Monday, August 24, 2009

A Fresh Look

Ok folks, the few of you who follow this blog. Time for a fresh look. Nothing in the current debate on Healthcare reform is dealing with the real issues of our healthcare system. Our elected representatives, lobbyists and pundits are debating and fighting to keep or gain more power.

The heart of the problem with healthcare is NOT the care. It is the billing, the cost, and to some extent, the delivery of services and medicine. To cure this will take some honest debate on difficult subjects. In my own life, I fought and made an impact just on the universe that surrounded me and my family and what directly affected us and primarily, the care my wife received during her losing battle with cancer and the costs and payment structures that we encountered. Today, I am fighting similar fights with my own preventative healthcare. I was not informed that I would be charged for services from three different entities, even though I only visited one for a common procedure of a colonoscopy. It can be argued that I should have known better, but I was still not informed beforehand. I was only required to pay a 25% deposit on what I was told by St. Lukes Hospital as "the charge for the procedure". I have consequently received explanation of benefits from my insurance company alerting me that the doctor - Midwest Enterology and the anesthesiologist have also made claims with my insurance company. So, a procedure I was led to believe would cost me about $860 is likely going to see me writing checks for nearly $2500. And this should be higher as St. Luke's Hospital is standing by their original estimate but submitted the wrong code causing my insurance company to quote a lower price as the ceiling for which they would pay. But the EOB (explanation of benefits) later showed a corrected claim and that the insurance "covered" about $1800. This is to my benefit as I am not having to pay as much out of pocket as is being credited against my deductible. I want to be fair and with full disclosure on this. Since I carry a $5000 deductible, that means I am liable to pay all that applies for the first $5000 per year. My philosophy is that insurance is for those catastrophic events, not maintenance and I believe that we need to get away from having all services paid for some $15 or $30 copay and never realize just how high these costs really are. So I am prepared to cover that deductible if it happens. You don't buy auto insurance that covers cost of maintenance or minor repairs. But alas, I have seen solicitations for just such "insurance" labeled more aptly as extended, third party warranty policies. You pay a monthly premium in lieu of paying directly for repairs. It is also a likely bad financial deal. And the same goes for your home owners insurance. Does that pay for you new water heater? To paint regularly? No. Those policies expressly do not cover what should be regular maintenance or have been avoided with regular maintenance.

Why cannot the same be done for healthcare?

Now if you've followed this, you've certainly realized there are many problems on many levels. Insurance - why different coverage rates for the same procedure? It either costs what it costs or it doesn't.

Why are all these provider entities allowed to charge us when we have not met them ahead of time and certainly are never made aware of what each of their fees are going to be? Why cannot the facility that they work out of be the sole billing entity? Or.. why not the doctor's office providing the actual service bill me for those other services that are necessary to perform the procedure and they pay each of those entities they needed to contract with?

This is what I am championing and going to fight as best I can. And if I can get reasonable results for myself, I intend to evangelize this small victory and encourage others to also pursue this same quest. Or influence a St. Luke's or a doctor's group to reexamine this situation and consider changing or actually changing the way they do business.

On the insurance front, this is our real prohibitive cost to individuals and companies alike and the one area the government, the Democrats and the Obamas and Clintons see the most money and power. Insurance reform is what is needed first. Then provider cost and practices. Government takeover is not the answer though it can, admittedly, be part of the answer.

If we empower the individual as a healthcare consumer as we are informed consumers in almost all other areas of our lives, then change will sweep the land. All forms of insurance and retirement funds must be from the individual and end the practice of companies providing these benefits. Yes, a company could directly contribute to a health insurance account or a retirement account but it would be only in the employee's name and travel with them as jobs change or family circumstances change. The COBRA program is the epitome of government intervention forcing consumers to triple or more their cost of insurance. That program does not simply state that the former employee must now only cover the portion of the premium previously paid for by their former employer and that the insurance company cannot remove them from that group of insured, exclude or cancel their policy so long as payments are maintained and no premium cost added to the cost of those premiums. But the insurance companies successfully lobbied for the structure of COBRA and COBRA is completely unaffordable for anyone for more than a few months. Thus the program is forcing individuals off of the insurance roles and have greatly contributed to 47 million or more individuals not being insured.

Let's now look at insurance itself. An initial look at Health or Medical Savings Plans appear as an excellent program for individuals to begin to save toward self insurance or a large amount of invested funds to cover high deductibles and thus more affordable high deductible insurance policies. But this is not the case. You are limited to how much you can put into an HSA or MSA, you are required to carry a high deductible insurance policy to qualify to even have an HSA or MSA and the insurance company actually controls and has possession of the HSA and MSA funds. Its not your money. You leave them, you cannot recover those funds. You cannot state what medical costs gets paid from those funds. Again, government intervention set up by self serving lobbyists.

Has anyone thought about those "lifetime caps" on how much your insurance company will pay out over your lifetime? How about if health insurance, much like life insurance, was about purchasing a leveraged amount of money? And you decide what YOU wish for that fund to pay and what you wish to pay yourself? And that fund be transferable and tax free like many other assets to your family members? The amount necessary can easily be determined by most any actuary. It would be logical that a 60 year old might not use as much in healthcare over the rest of their life as a 20 year old might. But it is far from a simple linear equation. As we all know, the older we get, the more health problems we encounter and are likely to incur. But at 60, would I blow through $2 million dollars before I die? I seriously doubt it. That critical of an illness I would likely not survive before racking up $2 million in charges. But I'll keep an open mind if someone wants to prove otherwise to me.

Certainly a 20 year old has the potential for spending $2 million or perhaps even $5-15 million if one factors in gender and pregnancies, preventive care or family planning and the current abomination that is soaring healthcare costs if those costs continue unchecked for the next 60 years.

My current health insurance has a $5 million lifetime cap. American Republic Insurance keeps raising my montly premiums 12-18% every six months regardless of claim activity or the lack thereof and preventive care initiatives that I take to keep myself and my son healthy. Then, they deny coverage of those charges toward my deductible, even though they don't actually pay out any of those charges as they do not meet the threshold of my deductible and in keeping healthy, they likely will not have to pay out for that year. So, as my rates increase at about 3 to 4 times the rate of inflation and the rate of medical cost inflation, I still only have a finite amount of money available to me to use for future medical needs. Does this sound fair? It never has to me.

I would venture that I could literally purchase a policy on a set amount of money over a 10, 20, 30 or even 50 year period for an amount of premium per month and never have that premium change for the life of the policy. The amount of the premium can easily be determined by age, health status, lifestyle. And purchasing these types of policies would eliminate the notion of preexisting conditions. The cost of those conditions can be figured into how much should that policy amount be - $2 million? $5 million? $15 million? And the age and life expectancy of the consumer. Very simple.

In my quest to lower my insurance rates, Assurant (formerly Fortis) has a policy in which they provide a lifetime cap of $15 million. This sounds extravagant to me and too much to have to hold or have in reserve in some manner. I will discontinue pursing a new healthcare plan with them since they require me to give some stranger on the phone my bank account number AND routing number to "lock in the rate" until approval. Or I could give them my credit card. All the while they claim "I will not be charged until I sign an acceptance form". Damn right I won't. Nor will I ever give out that info till a company determines that I do qualify. Assurant informed me "we cannot run everybody through the approval process".

And thus you have the crime that is our insurance industry.

We as business owners have the right to turn away any business if we do not feel the risk is worth the effort. But we do not ask for a client's bank information until they request credit to be extended, not just to have the privilege of doing business with us.

I just believe there is a better way and one way is that more of us take control of our healthcare financing and begin to put the pressure on our providers and on the drug companies by shopping around when possible and by searching out and rewarding progressive, ethical insurance companies willing to provide a reasonable product for a long period of time. The one and two year policy model must come to an end. Providers must set up and publish their rates and not be allowed to mark up services substantially to cover costs for indigent healthcare when likely those costs are greatly exaggerated. To stop punishing those without health insurance but willing to pay for services at rate exhorbitant to those who have insurance or to those who abuse the system. We must also start insisting that everyone should prioritize good health and medical expenses up to 20% of their income for the fixed income or poorer of our neighbors rather than not paying anything or government paying the stipend for their care. Then the whole debate of those here legally or illegally would be moot. Not up the the provider to ask or know that. They just bill whomever comes through the door and expects them to pay or make payments. And for those who cannot afford these services, which would be most of us, allow providers to collect up to 20% of household income for such services. Then all are participating in the system, not just unbalancing it.

But then most things in life are the priorities to which we have chosen, not the priorities that are proper.

Some solutions for thought. If anyone has a contact or way they believe they could help inpact this revolution in insurance, please contact me via commenting to this post. Or if you know me, contact me directly or put people in touch with me. We start reform by affecting the world around us. Let's get on with the revolution!

Russ Wojtkiewicz

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