When I was employed by a corporate America, I used to change me health care plan every year to suit my family needs. One year I decided to call the hotline provided by my company for advice on choosing. The nice girl on the other line was very honest and direct, she said no matter which plan you choose, you’ll almost always end up on the loosing side and the health insurance company will make money of you. Your job is to minimize your loss to the best of your ability by doing your best to predict the health of your family for the coming year.
How can anyone really predict that? My first step was to look at my medical expenses including my monthly premium cost for the previous year. Doing some basic math I quickly realized that I could’ve saved few thousand dollars simply by choosing the silver plan instead of the gold plan with much higher premium and same co-pay. That year I never reached my deductible amount for my family and didn’t get to use the benefits.
After few days I decided to look at my costs from two years ago. Same result, I paid for premium that I didn’t get to use and lost more money. I quickly learned that I was better off not having insurance but paying for my doctor visit in cash. No one thankfully in my family had a major operation or an overnight stay at the hospital for both years. What I really spent thousands on was simply “what if”, what if something unforeseen happened. I paid for peace of mind that I am better off with insurance just in case something unpredictable might occur.
And that’s the question that we should all be asking, how much are we willing to pay for peace of mind? knowing that if something bad was to happen we’re better off paying in most cases 20% vs 100% without insurance.
But before we answer, can we start distinguishing between health care and health insurance. Your car insurance is not your mechanic or body shop. It is important we understand the difference because we hear our leaders mix the two as if both are one and the same.
Here are some ideas that I believe will have a major impact on lowering the overall cost for every American.
My friend wanted to get his son a flu shot. He walked into a medical facility and they told him that he can get the shot for $25 but had to wait 2 hrs. He didn’t want to wait that long so he drove to another place. At the second place they asked him if he had insurance and he replied yes. They took his insurance info and gave his son the flu shot. He paid his insurance co-pay of $40. Obviously he was not happy that with his insurance he paid more than if he didn’t have any insurance and simply paid cash. What was even worse, he received his statement from his health insurance stating that they paid $150 on top of his $40 for the flu shot that cost $25 in cash. That was with a special discount that his health insurance received. And that’s just one simple example of how pricing works. Someone else would make a different co-pay amount and his health insurance would also make a different payment. So imagine the variances of costs at the same hospital for the same procedure and same tests.
This in some way is equivalent to consumers walking in to get a hair cut or a sandwich and each pays differently according to the car the drive or the brand of clothes they’re wearing.
The first step should be, mandatory one pricing for everyone and the prices should be visible to the patient so that he or she can make educated decisions.
2- Government health insurance at a price. Medicare for all at an affordable premium.
The idea that we can only count on private health insurance companies to provide coverage that’s in our best interest is naive at best. When these companies are by nature for profit and care only about their share holders bottom line as they should. They’re in the business of making money not in the business of care.
On the other hand, the idea of providing everyone with free health care is as naive at best. Health care is not cheap.
The idea behind insurance is simple. The bigger your pool the better off the insurance is. Meaning that you’ll have more healthy people paying for peace of mind than sick ones that require higher health cost. That is the reason why everyone should be insured.
The uninsured avoids doctor visits because they can’t afford it. A flu can turn into a pneumonia then into bronchitis and maybe even worse before they end up in the emergency room and the cost of their care moves up from $100 to thousands of dollars that goes unpaid because that patient can’t afford to make those payments. The hospital staff are still getting paid, the doctors are still getting paid, the lab etc all are getting paid. So the hospital passes those costs to the health insurance companies. The health insurance companies then passes the costs to us the consumer in terms of higher premiums and lower coverage. Hence another reason to have everyone insured.
Now let’s talk about Medicare for all at a price. Basic health insurance coverage that covers doctors visits, necessary operations and hospital stay including medication and dental care. A $45 monthly premium for everyone earning under $45,000. A $15 for everyone else living in the same household. And the premium increases from there say for every additional $30,000 in income, the premium goes up by $15 and let’s top it at $300,000 earning per household. Obviously anyone unemployed or at poverty pays nothing. If all three hundred and thirty million Americans are insured by this basic government plan that ensures peace of mind for all at a much lower cost, then that premium money should be enough to cover the costs of all assuming the other steps highlighted here are implemented.
I for one would exchange my current little coverage, high deductible and high co-pay health insurance for this 100% government coverage insurance in a heart beat without any further consideration.
This government health insurance, let’s call it Medicare for all would be in the business of care and nor in the business of money. For individuals seeking additional insurance, they can purchase that from private companies.
3- Drug cost and research
This one has multiple benefits that I’ll discuss.
Ban state universities from doing research for private companies, put them back in service of the public and encourage competition.
The government should give incentives and prioritize state universities over others to any breakthrough in treatments or cure of diseases. This can apply to other areas as well
Here’s what the government should offer, a year to three year savings that would come from preventing, curing or providing treatment of diseases to the university that makes such discovery. For example, say the cost of care for one form of cancer is at one hundred million per year. The university that discovers the cure or prevention will get one hundred million from the government as a reward. But there’s a catch.
1- 50% of that money can go into new infrastructure, expansion, attracting brilliant minds. The other 50% goes towards scholarships providing free education to their students. Any access of that money goes towards local community colleges for scholarships.
2- The medication patent is owned by the government. The government then can get bids on production of the medication not to exceed five times the cost of manufacturing it. Ensuring low cost of medicine and treatment.
I believe that these steps are a realistic approach to controlling our health cost and providing meaningful and useful health insurance for all.