Health Ramblings: Revised

Reading this article at the LA Times outlining the attacks on the personal mandate to buy health insurance leaves one asking: why are the Democrats solely focused on health insurance reform? Never mind that there isn't a single way in which it could be found constitutional, but on the most basic of levels insurance never has complete control on costs. No insurance company forces down costs on anything in this country. Not fire insurance, auto insurance, flood insurance, renters insurance, none of it. The only thing an insurance company does do is lesson the amount of out of pocket expense at the time of service to the customer. It is far more likely that the vast majority of people will pay more in insurance premiums than they will ever receive in coverage except in health insurance.

If someone has Kaiser insurance from age 20 to age 40, then changes insurance for some reason to say, Blue Cross, Kaiser still has all of those premiums the customer paid them. Blue Cross has none of that money. Now only 4 years into the Blue Cross coverage the patient needs a by-pass surgery. In 4 years did the customer pay that kind of money in premiums? Of course not but in 24 the person most likely would have. This is why there must be a way to create portability in the health insurance industry and that doesn't mean personalized health care accounts as some talk about ad nausea. Pre-tax flexible health care spending accounts already exist and although that should be a standardized government provided "account" where the money rolls over year to year unlike the current private run accounts, that isn't the same as somehow having health insurance portability.

Let’s say you have someone that gets cancer. In order to fight to stay alive, the health bills run up over $100,000. Now with a very good insurance plan, said person could probably pay only $10,000 of her own money post-insurance premium payments. Now unless this person is 60 and been paying the insurance company premiums since they were in their 20's or so, it is highly, highly unlikely that the person has paid the insurance company $90,000 in insurance premiums. So where does the insurance company come up with the difference between what the customer has paid and what they have to pay for all of the treatment? From the massive pull of every customer premiums. If you look closely enough, you may see the inherent socialism in such a way of doing business.

Hospitals, in large part due to government (federal and state) health plans, have had to shift more and more away from itemized bills and instead take the average daily cost of a patient being in house, add that amount to the daily bed/room charge, and get rid of the itemizing. A patient that maybe stays a night or two, never ends up on an IV or SCD, maybe needs only a dressing or two is now paying the same daily rate as the patient next to them getting IV fluids, on O2, and maybe even on a food pump plus going through tons of supplies. Welcome to universal coverage via Hospitals.

Both of these examples, among countless others, are why attacks of socialism and the need for universal coverage don't hold up. It is also why the attacks on health insurance companies, no matter how immoral it is to deny someone due to a preexisting condition, are comical.

Insurance Mirage's
People claim two things as key to health care reform as the best way to push down costs. They claim 1) A non-profit government program is essential and 2) It must be a national program so that it can have strong bargaining power. Fundamentally wrong is the first point while the second points is the greatest argument for why in theory state barriers, as Republican’s claim, should be stripped but let’s follow the path as to why in practice, under current law, it doesn't work but describe a way in which it could:

1) All over the country there are non-profit insurance companies and sometimes they're the cheapest and sometimes they're the most expensive and sometimes they're right in the middle. See Kaiser as one example.

2) Health insurance companies can already compete in any state in the country. Kaiser, formerly based in California only, has recently set up shop in North Carolina. They decided it was worth going through the state level red tape to do so. (They're struggling in NC while doing quite well in CA. Analysts aren't entirely sure why.)

3) It shows a fundamental lack of knowledge as to how health insurance works in this country, let alone the differences from one state to the next, to claim that a citizen in New York should be able to purchase an insurance policy from a company based in Oklahoma. The reason this works for car insurance is because State Farm, Gieco, All-State, and Progressive all have local operations in every state that operate under different state regulations. Their already are health insurance companies operating in multiple states but it doesn't make their bargaining power any stronger in Oregon simply because they have customers in Florida. The biggest reason for this is that each state tends to have very different state regulations, different hospital networks, Doctor Groups, nurses unions, etc. As the saying goes, "all politics is local" and as Alan Katz pointed out, so to, is health care.
 
4) How it could is if you held a state convention where all of the states agreed on an absolute minimum allowing for each state to strengthen, but not weaken the minimum legal requirement level of coverage. Another huge sticking point that would help would be to standardize approval processes for Doctors accepting health insurance so that no one has to be denied a specific Doctor just because he doesn't take the insurance the patient has. In other words, the administration headaches each insurance company gives Doctor Offices shouldn't vary as widely as they do from one company to the next.

If politicians really wanted to make a difference in the field of health care they'd fix things locally -at the county level ideally. Think of how many times you've heard an argument for what is wrong in the health care system (or any other aspect of society) and thought "that doesn't sound right to me, I don't have that problem" or "my city doesn't have that problem". If we nationalize the solutions to regional or local issues, unintended consequences will be rampant for only one universal truth exists in the American health care system: Every region has varying health issues that get dealt with in various ways.

Take the idea of taxing sugar drinks (soda, etc) as a way to fight obesity. What happens if you live in a small town with less than 5% of the population overweight yet now 100% of the town is paying more for soda?