Recent developments in the Democratic Caucus of the U.S. Senate may have sidelined once and for all expectations for a robust public option and Medicare buy-in for individuals between the ages of 55 and 64. Both the public and Medicare buy-in options were proposals designed to insert effective competition into the health insurance marketplace. Why does the health insurance industry fear these proposals? Because they just might work.
The Insurance Industry vs. the DMV
We have been led to believe that government cannot do anything right. “Would you want your health care managed by the same people who brought you the DMV?” health care lobbyist, Dick Armey proclaimed in a television interview.
A few months back I had to go the California Department of Motor Vehicles to renew my vehicle registration. When I got there, I discovered a building teeming with people; there was a line of people that extended out the door and a security guard did her part to keep the exit unobstructed. Much to my surprise I reached the front of the line within 4 minutes. When I informed the man at the front counter what I was there for, he handed me a ticket with a number on it. I took my seat to wait for my number to be called. Seven minutes later I was called to a counter. (Wow, maybe all this technological automation at the DMV actually works!)
The DMV official worked her computer magic, looked up and said, “Your renewal comes to $523″.
“Oh my!” I exclaimed, “I can either pay my rent or my vehicle registration renewal.”
“Hold on!” she said. She fished in the drawer for a form and placed it on the counter in front of me. She explained I was a few days late and because of the state budget crisis, fees have been raised since last year. My fees for the same vehicle last year were only $213 and it being a year later, with the depreciation of my vehicle, I had expected to pay around that amount.
“If you’ll just write down what you told me, I will see what I can do,” the DMV official said.
I filled out the form while her fingers did their magic on the computer keyboard. She removed late fee charges on registration fees and a parking ticket that was added to my bill. “Can you pay $312?” she asked?
“Yes that works much better,” I replied.
My Experience With Aetna
When I returned home, my mailbox was filled with envelopes from Aetna SRC. One after another of my physician bills were denied coverage. I promptly called Aetna. When I asked why I was denied coverage I was told that I was on a limited plan and my condition was not covered. There was no specific mention of this exclusion in my plan. The employee materials only stated this was a “limited plan” and “may be subject to exclusions”. Apparently the plan was written in Georgia (which I did not know) and according to the Georgia Department of Insurance, Aetna was under no obligation to specify all exclusions for this plan in the plan materials. My employer without telling their employees had opted out of riders on the plan to cover certain conditions but neither their materials nor Aetna’s informed us of this fact.
I appealed to both the insurance company and later to the Georgia Department of Insurance–all to no avail. The appeal to Aetna insurance had to be handled by another department, the Aetna service representative on the phone was not allowed to transfer me. I would have to wait another month to six weeks for their answer. More delay. More denials.
When I compare my treatment by Aetna to the treatment I’ve received California DMV I am ready to say to Dick Armey, “Yes, I would prefer the same people that run the DMV run my health care insurance.” Why? I have found, contrary to Dick’s assertions, that Federal, State and Local government employees tend to be people just like you and me. They are not evil and heartless. Evil and heartlessness are all I have experienced from my insurance carrier. In California, an entry-level worker at the DMV was empowered to help me out on the spot. She didn’t have talk to her manager and ask permission. Whereas at Aetna I was not even allowed to speak to persons to who could make a decision on my appeal. Was this deliberate? Did their disconnection from the people for whose lives they imperil make their jobs easier? I’m just wondering Dick!
Government Run Health Care
Medicare, much to our surprise, is a government-run health care program. Medicare is America’s most loved and best run health care insurance program. Only 3¢ of every Medicare dollar goes to overhead. No money is set aside for profits. The other 97% of Medicare funding goes to health care. Private health care companies spend about 20 cents of every premium dollar on overhead, which is administrative expense or profit. So they don’t want to compete against a more efficient competitor. Their fear is that a public option would be so popular that private insurance carriers would go out of business.
Here’s one thing Dick Armey and all the Health Insurance industry lobbyists won’t tell you about. It is called “medical loss ratio”. This is what the industry calls the ratio of profit and overhead to “losses” the company incurs by actually paying your medical bills. A change in this ration by a factor of only a percentage point can a cause an insurance company’s stock price fall 20 percent in a single day. Insurance companies limit “losses” by not paying claims, second-guessing doctors, and throwing higher risk and non-profitable persons off their insurance rolls. This is something Medicare and Medicaid just don’t do.
Killing Grandma’s Children & Grandchildren
Lobbyists for the health care industry would have us believe that privatization of health care would lead to rationing, thereby “killing grandma”. Again, Grandma is likely over 65 years old and she with her Medicare coverage is more likely to kept her alive than the public sector. Some claim that rationing is so bad in that country that borders to the north of us, that Canadians are streaming across the border for good old-fashioned private health care. The fact is there are more persons denied coverage by private insurance companies in the U.S. than the entire population of Canada. Moreover, a recent report published by The American Journal of Public Health | December 2009, Vol 99, No. 12 claims that 4,000 Americans die every year due to lack of coverage.
“Lack of health insurance is associated with as many as 44789 deaths per year in the United States, more than those caused by kidney disease (n=42868).41 The increased risk of death attributable to uninsurance suggests that alternative measures of access to medical care for the uninsured, such as community health centers, do not provide the protection of private health insurance. Despite widespread acknowledgment that enacting universal coverage would be life saving, doing so remains politically thorny. Now that health reform is again on the political agenda, health professionals have the opportunity to advocate universal coverage.”
The fact is the government is NOT “killing grandma” but our private insurance industry is killing her grandchildren. This is why many have concluded that Medicare for all would be the optimal solution for America’s health care woes.
Consumer Affordability of Health Care
Health care reform without a public option or Medicare buy-in will do absolutely nothing to drive down consumer costs. The current plan under consideration in the Senate will just make premiums unaffordable and mandatory. Those with pre-existing conditions rather than be denied health care altogether, will be forced into paying exorbitant sums to an unscrupulous insurance industry. This is the worst of all possible outcomes and a gigantic undeserving gift to insurers.
While the insurance industry places profits before patients, shouldn’t Congress and our President consider putting us first for once?Jeffrey Levin is a marketing professional living in San Jose. He is a news junkie who enjoys blogging about political and ethical issues of the day. He is a strong advocate of human rights, health care reform, meaningful approaches to climate change, re-building America’s economy, diversity, diplomacy and restoring America’s reputation among the family of nations.