The difference between healthcare and health insurance explained (mostly for Republicans and Trump’s acolytes)

People like GA Republican Rep “Buddy” Carter and the rest of the GOP are either misleading Americans or out-and-out lying to them.

They either don’t know the difference or are intentionally obfuscating the difference between healthcare and health insurance *choices* by either unwittingly or knowingly talking about them as if they are one and the same, and that Americans are somehow being held back from making choices because of the Patient Protection and Affordable Care Act.

 

The only people who won’t have choices and who will be left behind by the GOP are people who aren’t covered by employer-subsidized health insurance and who aren’t poor enough to be covered by Medicaid. The so-called “free market” cannot solve this issue of access to healthcare in an affordable way for EVERY SINGLE AMERICAN.

It’s a Business – That’s the Problem

Health insurance as a business exists solely because healthcare has become too expensive to be a service one can pay for out-of-pocket.

Doctors stopped accepting chickens decades ago, and a 1.2trillion dollar industry – the insurance industry, that is, of which 55% is in the life/health side of the business – has absolutely nothing to gain and everything to lose as a business by actually insuring people who need healthcare.

Why does healthcare cost so much? Lots of reasons, I think, but mostly for two reasons.

Capitalism at its Worst

The first is because we’re all just greedy enough and selfish enough in capitalist America to actually put a price tag on healthcare and on life itself.

As every good capitalist would tend to agree, the more expensive something is, the better it must be (or at least many of us have convinced ourselves of that premise).

So, if healthcare costs a lot and some people are priced out of it, c’est la vie. That’s capitalism and free markets at work, right? (“Yeah! Tell those lazy poor people to get a job!”….and all of that dysfunctional and inhumane nonsense we hear all the time from libertarians and conservatives.)

The second reason healthcare is so expensive is one that many may not realize. It’s *how* it’s paid for in America.

30% of the cost of delivering healthcare in America is tied up in “administration.” That’s a euphemism for processing claims; claims that are paid by insurers whose profit motive is to take in billions in premiums and to not pay or to pay claims as slowly as possible.

Make no mistake about it. Private health insurance companies are the real death panels.

Compounding the problem of administrative overhead costs is that every health insurer has a different way to process claims. It’s why 1 in 4 people who work in healthcare work in administration.

In 2015 there were 859 health insurance companies in the the U.S. Even if all you count are the top 25, that’s still 25 ways a healthcare provider will have to know how to process claims if they want to be paid. That, or they turn away patients who have health insurance they don’t know how to process, or they outsource claims processing to a third party. Whatever decisions they make, it all adds up.

Single payer eliminates it all.

You Had 8 Years and Trumpcare is the Best You Can Do?

As for the embarrassment that is the GOP abomination presumably 8 years in the making, “choice” is among the many lies “Buddy” Carter and the rest of the GOP are trying to sell you on now.

I worked for a company that provided technology to insurance carriers. Not agents, the insurance companies themselves. I saw it from the inside. Here’s how the industry works in a nutshell.

Insurance companies come up with products – the plans they want to sell. They have to file the products with each state’s Department of Insurance where they wish to sell said product(s). Each state decides independently as to whether they allow said product to be sold to their citizens.

One of the many Protections in the Patient Protection and Affordable Care Act that insurers did NOT like (they only liked the mandate) was the elimination of junk insurance. It’s called that because that’s what it is.

Junk insurance were plans like the one I had to have a few years back when I was laid off, couldn’t afford COBRA coverage, and didn’t want to risk being “tagged” as uninsured by a future employer and their insurance company. I went to the open market in those pre-Obamacare days.

The plan I found and that I could afford was UnitedHealthOne Saver 70. It was $275.00 per month. It had a $12,500.00 deductible, paid only 70% after that was reached, and didn’t cover office visits or prescriptions.

That’s the kind of “choice” the GOP and insurance companies want back. A cheap plan that for all practical purposes guarantees the insurer will never have to pay benefits on because the insured will never go to the doctor because that’s another out-of-pocket expense, and they can’t afford the 12-grand anyway before benefits would kick in.

If Ryan and the GOP get their way with Trumpcare’s threat of a 30% buy-back-in penalty, junk insurance will fit the bill perfectly. It will make millions off of poorer Americans who will never file a claim but who will buy junk as a hedge against that future buy-back penalty.

Insurers Put Profits Over People. Period.

The insurers who are whining and crying and gnashing their teeth as they abandoned the Obamacare health insurance exchanges in some states didn’t abandon their health insurances business (although it must be understood that some insurance companies were so greedy they did stop selling health insurance because of the PPACA’s 80/20 rule).

The insurers who have left state exchanges did so because they couldn’t make enough money in those places and from people who were previously uninsured but who are now able to get healthcare for which the insurance company must pay.

Which brings us back to Rep Carter. He’s either an idiot or a liar or both.

I take that back. What he is is a Republican politician.

In my view, the sooner Americans come to their senses and stop voting for Republicans at every level of government, including the state and local levels, the better off we all will be, and the sooner we’re likely to move to a healthcare system that serves us better and which every American can benefit from regardless of their income.

 

Sources

INSURANCE INDUSTRY AT A GLANCE

The Reason Health Care Is So Expensive: Insurance Companies

Top Health Insurance Companies

Administrative costs are killing U.S. healthcare

Rate Review & the 80/20 Rule

 

Blogs I’ve written in the past on the topic of health insurance

More #PPACA Red Herrings: Renewals and Benefits

The ‘Protection’ in the Patient Protection and Affordable Care Act

Health insurance companies keep making the case for single payer

Congress Poised To Permanently Fix Its Medicare Payment Glitch

See on Scoop.itDidYouCheckFirst

Doctors would be paid according to their results, rather than the number of services they provide.

Greg Russak‘s insight:

Let me see if I have this right. The concern here is that doctors aren’t paid enough for providing services to the poor.

The changes presumably needed include new measurements – outcomes vs procedures – which sounds reasonable to me. Pay for performance – a good capitalist ideal! – and potentially reduce the overall cost of health care by ending the “reward” system for endless (and useless) tests and procedures. (Insert argument for tort reform here.)

But, we’re told, what’s also needed are higher reimbursements; otherwise, more and more doctors will refuse to accept and care for Medicare patients. Let me ask this question. Is this the “free market” theory we really want in this country for something as basic and critical to life as health care?

Meanwhile, 15% of the American populace lives at or below the poverty level, the federal minimum wage is a sub-poverty $7.25 an hour, the wealth gap is bigger than it’s been since the original Gilded Age, the Defense Department’s budget is bigger than the next 15 countries combined (all of whom are allies since we’re not at war – at least not today – with any of them), and fixing how doctors are paid for Medicare patients is the issue Congress is supposedly finding near-unanimous support on?

Do you think organizations like the American Medical Association and some Big Money interests might be influencing the work on this one?

What am I missing?

See on www.npr.org

The Case for #SinglePayer

Here’s the question I have for those who oppose the PPACA and, more to the point, who oppose single payer health care.

How are our poor and uninsured fellow Americans supposed to pay $170.00 for a 20-minute office visit when they’re sick?

That’s the gross charge on the bill I just received from my doctor. I had flu-like symptoms last month. 20 minutes. $170.00. That doesn’t include the over-the-counter and prescription meds he prescribed. Add another $51.67. Even with insurance, my out of pocket for the office visit is $97.56. Add in the meds, and I’m not ashamed to say that I don’t have 150 bucks just lying around.

With the nation’s economy in recovery, the report said, more than 70 percent of low-income families and half of all poor families were working by 2011. The problem is they did not earn enough to cover their basic living expenses. (http://presstv.com/usdetail/283876.html)
With the nation’s economy in recovery, the report said, more than 70 percent of low-income families and half of all poor families were working by 2011. The problem is they did not earn enough to cover their basic living expenses. (http://presstv.com/usdetail/283876.html)

Now put yourself in the shoes of the 46.5million Americans living in poverty.

Not Americans with ok jobs but struggling to get by (like me); not Americans scratching and clawing and maybe starting to see the light in the long tunnel they’ve been in, hoping they are on their way into something approaching a middle-class life.

No, not them.

Put yourself in the shoes of 46.5million human beings living in poverty in the world’s richest nation.

What is poverty?

Poverty is defined as 23grand a year for a family of 4. It’s just under 12grand for an individual.

Now do some basic math.

If you could find a minimum wage job (or jobs) at $7.25 an hour and actually get 40 hours per week of paid work, you’d earn $15,080.00 a year. As an individual, you’d be $3,590 above the poverty threshold, or about 300 buck a month above poverty.

If you got sick, had insurance like mine, and did what I did, you just spent half of that “luxurious excess of 300 bucks above the poverty line” on one doctor’s visit and meds. That’s IF YOU EVEN HAD HEALTH INSURANCE AS GOOD AS MINE which, by the way, is the highest deductible and lowest cost insurance I can get from my employer. It is no Cadillac plan by any measure.

What if you’re the head of a household of 4? I can’t imagine what or how you get through your day if you’re making 15grand a year, let alone what you do when you or your kids get sick.

Think about this. 46.5million Americans is 15% of the population, or about 1 in 7 Americans.

Look around you right now. Are there seven or more people in your field of vision? No? Ok, then think about your close friends or family members. Now picture one out of seven of them living in poverty. Poverty. Not can’t-go-to-Disney-this-year or have-to-trade-steak-for-hamburger kind of “struggling.” No. Picture 1 in 7 of them in grinding, unrelenting, spirit-killing poverty.

Does this help at all to make the case for why health care in the greatest country in history should be a basic human right and not a for-profit industry? (Please save the not-for-profit rebuttal for people who don’t understand what that actually is, which would include you if you’re thinking of making it.)

Our society would find a way to survive – hell, I postulate it would thrive and prosper like never before! – if we stopped putting greed above all else and did things like make health care a basic human right provided to every man, woman, and child in America; health care that truly was universal and paid for out of taxes collected from EVERY American fortunate enough to have a job.

Call it the Christian thing to do.

Call it the humanist thing to do.

Call it whatever you like, but if you’re opposed to the idea of universal health care I don’t know how you call it anything but selfish.

Let’s be clear on this point, too. The only way to pay for universal health care from a single payer is through the government as that single payer. If you’re going to try and make the argument that health insurance is somehow a value-added step to the delivery of health care services then, again, make that argument to someone like yourself who doesn’t understand how the health care delivery or the health insurance industries actually work.

jimmy-carterWould it really kill us if health care was paid for out of our taxes instead of out of payroll deductions? Not everyone can afford health insurance even with PPACA subsidies – our taxes, don’t you know – that get sent as premiums to private health insurance companies who are now responsible for 30% of our total health care costs in the United States.

30%! That’s 30 cents out of every dollar spent on health care in America going to overhead needed to process and pay claims through a sea of private insurers. Know what drops our health care costs by 30% immediately? That’s right. Single-payer. Medicare for all.

Let’s wrap up with a moral question. Don’t the “haves” have some sense of moral obligation on some level to help those among us who don’t have anything?

If I’m worried about 150 bucks out of pocket for a doctor’s visit and some cold medicine, how are the 1 in 7 fellow Americans living at or below the poverty line supposed to have 150 bucks just lying around for health care?

What are they supposed to do, not eat that week; not pay the rent; not pay their utilities; not cloth their kids?

What exactly do we want them to do when they get sick?

I’d like some answer from you opponents of universal and single payer health care. What do you want them to do?

 

Medicare Denials Higher than Commercial Insurers?

Here’s the version of the email recently sent to me:

According to the 2008 Health Insurance Report Card (PDF) released by the American Medical Association, the “carrier” with the highest percentage of denials is . . . Medicare.

Metric 12—Percentages of claim lines (i.e., records) denied

Description: What percentage of records submitted are denied by the payer for reasons other than a claim edit? A denial is defined as: allowed amount equal to the billed charge and the payment equals $0.

Source: NHXS

Payer

Count of records

Denied records

Percent of

claim lines

denied

Date range

Aetna

637,239

43,317

6.80%

03/01/2007 – 3/10/2008

Anthem

250,070

11,546

4.62%

03/01/2007 – 3/10/2008

CIGNA

263,728

9,060

3.44%

03/01/2007 – 3/10/2008

Coventry

20,487

590

2.88%

03/01/2007 – 3/10/2008

Health Net

4,975

193

3.88%

03/01/2007 – 3/10/2008

Humana

143,026

4,142

2.90%

03/01/2007 – 3/10/2008

Medicare

6,938,431

475,566

6.85%

03/01/2007 – 3/10/2008

UHC

1,127,691

30,177

2.68%

03/01/2007 – 3/10/2008

My first reaction was to spend a few minutes simply looking at the table provided and thinking about what it meant. It was:

“So you’re going to split hairs between Medicare and Aetna over 0.05% while Medicare processes 10 times as many claims and almost 7 times as many claims as the next largest processor, UHC?

That’s something I call “reframing”, (redacted friend’s name), but I do appreciate the attempt.

Besides, statistically wouldn’t it be fair to assume that the processing of the largest number of claims would yield the greatest likelihood of more denials?”

What’s more telling on closer examination of the report card is that the commercial insurers are less efficient, less forthcoming with information, and more responsible for wasteful overhead than Medicare ever could be.

For example….

…CIGNA and Humana don’t even reveal the date they receive a claim (Metric 1)

…while Medicare’s median response time of 14 days (Metric 2) is among the longest, it’s no longer than CIGNA and only one day longer than Aetna and Humana

NOTE: The “median” means the middle value, or the value at which there are an equal number of values above and below the median value. Think highway median dividing two sides of the highway equally. The “mean” is the arithmetic average. Further review of the details of Metric 2 show the following mean values:

Aetna: 13.81 days

Medicare: 13.83 days

CIGNA: 19.57 days

Humana: 21.85 days

…the coup de grace seems to me to be “Metric 5 – Contracted payment rate adherence” defined as, “On what percentage of records does the payer’s allowed amount equal the contracted payment rate?”

Medicare is 98.12%. The next closest is Coventry at 86.74%. Humana is 84.20%, Aetna is 70.78% and CIGNA is 66.23%.

Now I’m no expert, but it looks to me like commercial insurers don’t seem to score very well at even paying what they contracted to pay. Some of them are getting what we called in school “failing grades.”

And some of us think the big, bad government can’t do things right? Please.

So if someone sends you something similar and wants to split hairs between Medicare and Aetna over 0.05% while Medicare processes 10 times as many claims as Aetna and almost 7 times as many claims as the next largest processor, UHC, then feel free to remind them that that is called “reframing the discussion.” It’s what people do when they want to cherry pick data, present it out of context, and without proper comparison to related data that forms the broader and more accurate picture.

Finally, the definition of “denial” seemed a bit unclear to me. I’m still not claiming to fully understand all of this but here is what it looks like to me.

Medicare’s top reason for denying a claim (27.8%) is, “Claim/service lacks information which is needed for adjudication.” Looks to me like something we call in the business world “cockpit error.” Someone in the health care provider’s office seems to have failed to fill out the form completely and/or correctly.

The carrier with the next highest percentage of denials, Aetna, has as it’s top reason for denying claims (65.7%), “Payment adjusted because the benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated.”

Again, I’m no expert but I’ve raised 2 kids, have power of attorney for my aging mother, and have reviewed my fair share of claims. I think what this means – 2/3 of all their denials – is that they have made their plans and the processing of claims so complex as to result in 2/3 of denials being essentially a duplicative claim. No need for reform there, right?

CIGNA’s top reason for denying claims (37.6%) is simply, “Deductible Amount.” Again, I wonder how it is that just over 1/3 of all the denials end up being this. Could it be that CIGNA’s plan definitions, processes, and claims processing are so confused and confusing that 1/3 of all denials are because the patient and health care provider claims administrator can’t tell that the claim is part of a deductible? I don’t know; just speculating.

So before anyone starts reframing the discussion and dissecting and distributing misleading or self-serving information, ask questions, do some homework, and challenge the assumptions and conclusions.

I’m on the record as supporting single payer. If this report card is any indication of how that might work under a government-run program, I’ll gladly pay higher taxes instead of insurance premiums to companies that have never proven and still can’t prove that they can do a better job.


“Everyone is entitled to his own opinion, but not his own facts.”
Daniel Patrick Moynihan