I was reading rdquinn’s blog the other day bemoaning the fact that should the Supreme Court rule against Obama’s ACA, the part about the federal government’s subsidy to “poor” people’s insurance rates, those same people would not be able to obtain health insurance because of its cost and thus would be denied health care. There was also a blunt trauma reference to mean republicans who caused this case to come before the court. Well, oh woe is us, I suppose if those misguided justices don’t support social justice regardless of constitutional law. After all, what’s law for if one can’t bend it into pretzels at will just to suit one’s purposes.
Let’s take a look at health care for a moment. In the past if one broke his arm one went to the local family doctor and the MD set the bones and placed the arm in a splint. Usually two or three X-Rays were taken before the doc set the bones and maybe a couple after that just to make sure it was done right. That was the standard of care back in the fifties when I broke my arm at the age of seven. If the doctor didn’t have his own X-Ray machine, these things were expensive back then, then he took you over to the local hospital where he had privileges, that is the right given by the hospital for him to treat you in that hospital’s facility, and the X-Rays were taken there. One paid the family doctor for his services and if a hospital was involved, one paid the hospital for its services. Of course you could have gone straight to a hospital and would have been seen by a resident doctor, one who works for and is paid by the hospital. Then the bill from the hospital would have included the resident’s services (although the resident was paid by the month and not by the procedure). One may have had some “insurance plan” to cover the expense of medical care. Now be careful because “insurance” in this form, while still about risk to the individual, is not exactly the same as a term life insurance policy. The risk in both plans is about the use of that policy. Both depend upon “pools” of policy holders and the risk that each policy holder will use that insurance. For the term life policy we know that we are going to use that policy one day. Everyone dies, sooner or later, and the bet for the insurance company is that you will die much later. The bet for the insured is that they die much earlier. If the term coverage is for twenty years and the insured lives beyond that time, the insurance company wins the entire pot. The monthly or yearly payments are placed into an account and then invested to earn a profit for the company. If the plan pays $10,000 for your life if you die within that twenty year period of coverage then the longer you live the more you have paid for that settlement. If on the last day of that 20 year term you die, you will have paid for your settlement in full.
On the other hand, medical insurance, while based on pools of the insured, doesn’t have that same end goal. Never go to the doctor a day in your life and get all your premiums back when you die is not how that business works. Each year you pay the fees according to how much the average pool member uses the “insured” medical payments. If one is diabetic you better believe that you can’t afford the insurance since the fees from medical procedures will run up very quickly. Being a diabetic is a very expensive business, especially when you need the dialysis several times a week. Just as life insurance, auto insurance, and home insurance has various risk pools, from very low to very high, so does medical insurance. In a way, for medical treatment, one is prepaying that treatment by paying insurance premium. We know you will use some medical care in any given year, the question is how much. Now back to the hospitals and health care givers.
Today if I broke my arm the family doctor my well be a resident of the hospital and I would go to the emergency room instead of his office. Emergency room care is much more expensive that seeing a private doctor in his own office. But with the excessively hich cost of medical school and the quarter million dollars or more of student loans to obtain that MD, very few individuals can establish a private practice let alone keep one going. So chances are you are going to see a resident of a hospital or group partnership. The difference for a group partnership is how the money is split between the partners. So now I have a broken arm and perhaps I was stupid enough or happened to be in an auto accident and had no choice but to be taken to the hospital in an ambulance. A ride in an ambulance is very expensive, usually several hundred dollars one way. You have chest pains and walk into one of those mini-emergency clinics, you will be put into an ambulance and hauled to the local hospital. Those doctors are not “certified” to do anything for your chest pains. It is also a matter of liability, they don’t want to be sued. Well, me and my broken arm are in the emergency room and they will take X-Rays since those photos show bone very well, An X-Ray is not so good with soft tissue, so many problems with soft tissue will not show up well in an X-Ray. But surprise, surprise, I also get an MRI. Why? MRIs are very good with soft tissue but not too good with bone. A doctor will never use one to set a bone. So why have one when they cost at least $2000 a piece? Ah, the new standard of care. Throw in any and all procedures to show that there was a very high standard of care in case of lawsuits. Oh yes, the real reason? Medical equipment is very expensive. There are only a few makers of MRI and digital X-Ray machines and all the other equipment out there. Sonogram machines, monitors, the whole nine yards. These are capital equipment items. A gross of band-aides is an expense item, very cheap until the patient has to pay for one, then he might believe that band-aides are a capital tool. Aspirin cost five bucks apiece and the practical nurse who “administers” them, well that charge will show up as quite pricey for someone who is making five dollars over minimum wage. And whether you take the aspirin or not, you will pay for them and the administering. No, all that capital equipment must be used and all residents and all doctors with hospital privileges will prescribe their use. Then there are all the little laboratory tests that are also prescribed, many of which are not needed. Why would I need a number of blood tests if all I have is a broken arm? The hospital wants the income. Then there are charges for the technicians who do the lab work and the drawing of blood. And don’t forget those specialists who read the X-Rays and MRIs. And maybe a bone specialist was consulted, you know, that doctor who never came near you but now you get his bill. And don’t even bother to ask the billing clerks what the fees are, they won’t tell you. If they did they would be fired on the spot. We’ll have to submit the bill to your insurance company and what they don’t pay will be your portion.
Are you starting to smell a rat? Good, because health care is one great big grade A monopoly and Congress made it legal. One of the good things about having Medicare is that I get to see what the doctors, clinics, and hospitals charge for their services. Medicare has set procedures they will pay for and set amounts. The amount per procedure will vary from city to city and state to state. So when Medicare says it pays only 80% of that fee, it could be fifty dollars in one city and a hundred in another. You, the holder of your Medicare card, get to pay the other 20%. Even if the free charges is twice what Medicare will allow, you are not responsible beyond that set fee. Hey, not bad, right? Well, that is on fees that Medicare will approve. For those charged but disallowed by Medicare, meaning they won’t pay anything, you, the patient, must pay for. Oh, no one told me that. Have blood draw and sent to a laboratory? I have been charged for the transportation of that sample from Fort Worth to Atlanta. Say what? Medicare wouldn’t pay for it but I had to, my responsibility and guess what, never disclosed before treatment. Think about it. You buy an auto and the things works for years without trouble. Not there is some problem and you take it to the dealer or mechanic. They must, by law, give you a written estimate of the work to be done. That law doesn’t apply to any health care providers. Hey doc, I don’t feel so well. Let me put you up on the rack and see how much money I can pull out of your wallet.
Now back to insurance companies. One would think, by the way, that the health care providers would know exactly what Medicare will pay for and only charge that amount. And one would be wrong, very wrong. The doctors and hospitals and clinics and everyone else in the system over charge like crazy. One would think that price discovery as described in economic textbooks would have made that point to health care. Your insurance company just doesn’t pass on the fees to you, unchallenged. The coders in the back rooms of the health care providers know what Humana and Blue Cross will pay, but they still sent the higher amounts. The insurance company receives your premium as a source of income. This type of insurance is slightly about risk. If one works in construction, one’s health care insurance premiums reflect the hazards of the job and reflect the increase use of health care by that pool of workers. If everyone in your company sits at a desk, then your premium is based on that health care usage. I could say that it is all about average usage but that is far too simplistic a description for actuarial work. So why the over charge? Thanks to Congress, all emergency rooms had to treat anyone who came into its lobby regardless of ability to pay for services rendered. That broke the back of many hospitals financially. So a great many hospital emergency rooms have closed. But congress decided to give hospitals a break and by extension, many other providers. Those over chargers, what insurers don’t pay, are written off as bad debt, noncollectable debt. So if you are a for profit hospital, that lowers your taxable income. And if you are a NFP or not for profit health care giver, then the Federal and even some state governments give you that money. Talk about a license to steal. I wish I could have made up noncollectable debt and had the IRS give me money.
Well, that is not the end of the tale. For as Mr rdquinn doesn’t seem to know, having a medical insurance policy does not protect you from the excessively high cost of health care. So you work for a company that has great medical coverage. Better check your policy very closely for there are exclusions to what is covered. If you are diabetic that policy may not cover dialysis and that is a big expense. Then they is the deductible. Each year my Medicare deductible must be met and that is $300. After I meet that, and that is for allowed procedures only, thank you, then they will pay their 80%. There are also co-pays. If you want a policy that doesn’t have co-pays, then you will pay a very high premium. The less out of pocket up front the higher the premium. Remember, that premium is not insurance but prepayment for services that you may or may not use. That is what medical insurance is, not a free lunch. If you don’t use any health care this year the insurance company pockets that premium money. Medical insurance is a use it or lose it proposition. And if you don’t buy the medical insurance then when you do use healthcare you may be charged those extremely excessive fees. Does health care stink to high heaven about now? Your so-called right to health care depends on your ability to pay and god, we will make your pay.
Well, wasn’t the ACA suppose to make health care affordable? Oh surely you don’t believe in the Tooth Fairy or the Easter Rabbit, do you? Health care costs have risen 15% this year from last. Where are the savings? On yes, electronic medical records will bring down the price. Not in a monopoly, you idiots. All that has happened is that the AC tries to put everyone into the same payer pool regardless of health risks or prior usage. That was the whole point of Hillary Care under Clinton. A single payer system that raised the rates on those with an income over a set lever so that free care would be provided for those without an income or lower income. But it never controlled costs. The ACA does not control costs. So if the Supreme Court rules against the ACA on the federal subsidy, all that means is that is that the poor will have to find their own means of paying for those already rock bottom rates with all the exclusions and deductibles and co-pays. But if they go to the emergency room they won’t have to pay, will they? The ACA is a wealth shifting device to take money out of the pockets of the middle class and put it in the pockets of the working poor. The rich don’t care, what’s ten thousand dollar medical insurance policy to a millionaire or a billionaire? Hell, that’s not even chicken feed or spare change.
So what should we be doing instead of blaming the Supreme Court and republicans? Kicking the collective ass of Congress to restore Health car’s status as a business subject to anti monopoly laws and deceptive practices. Take the manufactures of medical equipment behind the wood shed and spank their collective behinds raw. We must restore rule of law in this country, not bend it into pretzel shapes to suit our whims. Screw this progressive liberal propaganda that everyone is owed a living and big government is our best friend. America is starting to give Nazi Germany a good name.