Insurance Screws Us: What a Surprise!

Talking about health issues is tough for anyone.  It is especially tough for me, for personal reasons.  I won't espouse about any recent goings-on, but I will lament the experience afterward.  I think that by and large, the medical community has changed from an entity that's purpose was to provide the best possible care to its patients, to a business that is more concerned with maintaining relationships with insurance companies, the government agencies that pay out claims, and the bottom line.  (Jesus, this is horrible.  But it's 3:30 A.M...) 

I am not an idiot, and I am perfectly aware that hospitals have to make a profit.  I am with them on that front.  I contend that the real problem is the insurance industry.  With the advent of medical insurance, costs have risen at a very healthy rate for many, many years.  While I find the entire concept flawed, I will play devil's advocate here for a second.  In theory, you pay an insurance premium every month as protection against some catastrophic illness or accident.  Should such a thing occur, you pay a deductible, and the insurance company pays the remainder.  In practice, it NEVER works this way.  In practice, you pay a premium that rises astronomically if you have ever been very ill/hurt, your deductible is an enormous amount, and the insurance company pays only X% of the costs.  The problem is that if you have to have heart surgery, and the cost of the operation is $225,000 and your deductible is $1000 (if you are lucky), your insurance will likely pay either 70/80% of the cost.  So what does that translate to?  How about $46,000 out of your pocket not accounting for any costs post-op.  I know that there are some people who can afford this, but the reality is that the vast majority of Americans cannot afford such things.  At this point, the person or family is left facing an unpayable medical debt either way.  What is the way out?  Bankruptcy.  Over 60% of U.S bankruptcies are attributable to medical debt.  Ask yourself what the real difference is between a $225,000 debt and a $45,000 one.  It's likely that you wouldn't be able to afford either one.

It gets worse too.  The people whom are all-too-happy to take our money are rather stingy when it comes time to pay out.  Consider the recent discovery that health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released yesterday by the staff of the Senate Commerce Committee.

At a committee hearing yesterday, three health-care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that do not cover needed care. Rockefeller said he was exploring "why consumers get such a raw deal from their insurance companies."

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don't trust the insurers.

"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health-care option," said Wendell Potter, who until early last year was vice president for corporate communications at the big insurer Cigna.

Potter said he worries "that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans."

Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter said.

The report released yesterday alleges that insurers have systematically underpaid for out-of-network care. The issue had been brought to light previously in litigation, committee hearings and other investigations, including a probe by New York Attorney General Andrew M. Cuomo. But as politicians and interests groups clash over the current effort to overhaul the nation's health-care system, it took on new relevance.

Cuomo described it last year as "a scheme by health insurers to defraud consumers by manipulating reimbursement rates."

Cuomo found that insurers under-reimbursed New York consumers by up to 28 percent, the report said.

Wash Post: Senate Hears of a Raw Deal