indigent, would have picked up the tab for his care. Or, since my wife is a Canadian citizen, we could have moved to Canada, which we would have, had push come to shove, and never seen a bill—though our taxes would have been somewhat higher, and we wouldn't have gotten a deduction for our mortgage interest, none of that; we just wouldn't have been bankrupted by our two-year-old son's getting cancer, and the hospital, everyone, would have gotten paid, though not quite as much as down here. And he would have gotten the same treatment. He'd have been fine either there or here, his parents would just be less broke up there. I know people in Canada who have had cancer and, trust me, they don't wish they'd have gotten it down here. A hip replacement, maybe, but not cancer.
Nonetheless, you could argue, were you the insurer, that I got a pretty good deal: our son, based on advertised, pre-discounted prices, got somewhere between $300-$500 thousand dollars in care over three years, while I only paid between $15-$18 thousand a year in premiums and deductibles. Of course, that doesn't take into account the time I spent going over EOBs (the insurance company's "explanation of benefits"), to check for mistakes (there weren't many, but the ones that there were took many hours to correct), to check which expenses, from which providers, I would have to pay, and which the insurer would cover, to then negotiate those prices, that down here, if someone in your family has cancer, then someone in that family has a part-time job. Unlike in Canada, for instance, or pretty much any other first world nation. You worry about your loved one, not about going broke. Some might argue that constantly worrying about money, even if your son is ill with cancer, keeps us on our toes; but if we were complete bums, penniless and screwed, it would all be paid for. So that doesn't really hold water.
Keep in mind, furthermore, and back to my example, that it is against the law to boost an insured's premiums based on their health history after they take out their policy, and so my insurance company—which is as good as any (and I really love my agent, and her fine staff, and that's the truth)—cannot jack my rates to offset the expenses of my son's treatment for leukemia, nor can they jack my rates because one of my big boys, Joe, plays hockey and is in the emergency room more often than Lindsay Lohan is in rehab—and Donna and I (even at my age) are both considered "premium" specimens to insure, yet—
Since September of 2004, my health coverage for six has gone from $364/month for a $6500 family deductible to, 18 months ago, $661/month for a $10,000 deductible ... to, recently, $1118/month for a $10,000 deductible ... and if you are paying substantially less than this for the same sized family, you probably have substandard coverage, which you'll regret should someone you're covering get sick, or into a bad accident. Better to go without, while you can, than to go cheap, since either way, when you need it most, you won't have it, though in the former case you'll have the consolation of knowing you didn't feather any nefarious nests with premiums.
So, not being part of any group covered by socialized medicine in this country, and in order to be adequately insured against a medical catastrophe so that, should it come, we aren't bankrupted, we are potentially on the hook for $23 thousand dollars a year—and that doesn't include dental, vision, any of that.
And here's something else you'll get a kick out of. In response to notification of my rate increase, I re-applied for health insurance (through the same company: it was suggested that sometimes, if you've had a policy for a while, you might be better off re-applying, and capturing a new "risk pool," that your rates sometimes, though not always, went down, sometimes a lot; now this made no sense to me at all, since around me my pool looked about the same to a little worse, but what the hell, I took more time from my day and did what they suggested), and found that re-applying, for us, wasn't going to help us much, since Ian had had leukemia ...
What? you say. Doesn't the new health care law eliminate such discrimination against pre-existing conditions? Hasn't that aspect of the law, for those under 19 years age, already kicked in? Yes, it has, but ... while the insurance companies have to take these young people with their pre-existing conditions, they are allowed to "up-charge" them. They'll take your previously ill child, but they'll charge you more, which only makes sense if you're dealing with a company whose job is not primarily to care for you and your family but rather to make a profit for its shareholders, but even so, it's a little different from what we all thought we were getting ... out of that big production that led to our current health care law. And it wasn't because Obama decided, on his own, that the insurance companies ought to be able to "up-charge"—remember that term, you'll likely hear it more—their new customers who have pre-existing conditions. No, I don't think so. Though some people probably do, and will.
So, back to the money ... how many people, do you suppose, once it becomes law to pay the insurance companies to pay for their health care, will be able to afford to do it? How many do you think will actually bother? How many companies are going to be able to foot that kind of a bill for their employees without putting their profits at great risk? How many of you (who aren't covered by our various tax-payer funded plans, and are thus relatively happy, probably, even though, ironically, you're some poor son of a bitch having to get by with socialized medicine, which we all know is just awful, like everything having to do with the government) are already paying A LOT more money for health insurance, whether through contributing dollars at work or privately? How many of you have seen these costs go up for you a lot more, as a percentage, than the price for gasoline?
So, we aren't talking free enterprise versus communism here. And even some libertarians I know would argue, or at least agree, that if everyone, as a de facto measure of our civilization and humanity, deserves (or will, one way or another, get) a certain measure of care in the event they become hurt or sick, then would it not be simpler, more efficient, more practical and less savage, to spread the cost across the population, to negotiate with the providers as a population of tax payers (as they do in Canada, with considerable success, despite having less than a tenth of our population), so that everyone can have, as it were, a decent funeral, so the undertaker can get paid and not have to hire an employee dedicated solely to cutting deals with families who can't afford a decent funeral? And then, if you want a fancy funeral—lots of flowers, an oak casket, a nice choir and maybe even an orchestra to send you out—then you get insurance. Let the underwriters do some math and see what they charge. For a fancy funeral. And if you can afford the fancy—either with your own money or the insurance company's—buy the fancy if you want; but if not, because we've all decided that the dead need to be buried, just like the sick need to be attended to, as part of our Christian heritage, our secular or ecumenically humanistic decency, then you'll still get buried. It won't be a fiasco.
That could happen here, don't you think ... if we cared about health care money like we care about the price of gas?
