Posts Tagged health insurance
Wishful thinking is not sound public policy. (Bjorn Lomborg) The South, unlike the rest of the US, has rising numbers of the uninsured. The “Health Reform Monitoring Study” from the Urban Institute is disturbing . Why? Because insurance subsidies were supposed to insure more people. The problem seems to be the money is not reaching the people who can’t afford insurance. The original ACA plan was for Medicaid to cover the very lowest income people then at some higher income level the ACA insurance subsides would take over. Many states in the South did not elect to expand Medicaid so there is a gap between Medicaid and the income level at which ACA subsidies are available. According to the study, the most frequent reason given by uninsured people for not having insurance is: “it costs too much” and second “it might affect immigration status”. The following is a graph is a comparison of each region between 2013 and 2014: The South has a huge problem with health literacy — many residents have no idea how to approach health insurance. About 11% of Southern uninsured people say they do not want insurance — it’s like asking someone if they want a kumquat — if you don’t understand what it is or what it costs you might not want one.
The Governors of the Southern States are hurting people, not something expected. Somehow they thought by not expanding Medicaid and ignoring the ACA the health care problems in the South would go away or get better by magic. Wishful thinking is not a strategy for success.
I waited a month before before using Connect for Health Colorado because I heard about the insurance exchange website problems. The exchanges started in October. It’s November now so I did it — I purchased health insurance with the exchange. There were a few minor website issues which I will discuss later but, overall it was a vast improvement over what I went through just a year ago. As expected, the price was higher than last year (it’s higher every year, nothing new).
Over the past few years I have had insurance problems. I left my previous employer and their group insurance plan but purchased individual insurance from the same carrier according to COBRA rules — other individual insurance choices were very expensive. After 18 months COBRA came to an end and so did my insurance. Along the way I moved to a different state. So, I had to get new insurance in a new state. I quickly learned insurance companies require payment of the first month premium before they would would consider an application (or tell you a firm price), a definite deterrent to applying for too many alternatives.
I applied to 2 insurance companies and dutifully filled out the 15 page health questionnaire for each. One company, the affiliate of my original insurance company, immediately rejected my application, no questions asked. I suddenly realized I had been designated persona non grata within that national carrier without even knowing it — the possibility of insurance with them had been cancelled. Too old, too many claims, who knows? They advised I contact a state program for people in my situation (increased risk so let the state take the case!)
The other company requested a letter from my doctor and after some anxious weeks they approved my insurance (for which I will always be grateful).
Now, a year later, my new insurance company sent me a letter stating that all their policies were being revised to comply with the new insurance rules. They promised to let me continue as a customer with a new policy but, the current policy was cancelled. Not again!
I fired up my computer and logged on to the insurance exchange. There were four insurance company choices. Each insurance company had a quality rating 1 to 5 stars and a list of prices and benefits. Thankfully, my current insurance company had 5 quality stars and was also the lowest priced. I noticed the original insurance company that gave me the lightning rejection last year now wants my business — sorry big buddy, your application is rejected by me!
The information I had to enter was minimal. The only intrusive information required was whether I smoked (heaven forbid) and my race. But, compared to the questions last year this was a piece of cake. Last year it took me 6 hours to get through all the questions, now the whole process took only an hour. Last year I felt like every question was intended to disqualify me or find some evidence of a preexisting condition. This year the pressure was off.
I added the insurance to my “CART” and checked out. I must pay the first month premium, but not right now. Finally, there was the “DONE” button which was a nice touch.
As I mentioned initially, there are a few website issues. On several pages the prompt to enter information overlaps with the actual information field. One page opens at the bottom not showing missing information at the top — when submit is clicked the site says information is missing — I scroll up and fill in the blanks. Finally, the system has difficulty finding my current provider’s name — only by using “ADVANCED SEARCH” is it successful.
Overall, I am very satisfied with the experience. I suppose people who have not applied for insurance in the past few years will fail to realize what a huge mess we had. Health insurance cost needs to come down — fodder for more blogs!
This premium and that deductible — which to choose? If you ever had to purchase health insurance it’s not all that clear — and you wonder, what are they hiding?
We all face the risk of serious illness and the associated high costs. The above graph is about the risk for a couple age 60 to 64. The horizontal axis is the possible health bill from zero to something very large. The vertical axis is the number of people who accumulated the health costs enumerated on the horizontal axis. Although the most likely bill is about $10,000 there is a possibility of any amount. Unless a person has an extra million dollars lying around we purchase insurance to cover the unexpected health bill (or go bankrupt).
An insurance company keeps detailed records of health care bills for people of of various ages. Point C on the graph is the mean (average). Insurance companies have thousands if not millions of customers. So, they don’t need to know what might happen to any one person, all they need to know is the mean cost for the age group. 100,000 people times the mean of $18,000 is $1.8 billion — that’s how much they will pay out in a year (plus or minus a small percent).
The insurance company knows that point C on the graph for the benefits they offer. Then they devise an insurance plan to collect that amount so they can pay customer health bills. You might think that amount of money is a secret but not really. Below is a graph of the offerings on the internet of a real insurance company in May of 2013 for 2 people age 60-64. The yearly premium is on the vertical and the deductible is on the horizontal. The blue dots are the plans offered.
Interestingly, the blue dots are on a straight line! The line B to C is that straight line through the offered products. Point A (numerically the same as point C) is that amount you would pay in premiums if there was no deductible — in other words “first dollar coverage”. Point C is the deductible you would pay to have no premiums (true, no insurance offers such a plan). Thus, point C is that mean cost per customer as in the top graph (it also includes the operational costs and profit for the company — usually about 20%).
What is Point B? — it lines up with the blue dots of the actual plan. It looks like the amount you would pay if the deductible was zero. Not so fast, the difference between Point A and Point B is the amount the customer is likely to pay in co-pays and co-insurance.
The gap between the red line and the blue line is paid by the customer if they use health services. The part the customer pays is usually limited by the “out of pocket maximum”. If the customer does things to stay healthy it gives them a chance to actually pay less.
Comparison shopping is very difficult. The plans and benefits from insurance companies are different. The best advice is to purchase from a top rated company with good customer satisfaction. If you don’t have much savings a low deductible plan has advantages. If you can stand occasional high bills a high deductible plan may work. Check out insurance company ratings by Consumer Reports and JD Power.
Graph from N Engl J Med 2012; 367:3-6July 5, 2012
The graph above comes from an article in the New England Journal of Medicine by David C. Radley, Ph.D. MPH and Cathy Schoen, M.S. It shows the distribution of uninsured adults across the United States. Large parts of Texas, New Mexico and Alaska have over 50% uninsured adults. Wisconsin and Massachusetts have less than 15% uninsured adults. The graph is the result of an analysis of US Census Bureau data from 2009-2010.
The areas with low rates of insurance are also the areas with other health problems. The authors conclude the uninsured areas are associated with low quality care, poor access to care, unsafe prescribing, increased visits to ER for avoidable conditions, and more avoidable deaths.
The bottom line is the US healthcare system is designed for high cost and low quality care especially for those who choose not to have insurance or those who can not afford insurance. Unless a person is extremely wealthy it is very unwise to forgo insurance in this environment. The maldistribution of insurance enhances the argument for those in states with high rates of insurance not to pay more in taxes to cover those in states with low rates of insurance. It seems strange that the states with enhanced revenue from oil and gas can’t seem to correct the insurance gap.