Insurance

Back when I was in the corporate world I didn’t worry about insurance. Someone in the organization was responsible for that and for making sure that we had it. I was paying for it in some sense, but since I never had to actually stroke a check for it, it just wasn’t something that I needed to concern myself with.

When we left that world and entered this one, insurance became something we had to take care of ourselves. We were able to find a policy that made sense for us. We chose a high deductible catastrophic coverage policy. Our philosophy is that insurance should only be to take the care of things we could not afford to pay for without it. We do not believe insurance should be used to pay for routine doctor visits, pharmaceuticals and the like. Insurance should be a safety net, something to step into if a health problem comes along that would otherwise bankrupt you. In fact, I believe it is the separation of the provider and the patient that has caused the runaway increase in medical care costs. If medical care itself was affordable, then health insurance wouldn’t matter so much.  But because almost all health-care expenses are paid for by third parties, it is not necessary for the provider to price services at a level the patient can afford to pay. Instead, they’re priced at whatever price they can get away with charging an insurance company or the government.

We were satisfied with our policy. We do our best to avoid any medical expenses, concentrating on preventative medicine and healthy living. We can afford the normal medical expenses we could reasonably expect in a year.  In the event of a “catastrophe” our insurance is there to protect us.

Under the new law we will no longer be allowed to have this coverage after this year. The new law allows only people under thirty years old to have catastrophic health insurance. Even though we don’t need a policy with a lower deductible, we are being forced to buy one.  As best I can tell, the reason for this is that the insurance companies need to collect as much premium as they can from healthy people, to offset the additional cost they are going to incur from the elimination of their ability to deny coverage to those with pre-existing conditions and the like. So we will be forced to pay for insurance we don’t want, or need. This might be less offensive if we were being taxed to pay for the medical care of those who can’t afford it. Being forced to contribute to the profits of an insurance company, however, does not sit so well with me.

Even though we are allowed to stay with our existing policy for this year, we decided to go test the “market place” on healthcare.gov. What we found was that the only insurance available to us would be considerably more expensive than what we have now, and that we are ineligible for “subsidies” (which we neither want nor need in any event), despite having very low income. That made no sense to me. Later I went back to the website and tried again. This time I got the equally startling response that we could get a policy with a zero deductible and zero premium – in other words, totally “free” medical care (the government would send payment directly to the insurer). Still puzzled by all this, we went back and entered our information a third time, and got a completely different set of results, this time again being told we are ineligible for “subsidies,” but being given an entirely different list of options and premiums, higher than what we’re paying now, but not as dramatically so as the first time we checked. Needless to say, our experience has not engendered great confidence in this system.

Our son’s experience has been equally maddening. Insurance is available through his employer, but it is too expensive for him to afford at his entry-level income. Because insurance is available through his employer, however, he and his family are not eligible for “subsidies” nor can he afford the policies in the “marketplace.” They are still struggling to figure out what they will do. It is possible they will, like many others, just pay the “penalty” they will be assessed for not buying a policy of insurance they cannot afford.  And they’ll still be uninsured.

I have found it very difficult to have any meaningful and intelligent discussions about this. The subject immediately draws out impassioned nonsense from the partisan fringes:  Obamaphobes who insist that he is a secret Muslim who is not an American citizen and who is plotting to take away our guns, and their counterparts who lambast “teapartiers” who would rather see poor people die than to pay their fair share of taxes. Even the partisans who are more nuanced and less ad-hominem in their responses usually just parrot back whatever talking points are currently being broadcast on their party- sponsored media. For one side the problems with the new law are cheerfully welcomed as more ammunition to use against their hated enemy, while for the other any criticism of the new law is tantamount to enlisting in the Tea Party.  People who are both informed and objective about this are as rare as hen’s teeth.

I believe I should have the freedom to make my own decisions about insurance, including choosing to go without insurance if I think that makes sense. I realize, of course, that creates the likelihood of “free riders” who can afford insurance but choose not to buy it, then later have catastrophic medical expenses the cost of which have to borne by others. I remember during the 2008 Republican primaries hearing Mitt Romney explaining why he felt it was necessary that all persons who can afford health insurance be forced to buy it. It was his Massachusetts program that pioneered the notion of government-mandated purchases of private health insurance. I understand the reasoning, but it still doesn’t sit well with me.

I realize the alternatives are not particularly attractive either. In a totally “free market” system of medical care, poor people will suffer. We’ve seen this at its extreme in Haiti, where people must pay upfront in cash for every step of medical attention they receive. For example, if a person takes a child with a severe cut to the clinic, before the physician will look at the wound he must be paid a fee, in cash. Then, if it is necessary to disinfect the wound, they must be paid upfront in cash for the disinfectant. Likewise for the stitches, and then the bandages. If the person runs out of money at any step along the way, the medical attention stops. It stops even if it means the patient will die. And they often do.

I’ve seen the other end of the spectrum in Israel. There, going to the doctor is like going to the library here. Medical facilities are government-owned and run, and the cost of medical care is covered in a person’s taxes. An Israeli friend of mine was astonished to learn that Americans have to pay out of pocket for medical care. Although private insurance and medical facilities are now available in Israel, when I was last there they were rare and considered to be something of an oddity (by my friends at least). In such a system, private medical care would be analogous to private schools here–whereas our taxes fund public schools, persons who can afford it always have the option to send their children to private schools instead.

I’ve rambled long enough about this. Hopefully over time the kinks in this new system will be ironed out so that it is not as messed up as it is now. I imagine the rollout of Medicare and Medicaid were probably equally messy, and those are now entrenched political sacred cows that are here to stay, which is probably for the best.

I do think it is unfortunate that we devote so much of our energy and resources to treating illnesses (and forcing citizens to pay for the treatment of illnesses) that are the consequences of voluntary lifestyle decisions. Under the new law the only thing insurers are allowed to ask is whether or not the insured is a smoker. Insurance companies are still allowed to discriminate based on tobacco use (which seems entirely reasonable and appropriate, as it certainly affects the risk they are assuming). But Cherie did some research and found that the cost of medical care resulting from obesity is greater than the cost of medical care resulting from tobacco use. As a society we have made the decision to create formidable financial disincentives to one, but not to the other.

Amidst all the angst and tumult associated with the new law, the bottom line remains that the best thing people can do to protect their health is not to buy insurance and contribute to the profits of some mega-corporation, but rather to exercise and to eat a nutritious diet, in moderation.

As Hippocrates said thousands of years ago, let thy food by thy medicine and thy medicine be thy food.

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20 comments on “Insurance

  1. El Guapo says:

    As an insulin dependent diabetic, I need affordable access to medication and drugs regularly. I can’t go without insurance.

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    • Bill says:

      We’ve always carried insurance and I’d never recommend anyone go without it. No matter how carefully people try to protect their health, there are plenty of things that could happen creating medical bills that no ordinary person could pay without insurance.

      For self-employed people it’s hard to be able to afford insurance. And the system discriminates against people without it. Providers usually charge much higher prices to those paying out of pocket (versus with insurance). It’s a mess. In farm families someone usually has to take an off-farm job just to get “benefits.”

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  2. DM says:

    I’m in neither camp, we’ve approached the insurance issue pretty much like you, and as a self employed carpenter, between the health insurance and medical expenses constitute more than 1/2 of our annual expenses..(and we’re both healthy) My wife has a cousin who is a family Doctor. He finally had enough of the system and opened up a private cash/ pay as you go clinic. As his wife explained it, when you go to those large clinics, you are paying for that fancy fountain in the lobby, and all the other expenses that have nothing to do with your visit to the Dr.

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    • Bill says:

      Cherie’s doctor is “cash only” and doesn’t take insurance. I think we’ll see more and more of that as physicians get tired of the expense and hassle of dealing with insurance companies.

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  3. This is an excellent look at this issue. I try not to be livid at the repercussions of this, but I feel the American people have been duped, and unless this leads to single payer, we are in for a terrible time and it will be just an addition on the road to our decline as a nation. For the record, I strongly supported Obama and still do when he makes good decisions … haven’t seen as many of those as I’d like …

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    • Bill says:

      It seems to me to be the worst of both worlds. Single-payer, as bad as that would be, is preferable to this, imho. It seems crazy to me to have the government pay for health insurance, rather than health care. How does that benefit anyone other than shareholders of insurance companies?

      I think the vast majority of people have no idea how bad this is, at least so far. And many of those who are pontificating about it (around here at least) are clueless, as they’re either covered by Medicare or getting insurance through their employer.

      I suppose this is actually helping some people, but we can’t figure out how.

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  4. Jeff says:

    The best way to understand Obama’s “health care” law is to realize that it was written by the insurance industry. It is not “health care” – it is “health insurance” – for the benefit of the insurance companies. I realize that I harp about capitalism all the time in my comments, but this is exactly the result that occurs in a capitalist economic system. The difference this time is that the government is actively partnering with capitalists instead of supporting them behind-the-scenes, so to speak, with legal initiatives that support capitalism. There can no longer be any excuse for everyone to see that the capitalists are firmly in control (not that their control has ever been seriously threatened) and that the government is not here to serve us, but to serve capitalists. I voted for Obama in 2008 but I’ll never vote for him or any other presidential candidate ever again. Unless we get an anti-capitalist candidate, which is exceedingly unlikely.

    All this garbage about a “free market” is exactly that – garbage. Rotten, smelly garbage. There never has been and there never will be a “free market”. Government exists to enforce the dictates of the capitalists. Read your history. Sure, there are some clever cover stories that the capitalists come up with from time to time (Gulf of Tonkin, Weapons of Mass Destruction, Terrorists, Drug War, NAFTA, TSA, etc., etc., etc, ad infinitum) but the people, gullible as they are, swallow them in their entirety, to the benefit of the capitalists. It is truly amazing to watch.

    The reason we don’t have single-payer is because we live in a capitalist society. Medicare is single-payer, but look for more and more restrictions on it as time goes on. Obamacare is the first shot across the bows of Medicare with Social Security in the line of fire, too.

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    • Bill says:

      I’m convinced that the over-utilization of insurance is a major cause of the skyrocketing cost of medical care. While everything else gets more and more expensive, something like lasik surgery (which isn’t covered by insurance or paid for by the government) gets less expensive and better. Funneling tax dollars to insurance companies and calling that “health care” is just nuts and will only make things worse. Maybe–hopefully–I’m wrong about that, but this thing just likes like a trainwreck to me.

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  5. joelwitwer says:

    I’m no healthcare or insurance expert and, being young enough to still be under my parent’s insurance, I can’t speak from any experience, but I’ve been intrigued by the idea of christian health cost sharing ministries like http://www.chministries.org/

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    • Bill says:

      A friend of mine participates in one of those. Jonathan Wilson-Hartgrove advocates them in his book “God’s Economy.” I haven’t researched it but I’m not sure those kinds of plans are going to be legal anymore.

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      • joelwitwer says:

        That was my first thought as well, but their website, in their FAQs, claims “Anyone who is a member of a health cost sharing ministry is exempted from penalty under the national health care bill (Affordable Care Act) signed into law on March 23, 2010. Christian Healthcare Ministries meets each of the qualifications set forth for health cost sharing ministries in the U.S. health care legislation. The U.S. Supreme Court ruling on June 28, 2012, does not alter CHM members’ ability to meet each other’s health care costs. The ministry will continue to provide affordable, quality health cost sharing support.”

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      • Bill says:

        That’s good. I seem to recall reading that the Amish are exempt as well.

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  6. Bill, being around for many decades and have seen how the government handles money, I just knew that some thing with this huge amount of change so quickly such as this healthcare law was going to be a big mess for many years until they figured out what really works and what doesn’t. I truly believe when the health system became a business for profit is when the whole situation started getting out of hand. I dealt with hospitals and doctors for 23 years during my second wife’s heath issues. She was in and out of the hospital several times a year with a sabbatical of five years in the middle. My familiarity is between 1978 and 2001. In the beginning hospitals were willing to work with us and allow for the hardships we were living through but as years passed things became more and more difficult to work out. My wife died in 2001 and there was no medical contact until her mother (my mother in law) ended up in the hospital with type II diabetes. The bill for one over night stay was an astounding $6,000 with other bills from the doctors, ambulance services, and lab services brought the total to $10,000. My mother in law is 87 years old with social security income of a hair over $700. We applied for Medicad which took over four months to be approved. In the mean time the hospitals after one month turned every thing over to the ravaging bill collectors.

    Hospitals are not their own entity any more. They are owned by corporations that are only interested in profit. In my humble opinion, that is how we got into this mess. When healthcare became a for profit business, the slide has been ever downward.

    Have a great and healthy day.

    P.S. I can’t wait to see the bill for my appendicitis surgery I had on January 2nd. Yeah, nice way to start the new year.

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    • Bill says:

      It’s completely out of control Dave. It’s become nearly impossible for normal human beings to afford medical care. Instead of finding ways to bring those costs down, we just look for ways to transfer them to someone else, causing them to rise even more. What a mess.

      Very sorry to hear about your appendicitis. Yikes. Happy New Year indeed. I hope you’re recovering well. At least it happened in the winter, so it didn’t interfere with gardening. 🙂

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  7. Leigh says:

    We’ve not had medical insurance for years because we can’t afford it. Now with the new laws the cost has skyrocketed making it less affordable than before. It’s way cheaper to simply take the penalty.

    That shocks people and they come back with “but what if….” Perhaps I might agree if I hadn’t had so many years of fighting with insurance companies to get even a measly portion of what I paid into it.

    30 years ago I was an RN in both hospital and doctors office. “The rising cost of health care” was always a huge issue. As long as companies are allowed to profit from it, the cost will always rise because with human nature enough is never enough. Insurance companies are not selling a service, they’re making a profit. If folks get a sense of security from having insurance, then that is something at least.

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    • Bill says:

      Thanks for the great comment Leigh. It seems to me that the greatest obstacles to the homesteading life we aspire to (and which you model so wonderfully) are property taxes and health insurance. It’s just not possible to afford those while living off what the land offers. Sometimes when I’m fretting about this I think about Wendell Berry’s character Burley Coulter, and what he might have thought about being required to buy health insurance. I’m near the point of telling them to go rip off someone else, and that I’ll just take my chances.

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  8. shoreacres says:

    As your original post and the comments indicate, this is terribly complex. I do have a few comments, just from personal experience.

    When I started my business, I began with no insurance (6 Years). Then,I found a BC/BS plan. My premiums began at $175/month, and then climbed by increments. I changed providers a couple of times, but when premiums hit $500/mo, I opted out. I had seven years left until I was Medicare eligible. Once I went on Medicare, I was able to afford the supplemental policy ($172/month, BC/BS) and here we are.

    In those first years without insurance, I needed a hysterectomy. The surgeon was a laser specialist, so I’d need only one night in the hospital. He also happened to be a customer, and we ended up bartering – a year’s worth of varnish maintenance on his boat for the surgeon’s fees.

    That left the hospital bill – $6K. When I said that I had no insurance, the business office person said, “Well, can you pay cash?” When I got done laughing, I said there was no way. Then she explained that credit would be the same as cash, so if I could put it on a credit card, my total bill would be….. $1500.

    I remembered that lesson. Before dropping my insurance the second time, I went around and got cash prices for various things: office visits, MRIs, ER visits, and so on. I figured out that if I set aside a premium equivalent every month, I could cover about anything that happened out of pocket. I was lucky, and it worked.

    Now, as to the current situation… I cared for my mother for fifteen years, and got to know the Medicare system pretty well. I’ve been on Medicare for nearly three years.Every year I go in for a physical, and once I went on Medicare it worked just like it did for Mom. I’d see the doctor, get a going over, get basic blood work done, do anything extra like a bone scan, and trip on down the road.

    Last week, I went in for my yearly physical. The first thing I got was a piece of paper telling me I would not be seeing the doctor. I would see a nurse practitioner. The reason? Medicare no longer pays for a doctor’s visit for a yearly exam. If you want to see a doctor, you make another appointment.

    I’d heard rumors, and had specifically asked who I’d be seeing. I was told “the doctor”. When I raised a gentle fuss about it at the office, I happened to let loose with something like “Well, so much for keeping my doctor.” The office person said (and I quote), “You can keep your doctor. You just can’t see him.”

    One more thing. Anything my secondary insurance doesn’t pay on my lab work is out of my pocket now. I have the paper right in front of me. Medicare no longer pays for lab tests associated with a yearly physical. I think it’s important to keep an eye on cholesteral, blood sugar and such, so I signed to accept financial responsibility. But again – it was explained to me that Medicare cuts had to be made in order to help fund Obamacare.

    We have a total mess on our hands, for everyone. And I’m beginning to think the people who’ve said the elderly are going to be seen as expendable may have a point. I’m going to eat more veggies and exercise more, that’s for sure. 😉

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    • Bill says:

      Wow. Your experience confirms a lot of what I’ve been thinking and your experience with Medicare is consistent with what Jeff said in his comment. We’re at our rope’s end with all this. I’ve yet to find a single person who has benefited from this. It seems that the only thing surer than the fact that the current system is a rotten failure is that the “new and improved” version is even worse.

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  9. I’m a Canuck, so come at this topic with a completely different perspective, not a very well informed one either, sad to say. I do know that our health care system is paid for with a combination of tax money and public health insurance. The public health insurance aspect is mandatory for most citizens, based on income level, and paid to our respective provincial health insurance corporation. This is a government “owned” corporation, what we call a crown corporation. So not private, which is what you apparently are having to deal with. I can totally see the issues that dealing with private insurance companies could raise.

    There is a comment above about the over-utilization of health insurance contributing to the increasing costs of medical care. That’s an interesting line of thought. I do know that here, one of things that troubles people about our system is that because visits to the doctor are “free” to the client (the doctor bills the provincial health insurance corporation, not the individual), people visit far too much. What’s happening now is that it is very difficult to get in to see one’s family GP on short notice – three weeks is quite normal for an appointment. Most of us now use drop in clinics, where you can wait hours to have your sore throat swabbed for possible strep. My own local clinic will often suggest that since their queue is so long, and we’re likely going to need an x-ray anyway (or a blood test, or whatever) that we go down to Emergency at the hospital, since the wait there is about the same. The obvious result is longer wait times in the ER, where really, speed is often of the essence.

    New Zealand, and probably other places too, have instituted a small per visit fee for a doctor’s appointment or clinic visit. They have a similar health insurance system to our own, so this fee is on top of that, and at something like $50 per visit, prorated for youth and children or those on social assistance. This helps to offset costs as well as acting as a deterrent for what are deemed “frivolous” visits. I can see room for the school of thought that says it’s unfair that those who work hard to not be on social assistance are being expected to pay for those who have not, but the fact is that every population has some people who will always need help from others. As here, emergency treatment is paid for by the system.

    Obviously, having lived all my life with a completely socialize medical care system, and being fairly well satisfied with it, it’s hard for me to see why you wouldn’t want the same. But I’m aware that our system has a lot of faults too, and that when it was first brought it, there were a lot of unhappy people. ‘Twas ever thus. I sure hope some reason is brought to bear in your own situation.

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    • Bill says:

      I’m glad you commented. It’s good to have a Canadian perspective. I think we in the States have it in our DNA to distrust government and to resist turning any more of our lives over to it than we absolutely must. That may be contributing to our current mess. We’ve come to fully accept socialized education, Medicare, Social Security and many other such things. Over time we’ll get used to this too I suppose. It just seems to me that forcing people to buy private insurance is a wrongheaded way to address the issue.

      My thought is that without the market discipline that comes from sellers having to match their prices with what buyers are willing and able to pay, the sellers will naturally raise their prices (given that extraordinarily deep pockets of the 3rd party payors).

      I have no idea what the solution to the mess is beyond my mantra of trying our best to stay healthy and avoid dependence upon the medical system.

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