Tuesday, March 16, 2010

Telling Us What We Want to Hear on Health Care

It’ll probably come as no surprise to find that I’m still confused by ObamaCare.

As far as I can tell, ObamaCare does little to control what health care costs. Yes, I can probably get tax credits to pay for insurance, but in order to qualify for the credits, I’d have to spend more on insurance than I’m already spending. And that does nothing to prevent private insurers from raising rates, or to prevent hospitals or pharmaceutical companies from charging the prices they do for what services they offer. We’d just be throwing more money into that hole.

How can I call it a hole when it’s insurance meant to pay for my family’s ills if, heaven forbid, we had an accident? Well, for the past two years I’ve paid into the insurance system. Have not filed a claim. Yet our premiums rise. Prices are going up, and even though I’ve done nothing but pay premiums, I’m still getting spanked by those rising prices.

Conversely, we haven’t had a claim on our auto insurance or homeowner’s insurance ever. Not in 13 years of marriage. And guess what? Those premiums are going down. Good job, our insurers say. You’re a good risk. We can reward that.

Not so the health insurance companies.

Robert Samuelson, writing for Newsweek, agrees (emphasis mine):

Though it seems compelling, covering the uninsured is not the health-care system's major problem. The big problem is uncontrolled spending, which prices people out of the market and burdens government budgets. Obama claims his proposal checks spending. Just the opposite. When people get insurance, they use more health services. Spending rises. By the government's latest forecast, health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019. Health "reform" would probably increase that.

Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care. Obama refrained from that fight and instead cast insurance companies as the villains.
I've read the stories in which Obama villifies the insurance companies. It's good public relations -- nobody likes health insurance companies -- but making them the villains isn't addressing the core issues, Samuelson says (again, emphasis mine).
He's telling people what they want to hear, not what they need to know. Whatever their sins, insurers are mainly intermediaries; they pass along the costs of the delivery system. In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion.
I’m not sure what he means by vouchers, or how such a system would “force a restructuring of delivery systems to compete on quality and cost,” but I’d like to think there’s something we could do to keep these costs under control. What’s currently being proposed, however, doesn’t do that. Why do Democrats think shoveling money at social problems is the way to fix them? And why do Republicans think that the private sector is the answer to everyone’s woes? The private sector is keeping those prices up and spiraling higher. And throwing money at the problem isn't going to make prices come down.

To those who don't believe we're being priced out, I challenge you to ask your employer how much they pay for your healt insurance (if you're lucky enough to have an employer who does pay for a portion or all of your health insurance; I am not one of those). You'll find out quickly that it's an expensive proposition. My wife and I pay out of pocket for a bare-bones plan that'll cover us if we're in an accident or get cancer (at least up to a point) and maybe that's good enough for now. But for later? I don't know. My in-laws, both retired, buy their own insurance, at a better level than ours. It's expensive, even with the Medicare supplements they get. And they travel to Mexico to buy their drugs. They pick up some for us, too.

Not having insurance isn’t the problem; the problem is as Samuelson says: We’re being priced out of the system. The private sector currently has no motivation to keep prices low. Most everyone, when the time comes, will plunge headfirst into the healthcare system, costs be damned, because either they’ve got insurance or they know the government will somewhere, somehow pick up the tab, or at least most of it. Yes, there are people, like my wife and I, who avoid going to the doctor because we know we can’t afford it, and know that we don’t qualify for any government handout. But our window of taking such an approach is closing. We’re both getting older. Our kids are getting more active and, frankly, more likely to get hurt.

An update: The last time I blogged on this topic, I mentioned that I'd e-mailed the White House health care e-mail box with a question on ObamaCare. I have not received a response.

1 comment:

Brian said...

I agree with you totally when you talk about when you talk about being priced out. Doctors raise their rates hoping to get reimbursed what their costs actually are. Insurance negotiates rates to keep them low. And people have no idea what the costs are because most the time we all go in and pay our copay and the insurance sells the rest. I think one reform that would work is to remove third party payers. If I receive a service I should pay for it and then I get reimbursed by my insurance company rather than them paying the doctor directly. If people understood the true costs I really believe they would feel differntly about the costs. And employer provided insurance is in the same boat. I know what mine costs and I know what my employer pays for me but it is taken directly out of my paycheck twice a month. I don't really feel the pain because I know I get so much every twice a month and that's what I live off of and pay my bills with. The same can be said for taxes. If we had to pay them ourselves instead of having them taken out of our paycheck I think many of us would feel completely different about the amount of taxes we pay.