Friday, March 30, 2012

Community Rating for Health Insurance: the Way to Get to Better Health, Better Care, and Ultimately Lower Cost for Our Citizens

When I was studying for my master’s degree in medical care organization in the mid 1980s, one of the first things I was educated on was the different ways a group’s insurance rate could be calculated.

The notion of insurance is that everyone pays upfront for the protection, even though only some will need it during a given policy year. There are very few people that could afford to rebuild their house if it burned down. For this reason, we have homeowner’s insurance. The companies that sell the insurance have actuaries who calculate the probability of a house burning down and they set the rate for the entire community. No one would sell a policy to someone after the fire had already begun to burn. Happily, most people won’t lose their home to fire and they don’t resent buying insurance.

With health care it is different. Everyone will eventually get sick and consume health care. Some people believe that they could save enough money before they get sick to be able to pay out of their own funds when they eventually do need health care. Of course with the average cost of one hospital stay being in the vicinity of $10,000, very few Americans could actually pay from their own funds….and that would only be for the bill from the hospital for one stay.

So, most people want health insurance so that they are protected from financial ruin when they get sick. In America, all citizens over age 65 get Medicare. It is our elders, of course, who are at the highest risk of needing health care. In our public discourse about health care, I don’t hear many people saying that we should get rid of Medicare. We don’t have a choice to opt-out of Medicare. From our first paycheck as a young person, Medicare taxes are taken out. Most of us realize that this is worthwhile protection for us when we get older. This sure seems like “a mandate” from the government to me, “an individual”. People over 65 pay some out of pocket, but the majority of their health care bills are paid by the program. The costs are spread over the entire community of working Americans. This is a form of “community rating” and it has worked quite well since 1964.

But what about people under age 65, who find themselves with a disease? Before the Affordable Care Act (derogatorily called “Obamacare” by people who don’t like the act), if you had a “pre-existing condition”, in other words, you had a chronic disease before you applied for insurance, the insurance company could refuse to cover you or to use “experience rating”.  In experience rating, you could be charged a very high premium because you were already sick. Is this fair? What if you had just lost your job and while you were looking for a new one, you learned that you had breast cancer? What if you were a small business owner with 25 employees and your premiums were experience rated and two of your employees developed cancer?  Most Americans believe that this is not fair.

The Affordable Care Act eliminates this unfairness. It says that insurance companies can’t discriminate in setting higher rates because someone already has a disease. But, in order for this to work, the insurance company needs the healthy people to pay the same rate as the sick people, just like fire insurance companies need the payments of the people whose homes won’t burn down in a given year to pay to rebuild the ones that will. There must be an individual mandate for all Americans to have health insurance just like there is a mandate for us all to pay so that Medicare will cover us when we reach 65. I was a citizen of Massachusetts when Governor Romney introduced their law and I was proud of him for doing that. In Massachusetts now, almost everyone has health insurance and they don’t have to worry about not being able to get care or go bankrupt when they are sick. Hopefully, the Supreme Court will understand this logic, so average Americans in the other 49 states won’t have to worry.  


What do you think about ensuring that all Americans have health insurance?

Doctor’s Day

Today, National Doctors' Day is recognized across the United States. March 30th is a day to celebrate the contribution of physicians. The first Doctor's Day observance was March 30th, 1933 in Winder, Georgia.  Eudora Brown Almond, wife of Dr. Charles B. Almond, decided to set aside a day to honor physicians.  On March 30, 1958, a resolution recognizing Doctors' Day was adopted by the United States House of Representatives and in 1990, legislation was introduced in the House and Senate to establish a national Doctor's Day. Following overwhelming approval by the United States Senate and the House of Representatives, on October 30, 1990, President George Bush signed the bill designating March 30th as "National Doctor's Day."

We have a wonderful medical staff who do marvelous things. Every year we get laudatory comments about how much they mean to individual patients.  We can never lose sight of the wonderful contributions of our hard-working physicians and their dedication to those they serve. I am glad that at least one day a year we reach out and thank physicians for all of the things they do 365 days a year.

15 comments:

  1. At some point in time, all human beings will die. This is a irrefutable fact of our existence. Does this mean that the government has the right to give us an individual mandate to buy burial or life insurance? What of those that wish to be cremated, or those that wish to donate their body to science? Or even about the rights of atheists that have constitution freedom from religion to choose thier post-mortem care of their bodies? Food is necessary to all human beings whether in solid or liquid form. Do we now mandate what citizens of this country eat and consume because at some point we all become hungry?

    ReplyDelete
  2. Anonymous,

    You are paying one way or another for health care. Either you pay for it by buying insurance, or pay for it with higher taxes or health care costs. This covers those who don't have insurance but needed heath care and could not afford to pay for it.
    Most hospitals can't turn away a sick person who does not have insurance. Who gets stuck with the bill? Everyone! Hospital rates go up, insurance rates go up, etc. Therefore everyone should have insurance that is afforable, and the cost should be rated by a percentage of income.

    Enough said.

    ReplyDelete
    Replies
    1. Thanks, Anonymous. You get it. We are already paying for the care of the uninsured when they get sick.

      Delete
  3. Based on your philosophy Anonymous, we are paying for services that we may never need, such as fire or police. Fire and police do not turn people in need away either. Therefore the government should mandate that everyone apply to be a fireman or policeman. Or, everyone should have lucrative jobs, good shelter, nutritious food. Should the government provide this based on a percentage of income? Where does government intrustion stop Anonymous? When the government tells us how to live our lives from cradle to grave?

    ReplyDelete
    Replies
    1. How would you pay for the care of people who get sick but have no insurance and don't have $10,000 to pay the bill?

      Delete
  4. After reading this blog I felt compelled to comment. First I don't want to come off as anti health reform as something should've been worked out to get coverage for those that need health insurance. However, it shouldn't of been done the way it was with everyone elses coverage getting screwed up. This sham of a 2000 plus page bill was passed without being read and if this bill is so good why don't the Congress, the President, and labor unions have to take this and why have so many waivers been granted? Also, I'd like to know what a tax on gold in this bill has to do with healthcare. It seems that this bill was passed to punish wealthy people and redistribute wealth. Everything the government touches turns to garbage. The Post Office is broke, Amtrak is broke. This will cost 3 times the estimate and bankrupt this country. I know some children have conditions or are chronically ill and they should be taken care of by the state. But for kids to be on their parents plan until 26? As comedian Dennis Miller once said on the O'Reilly Factor some of these kids need to "Buck Up" and start living as adults. It seems that the government keeps trying to make our kids into either a sissy or wimp. Also the IRS will be enforcing this and they can't even get our taxes right. Also, patient privacy will be gone with the government having access to patient records. The "Affordable" Care Act has caused the cost of a nasal spray that my mother needs to go from $25 to $80. A bunch of people I know including my parents call this bill Obamacare and it's meant to be a slight as their premiums have skyrocketed and they feel that their perfectly fine healthcare was ruined. A lot of members of Congress who voted for this were shown the door in late 2010. The government can't force a person to buy something. If one is forced to buy healthcare, what's next? Will we be mandated to buy a GM car because they're owned by the government?

    ReplyDelete
    Replies
    1. What part of your coverage got screwed up because of the act? What was it in the act that made your Mother's medicine cost go up?

      Can the government force you to pay for defense? Water purification? Schools? Police? Traffic lights? We get all of these because we agree that if we share in their costs, we are better off. Do you think health care is different? If someone gets sick and they can't pay would you let them die? Should I have the right to make a lot of money, not buy health insurance, and then buy it only when I get sick? What do you think that does to the small business owner's cost of health insurance for his or her employees?

      Delete
  5. I could not have stated it any better. This bill was passed used controversial budget measures that should have not been approved in the first place. In the second place, it got zero bipartisan votes in the senate. Lastly, the budget gimmick of 10 years of collecting tax revenue and only providing 6 years of service has been exposed by the cbo and as a result the cost of this bill has been tripled, and without yet factoring in the administration cost. I also believe that Dennis Miller made the quote, "I am more than willing to help the hopeless, however I am not obliged to help the clueless."

    ReplyDelete
    Replies
    1. What would you do to lower the cost of health care in our country? We are now up to 17% of GDP and our system is not meeting Americans' needs and many employers can't afford to buy it for their people. I will also direct my basic question to you: If a person gets sick, has no insurance, and does not have the $10,000 to pay to get care, what would you do?

      Delete
  6. When anybody involved with our government, especially this administration talks about healthcare or any kind of care....Look Out! These people don't care about anybody but themselves. What they want is not health care, they want health control. They want to control our health so they can be sure that none of us live long enough to collect that social security they steal from us every week and spend every year. The healthcare law is a huge mistake. Have you been to the DMV? The government can't run anything. I hope and pray Obama loses the election. Remember Pelosi's statement: We have to pass the law in order to find out what's in it. Idiots!

    ReplyDelete
    Replies
    1. What part of the Affordable Care Act has the government running health care? The Act attempts to make private health insurance more affordable to everyone by making everyone have health insurance and thereby lowering premiums for people with chronic disease. It also prohibits insurance companies from telling you that you can't get insurance because you are already sick. What part of the Act has the government running the health care system?

      Delete
  7. Implementation of ObamaCare, right or wrong, should be decided by the people not government. The last I heard the majority of Americans are against this plan. I'm not saying something doesn't need to be done but it needs to be done with the approval of the people. This is not an easy task but if Americans don't want this plan then the Government needs to keep working on an acceptable plan.

    ReplyDelete
  8. I would like for you to answer a basic general question. What would you do if a person drops out of high school, gets fired for negligence at his job, and then gets caught stealing? Would you give them a job, a car, a house, and other posessions because their decisions were not wise?

    ReplyDelete
  9. It is also odd that you mention Romney and the state he governed, but conveniently left out the fact that Obama sent billions of aid to that state before the healthcare law was voted on. If that state is going bankrupt, what will the rest of the country suffer likewise?

    ReplyDelete
  10. I have read this write-up and so it is really good
    post. I plan to check out even more things about this writing!
    I propose that you should create more article content relating to this post.
    Also visit my web page ; Irritable Bowel Syndrome Treatment

    ReplyDelete

Thank you for taking time to read "A Healthy Dialogue" and for commenting on the blog. Comments are an important part of the public dialogue and help facilitate conversation. All comments are reviewed before posting to ensure posts are not off-topic, do not violate patient confidentiality, and are civil. Differing opinions are welcome as long as the tone is respectful.