Why Are People with Health Insurance Going Bankrupt?

Paul Jay of the Real News Network interviews Dr. Margaret Flowers, a pediatrician from Baltimore who advocates for a national single payer health system, Medicare for all, and Kevin Zeese, co-director of It’s Our Economy, an organization that advocates for democratizing the economy. Originally published at Real News Network.

Both Zeese and Flowers are long-time activists; I remember when Dr. Flowers got herself arrested in Max “Train Wreck” Baucus’s Senate hearing room because he’d scheduled no testimony from single payer advocates; and here they both say some things on health insurance and ObamaCare that are new to me.

First, health insurance companies could actuallly be even more perfidious than I thought:

FLOWERS: [B]efore 2005, I think, looking at our Blue Cross program here. And what they found was that about one out of every five claims was denied just randomly. Like, if five claims come in, they just pull one out and say, we’re not paying this one. …

And we have evidence of this in New York from people that worked in these claims offices that if there was a certain level area of the city, lower-income area, they would deny those claims because they knew people didn’t have the resources to fight back.

Now, I’d like to see the study. However, Yves has written about her battles with her health insurance company, which “loses” her claims and then denies care, which fits into this picture. (Readers, have any of you had this experience?) And it sounds like the health insurance companies are acting just like the mortgage servicers who “lose” your paperwork, or even your check, and then foreclose on you.

Second, Obamacare’s Platinum/Gold/Silver/Loser Bronze plans are actually worse than the plans available already in some states:

ZEESE: [T]here’s several levels of insurance coverage [available under ObamaCare:] —90/10, where the insurance company pays 90 percent, consumer pays 10 percent; 80/20; 70/30; 60/40. The subsidy provided by Obamacare to people who can’t afford insurance will only cover 70/30 plans. So when you get a serious illness, you’re paying 30 percent of the cost of that health care.

Now, what’s really bad about this is that prior to Obamacare, some of the state insurance regulators were pushing insurance coverers to a higher level, where they would provide more coverage rather than less. Obamacare has now put it into law that 60/40 is okay and 70/30 is what the government will pay for. And so the 80/20 and 90/10’s become less common. So you’re going to see more and more people with under-insurance and not going to see lack of insurance completely go away.

Having to pay 30% for a really serious illness is “Lose your house” territory. Yikes! And maybe I’m old-fashioned, but when the Feds step in to set a standard, I tend to expect them to improve on what the states are doing, and not degrade the situation.

Not that all this matters very much; ObamaCare’s only projected to cover 7 million in its first year, 23% of the 30 million total optimists say it will cover (leaving 26 million uncovered). The mountains have labored and brought forth a mouse…

Finally, I’m finding color-coding Obama’s presser on the Affordable Care Act heavier going than I expected, so Flowers and Zeese can serve for a teaser.

NOTE Readers, I’ve been trying to track the IT issues behind the health insurance exchanges at the state and local level, which I believe prompted Baucus’s “train wreck” outburst. If any of you have linky goodness on this topic — or even direct knowledge of it — could you please leave your information in comments?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. mmckinl

    Obamacare is a replica of its’ namesake … a Trojan Horse. It is designed so that inevitably even companies that now provide healthcare will drop coverage and opt to put their employees in Obamacare to save money.

    The whole idea behind Obamacare is to privatize all coverage with inferior policies that guarantee healthy profits for Pharma and Health Insurers … The Public Option was never an option because it would have offered better coverage at lower cost.

    Right here at Naked Capitalism Yves has published two recent pieces on just how odious Obamacare is. The first was about how Congress was running,not walking,away from Obamacare for their own coverage … The send broke down the real costs and deductibles low wage earners will face …

  2. LifelongLib

    “when the Feds step in to set a standard, I tend to expect them to improve on what the states are doing…”

    I tend to be pro-federal government too, since it’s the only entity in the U.S. with the legal power, organization, and money to provide truly national programs. That said, its progressiveness relative to the states varies. Compared to the states of the old confederacy the federal government is generally more enlightened. Compared to (say) California (at least on that state’s better days) maybe not. Certainly on issues like medical marijuana and same-sex marriage the federal government has not led the way forward.

    1. banger

      I think we all remember in the Grapes of Wrath how the Joads finally found a bit of relief when they rolled into a government camp–they found compassionate people instead of relentless cruelty. I’ve worked in the federal gov’t on and off for most of my career as a consultant. I can tell you that it may not be the way to go. It is too large has too many contradictory and usually bad incentives (thanks to Congress), is dominated by the consultant industry (a deeply corrupting influence) and most offices are either wildly inefficient, filled with dead wood, involved in shady dealings (revolving doors etc.) or just plain don’t care. There are many good people in government some of the best you’ll see but the incentives are just horrible and have gotten much worse over the years. And just to be fair, as bad as the federal bureaucracy is, Congress is even worse. Congress was never as bad, as whole, than it is now.

      It began to get worse (and it had it’s problems) starting with the whole “re-inventing government” fraud way back in the 80s.

      1. F. Beard

        T’would be better if government precluded injustice rather than abet it* and then provide meager relief to its victims.

        *e.g. government backing and enforcement of the banking cartel.

      2. lucky

        I’ve found Social Security, and even the IRS to be friendlier and more efficient than Sears, Comcast, and AT&T.

    2. jrs

      Expecting the Feds to be better just made this Californian roll their eyes. CA wouldn’t have it’s own EPA if their standards weren’t higher than the Feds. Oh well soon all to be illegal due to the TPP I guess ….

      1. Carol Sterritt

        JRS, I felt the same way. I know that Chicago Illinois has had wonderful provisions to keep dngerous pollutants out of Lake Michigan, but the Federal government would meddle. he Federal Govenrment officials would say that Milwaukee didn’t need to avoid polluting the lake, as Milwaukee was following federal standards, and didn’t have to follow dumb ol’ Chicago standards. So the people in Chicago had meninghitis and other diseses to worry about, courtesy of the Federal Govenrment issisting their poor standards were the ones that needed to followed. And like you point out, once teh TPP comes about, californians won’tbe able to have their EPA mean a dman thing!

  3. CB

    As a SS pensioner on Medicare, I can tell you from personal experience that while Medicare is a lot better than nothing, which I had for 25 or 30 years, the co-pays are a serious impediment to care. I have to watch what docs and procedures I sign on for because my income is small and it’s more important in my survival scheme of things to keep a roof over my head than every medical issue disposed of. Food is up there, too. Triage, I believe it’s called.

    1. LucyLulu

      Which may well be the logic behind only offering 70/30 coverage to those receiving subsidies, i.e. those most likely unable to afford the 30% co-pays will choose to not get care.

      1. diptherio

        Looky there, some applied behavioral economics! We don’t need government mandated death-panels to deal with our surfeit of elderly and their endless medical requirements; we can just “nudge” them to make the “efficient” desicion by structuring their incentives correctly so that they make the “correct” choice. See now, isn’t that more humane than forcing people to do the “right” thing (the “right” thing = using your money to pay for catfood and shelter and treating your medical complaints with aspirin and positive thinking: your excessive demand for medical care is driving up costs for everyone, dontchaknow).

      2. Jim Haygood

        Apparently the 70% coverage ratio of the Bronze Plan pertains to its ‘actuarial value’ — a lovely example of legislative arcanity which makes it impossible for non-actuaries (and most of the Democrat KongressKlowns who voted for it) to even understand what the f*ck the law means:


        In any event, the Kaiser Family Foundation study described in the article cites an example of a 30% co-pay capped at $2,750. How this was calculated isn’t clear, since the original KFF study has disappeared from the link included in the post.

        Welcome to the wonderful world of Odiobamacare, where you need an actuarial degree, a database subscription, specialized software and an industry mole to shop intelligently for health coverage.

        Or, you can just trust the experts to take care of you …


    2. from Mexico

      My brother had a stroke last year and my sister found him unconscious in his apartment.

      He was 71 years old. He had Medicare and because he was a veteran also VA coverage, which when he was treated for prostrate cancer a few years back picked up the tab for the Medicare co-pays.

      However, two problems arose in the wake of his stroke:

      1) When my sister found my brother and called an ambulance, by Texas law the ambulance was required to take him to the nearest emergency room, which was Scott & White Hospital, and

      2) The VA hospital, which is only a couple of blocks farther away from my brother’s apartment than Scott & White, does not take emergency patients who are unconscious.

      My brother died after a two-day stay in the hospital. The total bill for the two days amounted to $65,000 plus change.

      When we asked the VA to cover the Medicare co-pay, it refused. It argued that it will only pay Medicare co-pays when the treatment is pre-approved by the VA. It also said that in order for the VA to pay the Medicare co-pay, my brother would have first been have to been brought to the VA hospital and examined before being taken to Scott & White.

      1. JerseyJeffersonian

        This is a gruesome thing to say, but…

        Maybe it would have been better had this poor man not been found until after he was already dead. Seems to be the way the incentives are running nowadays.

        Unless you are Dead-Eye Dick Cheney, who probably got fully converted to a cyborg for free, doncha know.

    3. Thor's Hammer

      Exactly. Insurance co-pays under Obamacare, and Medicare as well, are as much as the entire cost of similar quality private medical care in many other countries.

      In the land of the free we do not have a health care system, we have a medical extortion system.

      When I worked in Canada before starting work the HR officer said “have you picked up your Care Card yet?” “You are in a civilized country now— we don’t believe that people should go without access to medical care.”

      1. issacread

        A medical extortion system; precisely. I bought an individual policy from a large well known NY insurance co. in the early 80s for 279 quarterly. Within 2 yr it was up to 879 quarterly. I hung on for awhile and then quit. I blew almost 15,000 which I should have invested instead. The insurance co. was making up for claims coming in from AIDs by offering a lost leader which swiftly increased knowing many would drop out and few would stay, but only the insurance co. would get their money’s worth. I haven’t had insurance since.

  4. AbyNormal

    This is a blog by a former CEO of a large Boston hospital to share thoughts about hospitals, medicine, and health care issues.
    Paul Levy-Advocate for patient-driven care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvements.
    FYI excellent Patient-Centered Links (down on right)

    warning: don’t read on empty stomach

  5. LucyLulu

    Re: regular denial of claims

    Oh, gosh yes. I saw it first 15 years ago when I suffered a serious accident and had piles of claims. I was fighting more than 20% of them, at least 1/3, and I have no problem saying that it was a Humana PPO through a very large (insurance) company. I recommend everybody obtain a copy of their policy and be familiar with the terms, preferably before you need it. That policy became well-worn from being read to claims reps, why they were obligated under the policy to pay the claims. I prevailed almost always. Also, if the policy is through a large employer, HR can be your best friend. Bids are submitted annually for health policies, and insurers know that appearing non-consumer-friendly to corporate hurts their chances of getting the renewal.

    My daugher was insured through Aetna about 6 years ago through her father, outside their plan area, thus I often had to file her claims myself. Again, about 1/3 of claims were denied, always inappropriately except once when they erroneously confirmed coverage to physician over phone. They later blamed physician for not “knowing better”. My favorite however, and I don’t recall which carrier, except I’ve always had a major one, was when the company restarted my deductible mid-year, which I had just finished meeting. I had converted that month to COBRA. I called the company and spoke to two different service reps and a supervisor. I informed them all that federal COBRA statute barred them from this practice and was told by all that the law was irrelevant, they followed company policy. It was ultimately resolved by the head of HR at the company (another insurance company, AIG as a matter of fact), who said she had sent them countless memos over this for three years.

    They count on not having denials contested. Most physicians take care of filing claims as a courtesy so consumers are largely unaware of the difficulties collecting payment (I’ve spoken to the girls in physician billing offices about this, they complain they tear their hair out), or how they contribute to rising costs by adding to provider staffing requirements, spent on hold on the phone, getting contradictory answers, and refiling claims.

    It is intentional, I have absolutely no doubt. They are scumbags who make their money by allowing their customers to suffer and/or die. Michael Moore’s movie Sicko covered some of this.

  6. diptherio

    One of my Aunt’s ex-husbands (there have been so many) worked at one of the big insurers, can’t remember which. He was doing bottom-of-the-totem-pole stuff, answering phones, mostly. One night, over the dinner table, he enlightened us about insurance industry practices.

    When a client called with a claim, no matter what the claim was or what their policy covered, employees were directed to deny the claim on the first two calls the client made. According to Lester, you weren’t even supposed to look to see if their claim was covered by their policy until they called back a third time. You know, just to make sure that the company wasn’t paying anything it didn’t have to.

    This was years and years ago now, but it looks like things haven’t changed all that much when it comes to industry “best practices.”

    1. britzklieg

      That was my experience as well, after my partner died of AIDS in 1996. As excutor of his estate I spent two years trying to get Blue Cross to pay for the coverage his policy demanded. I was sneding registered mail, which required a signature at the receiving end (which was returned to me) and they continued to resort to “no claim filed” “claim denied” and “claim lost” excuses. The care providers were dunning me the whole time for unpaid bills and when I’d speak to them they were all familiar and beyond frustrated with the game played by the insurers. I can’t get all that wasted time back and I certainly can’t get Glenn back. These were the worst two years of my life and the antipathy I developed for health insurance can not be described in civil language. I don’t even believe in hell, but there is indeed a special place there for the malevolent cretins who willfully and cruelly spend their lives making already distraught people miserable.

      And Obamacare is just more fodder for them over which to lick their chops and to spread their dread,

  7. PghMike

    I had a related experience trying to get reimbursed for a bone density test for my wife. Her doctor prescribed the test based on her age and other risk factors, and Highmark Blue Cross / Blue Shield rejected the claim. The interesting part comes near the end, where Highmark “explains” why they rejected the claim.

    The plan summary we had indicated that this procedure was covered, so I called Highmark. They explained that they have a database of procedures performed by doctors, and reasons that a doctor may prescribe a procedure, and you’re only covered for procedure X if the doctor provides reason Y and reason Y is one of the listed reasons for performing X. They told me that the doctor had provided a reason that wasn’t in their database for our plan for the bone density test.

    I called the doctor’s office, who gave me the reason code, and explained why the other reasons didn’t match my wife’s case.

    I called Highmark again, and explained that the code was right, and that the other possible codes for the procedure didn’t make sense for my wife’s case. And I again quoted their plan summary to them, indicating that the procedure should be covered.

    The person on the phone then put me on hold to talk to her supervisor, who said that the claim should have been paid. So I asked whether the code from the doctor was wrong. The Highmark representative said “No.” Was the database wrong? Was the procedure’s code wrong? “No.” So, apparently, Highmark Blue Cross / Blue Shield has a database of procedures and reason codes that tells them to automatically reject some claims, and a process where they make you confirm with the doctor that the codes provided by the doctor were the right codes. At that point, Highmark will then notice that there’s a “note” associated with your plan that says this procedure is really covered, even though their database is wrong.

    Clearly, this is designed by the insurer to simply shake off the less energetic patients, leaving them with bills to pay that actually are covered.

    And this is Highmark, supposedly one of the area’s better insurers.

    1. CB

      Not just less energenic, too sick and/or intimidated/befuddled to persist. I’m sure the actuaries have calculated to a nicety the dropout percentage and it’s well worth refusing, even with an occasional lawsuit.

    2. petridish

      This is the “covered expense” detail I commented on just the other day. While policy peddlers can legitimately claim that certain procedures “are covered,” left unsaid is how often or under what circumstances.

      Clinicians who alter procedure or reason codes or dates of service in an attempt to assist patients in getting coverage are guilty of fraud and are severely punished.

      Two additional facts are worthy of note here:

      1. Out-of-pocket payments on uncovered services DO NOT apply to plan deductibles–they’re just out-of-pocket, and

      2. While most of the emphasis in 60/40 or 70/30 plans is on the outrageous cost, the real devil is in the sparse coverage details. It is likely that insurance companies will pay for very few meaningful services under these plans and the subscriber will receive very little meaningful treatment.

      1. Ms G

        The real monstrosity is not just the premiums and the sparse coverage but also the increasingly common (very) high annual deductibles, which basically is a dollar amount that should be immediately added upfront to the annual dollar amount for the premiums.

        If your monthly premium is $500 and your deductible is $9,500 (not at all unusual), then your real upfront out of pocket costs (before the co-pays) is $500 x 12 + $9,500 = $15,500. And that’s assuming there isn’t a “separate” deductible for prescriptions, or for some other “category” of services.

        So out of the gate you are out $15,500 (assuming you even bother using the policy because you can’t afford the $9,500), and then you face a nightmare of “gotchas” at every turn where whatever service or drug you need is somehow not covered and possibly not even counted against the deductible (this is another “pool” of out of pocket money shifted onto the consumer by increasingly more policies).

        The current “health” (impoverishment) insurance scheme is a massive legalized looting operation on working people. ObamaCare — wich forces Americans to purchase the worst of the existing fraudulent Insurance Products — is just a scheme for the Forced Impoverishment of the Middle Class.

        1. EasyMark

          So how do we react to this truthful assessment? The law should protect us from this evil fraud, but instead it mandates it.
          As long as Congress and the President is on-the-take it will only get worse because the system rewards greed, the kind that never gets enough.
          Someday, I keep thinking, it will boil over…

  8. allcoppedout

    I had psychotherapy after trauma in my late 20’s. It was life changing. I have often wondered since whether I could have taken it at all if the relationship had been based on me paying. Our relationships with medical professionals don’t seem fitted to financial consideration.
    In the UK the system reaches the ‘US bankruptcy point’ on health care in old age – we have to give up our houses and whatever we expected to leave to children unless super-rich and able to spend our last days in the non-tax-paying Ritz like The Iron Lady.
    The problem in all this is old and to do with how we sort our collective facilities. Its a mess and ideology on private versus state control doesn’t help. I wonder, amongst the horror stories, whether the issue is like the performance of alpha management of investment against buy and hold mutuals or ‘Bogle funds’ – the clever stuff doesn’t work and takes half of any gains in fees. All health services have been stealing doctors and other highly trained people whilst maintaining global scarcity.
    Professional services of all kinds quickly get very expensive, from medicine through crime to financial services. We can’t push wage costs down with our scarcity/meritocracy/education/training systems and the insurance systems we use resemble ppi – designed not to pay out and to maximise issuer profits.
    We need a leveling – but how do we do this without screwing incentives to learn skills? Many become doctors and such in order not to be exposed to “global wage arbitrage”. I suspect the battle is against white collar crime, not really one of government/private control. Do any of the rotten US insurers get taken to court? I get the feeling they just come over here playing the same scams when exposed in the US. My sympathies of course to anyone caught in the trap.

    1. jrs

      “I suspect the battle is against white collar crime, not really one of government/private control.”

      Yes what they are detailing here isn’t even the problems with health insurance coverage per se, that would be a different argument. What is being talked about here is problems with a system so corrupt that the most openly dishonest and criminal behavior is not being regulated and punished. Now you could argue all insurance systems would devolve to this, even if we had a better government overseeing them but … that would be a differnt argument too. I think you can easily argue that existing entities (hmos) have become so corrpt they are unlikely to change their stripes (no matter what regulation is enforced agaisnt them?).

    2. ginnie nyc

      Re: Iron Lady – actually, she did not pay for her final stay at the Ritz. Barclays, the font of honesty and truth, did.

  9. diptherio

    Health insurance (all insurance, actually) has always seemed like a straight up scam to me. I mean, it only makes sense for the customer if their medical expenses over their lifetime outweigh their premium, deductible and co-pay expenses, otherwise they would have been better-off just sticking their premium payments in a savings account and paying cash at the doctor’s office (not to mention that your expenses are much less if you pay cash)*.

    Contrariwise, providing insurance only makes sense for the insurer if, on the whole, their customers are paying more in premiums than the company is paying out in claims. ISTM that health insurance cannot, therefore, be a good deal for both the clients and the insurer, as it is not possible for premiums to be both more and less than claims pay-outs. Since insurance companies remain in business, and highly profitable, we can infer which party is getting the raw end of the deal.

    The only service that health insurance can be said to provide, therefore, is peace-of-mind for the customer. This, it would seem, they are failing at miserably. How much peace-of-mind is to be had worrying about whether you’ll be able to afford your deductible or co-pay? How much do you get from arguing with the insurance company about your claims? How much from contemplating a medical-bankruptcy?

    It continues to astound me the absolute BS that most adult Americans willingly buy into.

    *I know, there are other considerations for people and it’s all somewhat more complex than this, but I think this is the root of the problem: in order for insurance to be profitable, at least some of the clients need to pay-in more than they get back (most of the clients, I would argue, but whatevs). Of course, no insurance salesman is going to tell you that (I’m looking at you Barry…)

    1. Mr. Jack M. Hoff

      Hey Dip, what country do you live in? Here where I live, paying cash gets you the highest possible billing. I know its perverse as hell, but hospitals and doctors have a billing system that includes a retail price and then a negotiated price. The negotiated price is for insurance companies and those who have insurance. The retail price is for those paying cash or without insurance. Often the retail price is 8-10x the discounted rate. Oh yeah, I live in the USA.

      1. diptherio

        I live in the US as well but have managed to avoid our medical care industry since I’ve been living on my own (16 years now). I was basing the lower cost of cash payments on other’s experiences. Someone on this site, IIRC, just the other day was talking about how cash payments got steep discounts.

    2. washunate

      Insurance isn’t a scam. It’s just not designed for what Obama sold it to do.

      Insurance is designed to spread the cost of your own risk out over time, and it does a good job at this.

      Insurance is not designed to shift the cost of your own risk to other people. It does a horrible job at that. That’s what government is for – the public commons as opposed to individual responsibility.

      In private health insurance, the primary inefficiency is the time mechanism. If you could buy ‘life time’ coverage with reasonable transparency and competition, a private market might work pretty well. But in our system of 12 month contracts and cartel markets, average costs over lifetimes are irrelevant. All that matters is the next 12 months.

      1. washunate

        P.S., hit the submit button too soon.

        “It continues to astound me the absolute BS that most adult Americans willingly buy into.”

        Most Americans don’t buy into it, though. First, most of upper middle class America simply isn’t confronted with the detailed idiocy of our system. Employers take care of that. Second, generally speaking, national health insurance is popular, and that’s despite both national parties opposed to it. Third, specifically on health insurance companies, they are extremely unpopular. I think it might be difficult to exaggerate how much Americans loathe them.

        The challenge is not that Americans love the system – public opinion is not the problem. Rather, the challenge is how to get the politicians to change it.

        1. Code Name D

          That may be one of the things that changes in the next few years. Businesses have to pay larger and larger tabs for their part of the employee healthcare system. But larger companies have the clout to neonate lower payments and can even deploy legal assistance to their employees, saving the company money in the process.

          Obamacare doesn’t change any of this, but the insurance exchange may erode or even eliminate their bargaining advantage. Or worse, insurance companies may simply stop negotiating with companies all together and insisting they go through the exchanges once existing annual contracts expire.

          Privet employer plans will suddenly become a lot more expensive. And this may be a radical jump.

      2. LucyLulu

        The primary function of health insurance was meant to protect consumers against the high expenses of an unexpected serious accident or illness, closer to catastrophic coverage. The risk, while small, would have a large impact, and WOULD be spread amongst a large class of consumers. Over time it has evolved to cover more and more routine and maintenance type care. Currently, until ACA finishes taking effect, unless you are part of a large employer or other large group, your policy is priced based on actuarial risk and past claim history (this includes small employers whose policies are underwritten as a sum of each employees actuarial risk…… premiums rise for all in response to heavy claims made by one employee). Such things as taking a single medication, (two family members experienced due to taking prozac, otherwise no health issues, slender, athletic) can cause individual premium rates to almost double.

    3. petridish

      YES, YES, AND YES!!!!

      The conflation of “health” insurance with “healthcare” has been a triumph of messaging on the part of the insurance industry and a dismal failure of critical thinking on the part of the sorry American public.

      If you have “health” insurance, try this exercise just for fun. Figure out how much your first $5000 worth of “healthcare” actually costs you (or you + someone else.) Add the total cost of your monthly premiums, your deductible and your co-pays and coinsurance after your deductible is met. Remember that this is ANNUALLY, and will increase as premium payments increase. Add in dental and vision too. Keep in mind that the first healthcare dollars you are spending are likely routine, preventive services which could keep you healthy (and keep the insurance company from spending any money on your behalf.)

      What you will most likely find is that you are paying $7000 – $8000 for your first $5000 in healthcare–annually. What a bargain. You gotta love this country.

      1. Brooklin Bridge

        Private health insurance actually has worked in countries such as Switzerland where it is (or has been) highly regulated by the government to provide basic health care for all (and their “basic” would be a high grade policy for many of us) while offering additional insurance plans at profit. Single Payer or regulated for-profit or a hybrid, which ever way, the idea is to spread cost and manage saving for the future and in the right circumstances any of them can work. The problem is getting the right circumstances. The global explosion of greed and corporate lawlessness which we live in, which is our reality, will turn any kind of health care policy we come up with on it’s head.

        Going for one type of health care system or another is like going for Democrats or Republicans when corruption has made both of them little more than Tweedledum or Tweedledee.

        We won’t fix what is wrong with health care by getting Single Payer any more than we will fix Washington by getting more and better Democrats.

        1. LucyLulu

          Agreed on all points.

          It’s interesting that Switzerland has a system that looks similar to what the ACA proposes to implement. It also ranks second globally in per capita spending on healthcare, exceeded only by the US. All else being equal, a single-payer system that eliminates the inclusion of third party profits, will always be more cost-efficient.

    4. LifelongLib

      The story I heard is that insurance is designed to protect against random events that are hard for individuals to predict. Health issues apparently aren’t random enough — you can sort of guess what your health will be in the future based on what it is now. So healthy individuals are tempted to opt out of the insurance. This causes the insured population to fill with increasing numbers of claimants. Since any insurance is paid for by the people who don’t use it that throws the whole thing out of whack. Hence ObamaCare’s mandates.

      Of course, all this is above and beyond whatever evil games the insurance companies are playing.

      The answer is to stop treating paying for health care as an insurance-type problem, but a societal good (e.g. single-payer).

  10. craazyman

    This is like reading something out of Cormac McCarthy’s THE ROAD. I just wonder how long it will take before crazed gunman with nothing left to lose except their life, which they have emotionally abandoned as over, start shooting these places up like they’re cutout metal ducks at an amusement park arcade.

    Windows shattering and folks ducking behind the cubes, screaming, flecks of wet blood-red glass and bones, ambulance sirens, SWAT teams and guys in black paramilitary outfits with automatic rifles wandering around and closing down streets. Some hapless fat guy with a Bushmaster dying from years of injustice and hate finally put to rest with 45 rounds of hollow point ammo dead on a somebody’s front lawn while three kids look out the window in terror and incomprehension. Then another and another. Pretty soon it becomes a suicide cult, with their own emblems and tatoos and oaths, a brotherhood of rage and death.

    Do we even have a congress and a president? I’d say the answer is No. We have human corruption standing behind a lectern with a microphone, whose nearly infinite nauseating pabulum is breathlessly analyzed in front of video cameras rolling 24 hours a day. This is why I don’t watch TV or hardly pay any attention at all to anything, except the way the sunlight falls across the clouds and fields of earth and the wonderous variety of the faces on the bus. Well since I’m not paying attention, somebody has to. And youze guys at NC do a damn good job, which more than covers for 100 dudes like me. That’s why I send in the money.

    1. Paul Tioxon

      I feel yr pain.

      I’ll start with my unit of analysis being the entire health care spending sector, $2.5Trillion/yr. and 310mil people. Divide the annual operating cost by the population. You get $8,064 annual per capita.

      So, where does the money come from. In our mixed economy, by the time everyone who can piles into Medicaid, approx half the population will be under a single payer for Medicare, Medicaid, or VA. The other half will have their good, bad or next to useless private for profit insurance.
      IINO, insurance in name only.

      Annual cost for a family of 4 = $32,256. If single payer cuts that in half, $16,128, is that a solution to upwardly spiraling costs? That lower figure is $1,344/mo!!

      2 problems composing the main problem:

      Getting everyone insured

      Stop the health care sector from eating the rest of the economy.

      The health care reform effort will continue unabated. Like every thing else in life. So, my grandchildren will have something to fight for.

      Social Security with Medicare is the future. Actuaries designed it knowing a nationally based system would cut out the cost of duplication over 50 states, which is a ridiculous way to go. Economies of scale is not commie pinko idea.

      Until the uselessness for the upper middle class becomes unbearable for them, we will just have to wait for some kind of Sandy Hook moment where everyone becomes like the CT state legislature, and wants to change everything. The insurance companies are going to collapse under the weight of only having a smaller and smaller market each year to peddle to.

      1. craazyman

        perhaps the only answer Paul is to grow an entirely new species of humanity from test tubes, teaching them from birth they’re slaves and letting them do all the work — from doctors to electricians to cash register operators, if any are left after the machines take over.

        this way no salary would be paid and nobody would need earn a living. there would be no health care costs because slaves would do it all — drug research, primary care, specialists care, working the x-ray machines and all the surgery too.

        food would be free ’cause slaves would work the farms. everything would be free and no human would have to do anything. you couldn’t call the slaves human or they’d get confused. you couldnt’ call them animals because you’d expect them to raise animals and do farming.

        it may already be this way, actually, in some places like New Yaaawwk. some of us are in a state of limbo — half slave, half human, and we change state depending on the nature of the observation.

        actually if the slaves had all the jobs and cooperated withe each other, the humans might get envious and want to be slaves too, so they’d have something useful to do with themselves. drinking and gambling isn’t for everybody.

        it would be a strange world, it is a strange world, actually

        1. Brooklin Bridge

          I think Monsanto’s is working on this. Don’t let the fact that they call them “vegtables” fool you.

    2. Lidia

      They had a movie like that; it starred Denzel Washington, if I am not mistaken. “John Q.”

      “The Hospital” with George C. Scott is bracingly good, as well.

      Of course, in a world of diminishing per capita resources, every child who needs one will not get a heart transplant, whether they have insurance or not.

      That does not mean that insurance companies and “health care providers” are not extortionists who will keep sucking the last drops of blood to be had from us turnips.

  11. Erik

    I saw the RFP to be the company to develop and maintain the NYS Exchange. What a train wreck! The company I was consulting for decided not to even pursue it in the end because it was a textbook lose-lose RFP. If you lose, you lose. If you win, you lose.

    Most of the requirements were “TBD” and they were essentially asking for a cost commitment to an ill-define / under-defined / NOT defined scope. To add insult to injury, there was a very aggressive timeline. This was all under the banner of “agile” development, which is perfectly valid in other contexts. But when it comes to intelligently selecting a vendor based on a standard best value RFP process… the only words that come to mind are “train wreck.”

    1. Ms G

      Out of interest, do you know if the RFP was issued by the Department of Financial Services (which now includes the Department of Insurance), or by the NYS Department of Health?

  12. LAS

    We know; some of us are living it.

    I’ve been forced to shop for individual coverage this very week. Company group coverage that had cost about $550 per month is going to cost me $1,450 per month or $17,400 per year as a healthy single individual between jobs!

    Since all that’s really necessary is catastrophic insurance, an insurance broker helpfully advised that I join Freelancers Union per the interim and buy their health insurance. While better than nothing, I fear it is not comprehensive. I’m looking at one FLU plan with a $6,000 deductable. The deductable is OK with me. The big concern are the exceptions to treatment after that. In over 100 pages of documentation on the plan and me a college educated person, the exceptions to treatment still remain an article of faith.

    Welcome we hardworking dispensable stiffs to downwardly mobile America.

  13. Serf

    The biggest problem I’ve found to be is the co-pay. Make it too low or non existent and patients consume and gorge health care. Iike emergency room visits for rashes and such. I’ve seen it.

    Make it too high and you discourage medical treatment or price out the poor who can’t afford a few thousand a year to take care of themselves

    I think healthier Lifestyles for Americans could reduce a lot of preventable health issues ans free up resources for those who have non-lifestyle induced health care problems

    My health care plan is so expensive because the overweight butter laden cookie eating staff has multitudes Of lifestyle related health problems.

    1. ginnie nyc

      Serf: It’s difficult to comment on your string of falsehoods without resorting to profanity.

      Where is your evidence that a low, or no insurance premium encourages “healthcare gorging”? I have lived under both the British NHS and the American medical insurance regime. The British have no premium, and they are certainly not spending their idle hours in the A&E (Emergency Room) for amusement.

      In this country, there are far more people not seeking necessary care, because of unaffordable co-pays and premiums, than those imaginary people you claim are cluttering the system. When the underinsured are finally in extremis, and forced to go to the ER, their extraordinary costs are what derange the system, not “gorging”.

      Re: “lifestyle choices” – you know, if there were not the high co-pays and extortionate premiums, more people could afford preventative care, including nutritional and weight-loss counseling.

    2. Lidia

      Gee, Serf, would that be the Lyme-disease rash, or the food allergy rash, or the skin cancer rash, or the toxic-substance-exposure rash, etc.? Could it be shingles or an STD? Meningitis, or a staph or strep or fungal infection?

      Who made you the fucking MD???

      The reason people use the ER is because TINA. My DH broke his wrist. On the scale of “emergencies” this was low-level, but where the fuck else do you go? There are no clinics. There are no doctors who see patients without a two-or-three-week wait IF you are an existing patient or they are accepting new patients which most are not.

      Sert, if you had a broken wrist, what would you do? Wrap it up with sticks and bungee cords? Because, I tell ‘ya =>yeah<= that's what *I* would do if were to happen again, rather than pay the ER $1500 for DIS-service and kicking the can down the road, giving my DH a pressure sore under his temp. cast that needed to be treated with antibiotics.

  14. washunate

    Yves, thanks for all the attention you’ve given healthcare issues over the years.

    The idiocy of private insurance trying to cover everyone is so strong that I think even rank and file Democrats will start seeing through the corporate misdirection blame game and realize the problem is the politicians.

    Either healthier, wealthier, and younger citizens should subsidize sicker, poorer, and older citizens, or they shouldn’t. It’s not complicated. There’s no middle ground; it’s a zero-sum moving around of money (in particular compensation paid to connected insiders like specialists, hospital administrators, and insurance executives).

    It’s extremely expensive to have a serious medical condition (the vast majority of expenses are incurred by a small percentage of the population in any given year), so the question is, will A) the healthcare employees make less money, B) will the patients receive less care, or C) will the rest of society pay more premiums/taxes. If your answer is choice C, the only reasonable solution is national, universal, single payer health insurance.

    To even suggest that ‘private’ insurance (as the notion of what private means in the US) can provide ‘public’ coverage should instantly reveal you as a charlatan, hack, and snake-oil-salesman.

    1. NotTimothyGeithner

      “think even rank and file Democrats”

      What I discovered about much of the rank and file is that they don’t care about policy outcomes. The team is everything. I liken it to the raucous ovation Vick/Rothlesberger/(insert creep of the week) received upon returning to the field after scandal X. The politicians are the athletes who provide the competition. They don’t care, and failures will be heaped on the least popular athlete while ignoring the leadership’s decision to keep them on (Baucus/Lieberman).

      Democrats will complain about healthcare, but they will pretend this whole episode didn’t happen. I was volunteering for Obama in the Dem primaries (apologies to everyone, but I despise the Clintons), and the girl who worked for the campaign announced to everyone that any Democrat who campaigned for Lieberman over Lamont should be chased out of the Democratic Party. I told her that would be awkward chasing her boss out of the Democratic Party especially if he is the Democratic nominee. Her eyes glazed over, and her face twitched. She just moved on as if she had said nothing in the first place.

      Low-info Dems are reachable, but the people who are still going to committee meetings and promising “more and better Democrats” as the solution are not reachable. They are fans first and foremost. They need to be marginalized.

      1. washunate

        Great comment. I think that’s the heart of the strategic question. Is there a Democratic Party to save/reclaim/whatever, or is it so completely overrun by opportunists that we basically just have to stand aside and let it implode?

        Not suggesting any answers (I feel pretty helpless on that front), I just think it’s important to understand the problem first. That’s what I’m most hopeful about over the past 6 years of Democratic rule – that it has revealed pretty clearly that the problem is the political leadership in general, not the GOP specifically.

        A fun test I have now when I see political commentary from Democrats is whether they address a particular issue substantively or are more interested in blaming Republicans for it. It’s amazing how much Dem drivel constitutes the latter.

        1. Lambert Strether Post author

          Yes, the Democrats are truly expert blame shifters. We saw this right out of the box with Obama. Remember “He’s only been President __ months”? That was before “Make him do it.” Then came “The President is not a dictator.” At least that’s the sequence as I remember it; I wish I’d built a timeline…

          1. NotTimothyGeithner

            Don’t forget 853rd dimensional chess, and he’s the President of everyone not just Democrats.

  15. Brooklin Bridge

    @Dipthero, I often make to myself the exact same arguments you make above when I’m trying to figure out the sanity of things healthcare related and I imagine you are quite aware of the arguments I paraphrase below. They are essentially, I think, the canonical arguments of the insurance broker in response to the observations you and many others make.

    A large number of people have two characteristics, the inability to put money aside for long term needs and a greater need for medical services when old than when young. The theory is that this justifies the service health insurance provides (not necessarily the profit part). So, considering the latter, while young, one is paying in more than the medical expenses are taking out and when old one is paying in less and it is supposed to even out. And this process takes care of planning since – as long as one can afford it at all – having the excess money put aside in manageable installments by an independent source takes care of people’s inability to plan ahead. A third characteristic that people tend to have, in spite of brain washing, is empathy or compassion or caring or whatever for other people in general that probably comes from our evolution as a group species relying heavily on each other to survive, and which we express in healthcare insurance as paying a little more than a policy is worth so that others can pay a little less than they would have to pay if such policies were taken out only by those who needed large amounts of care.

    If the above were all there was to it, it’s doubtful that anyone would object much to insurance companies taking a small profit for such a valuable service, but of course due to yet another characteristic of many, greed, and the way it gets institutionalized into our social structures and systems, most of the above arguments are turned on their heads and what we end up with is a nightmare that is hell bent on doing the opposite of it’s stated intention. And because systemic greed has gotten so insanely out of hand, government “regulation” in this country is virtually a sick twisted joke guaranteed to be nothing more than a front for insurance companies indulging in an orgy of politician endorsed corruption.

    1. Brooklin Bridge

      It also occurs to me that Single Payer, just like highly regulated for profit insurance companies that provide basic plans with no profit allowed, would be virtually impossible in our current climate. Our politicians are obviously not an accident but a result of this uber-greed-issimo-gonzo system. Wall St. is pulling the strings. From what I hear many European countries like Switzerland which have historically been exceptional in thier health care attitude are being corrupted by Wall St. International (or it’s influence) and are weakening their health care programs and/or their regulations on for profit insurance companies. There is a ways to go (particularly in comparison to our national nightmare) but the direction of things is NOT good.

      So in this atmosphere and climate and reality of out-of-control corruption, of Wall St. fiddling as the very Earth itself burns, what exactly would “Single Payer” accomplish? It would be single payer in name only. Underneath, it would be pay-to-play like everything else.

        1. Brooklin Bridge

          Fair enough, but none of the things you mention came about in a vacuum. I still think the best health care plan in the world simply won’t work with the current players and attitudes. You can declare pre-emptive, useless wars. You can have mass killings at schools, pop a politician, etc., without undue fear of triggering reaction. You can get a decent (half decent)law passed that regulates banks and then have it chipped away until it is utterly useless. So even the best health care legislation would probably suffer the same fate. The banksters and insurance-sters and so-on-sters are going to have their way for a while longer.

          I agree the underlying attitude and circumstances will change over time just as they did for the issues you raise that suddenly without warning or fanfare the time is ripe for change, often triggered by some seemingly random – to the issue – event (the Civil War was largely about economics, but if people had not been emotionally ready for equality it would have probably failed regardless). But I just don’t think that time is right now, however much we might wish it to be so.

          1. Lambert Strether Post author

            It’s not taking place in a vacuum. There’s plenty of activism on the single payer issue. The political class is playing gatekeeper, and that includes most of the career “progressives” who ran interference for Obama in 2009, suppressed all single payer news — for example, Margaret Flowers committing civil disobedience in Max Baucus’s hearing room — and silenced or banned single payer advocates. Not because the policy was bad, mind you; just to avoid having an awkward discussion they couldn’t win on the policy merits. Also too, Obama took his shirt off. That’s how you could tell his heart was in the right place.

          2. Brooklin Bridge

            In our current atmosphere, I suspect you could find 1000 people that are satisfied with Obamacare (never mind that it hasn’t even been implemented) for every 1 person you find who is aware of how much it sucks or that it has more to do with a give away to the insurance industry in particular and a lining up of acceptance of government mandates in general than with any notion of health care. That’s what I mean about the cards not being right, the stars not lined up, the context not ready, etc., etc., Not that there are not plenty of activists ready to fight for it. But relative to the population, and the media, and the political elites, and Wall Street, there simply aren’t enough of them to get their ideas across. My aunt listens to the stenographers, no, water carriers, no, news every day and these activists might as well be on Mars as far as she’s concerned, and here in lib-er-ul Massachusetts, I am amazed at how few people I run across that are aware. Yes, many of these same people are for single payer, but it doesn’t exactly burn as an issue since they feel Obamacare is good enough or as good as Health Care is going to get.

            I agree with each of your points about activists and how they were thwarted but that only indicates to me that indeed Single Payer wouldn’t fly in the current environment for the very reasons you stated; The political class is playing gatekeeper, and that includes most of the career “progressives” who ran interference for Obama in 2009, suppressed all single payer news — for example, Margaret Flowers committing civil disobedience in Max Baucus’s hearing room — and silenced or banned single payer advocates. Not because the policy was bad, mind you; just to avoid having an awkward discussion they couldn’t win on the policy merits. Also too, Obama took his shirt off. That’s how you could tell his heart was in the right place. These people will do anything to keep Single Payer off the voting agenda and if it somehow got through, to thwart and chip away at it and corrupt it and wash it down the drain.

            On one side, you have the political elites, Wall St., the insurance industry, the pharmaceutical industry, the media all lined up against anything even remotely sounding like single payer and on the other you have a (relatively) small group of people who are constantly being bulldozed underground, harassed, jailed, ignored, made to look like degenerates, etc., every time they bring the next good idea or scandal or what ever to light. I lived through the “red” scare of the 50’s (mostly through the reactions of my father – who got upset at almost nothing until McCarthy came along) and it was a breeze compared to just how pervasive and global and insidious this phenomenon is today. I would be delighted to be wrong but I fear that a lot more suffering is going to occur before you suddenly have that critical mass of people who are willing to hold politicians to account or willing to stand firm for something like single payer when Obama, aided by the Press, the CIA, the FBI, Congress, MSNBC, CBS, Fox, The army, the air force, the navy, Wall St., The religious right, the religious left, Jebus crepus, might as well be EVERYONE., so Obama, aided by all these folks, can keep selling head fakes to what I assume he considers the herd.

            They really have realized that they don’t have to fool all of the people all the time, or even some of the people some the time, but rather, enough of the people enough of the time, consistently, and they have become experts at it. Akkk, a good friend and cousin of mine just went to see that torture proselytizing movie, 5/11 the dark side, or what ever it was called, and he came away being “grateful for what we have.” Good grief, what is one to do???

          3. Brooklin Bridge

            Previous comment hangs in mod. It was way too long so that is probably reason. The language I think was OK except perhaps for J-e-e-b-u-s C-r-e-p-u-s.

          4. Lambert Strether Post author

            @Brooklin Bridge Well, the point is to change the political atmosphere. Updating: Not really “one way” to do this. But repeat, repeat, repeat is critical…. And no political class is forever, not even the current one.

          5. Lidia

            Brooklin Bridge, what are you talking about? “Obamacare”/”Romneycare”/”HeritageFoundationcare” has not even been fully implemented yet and won’t be for months. How can anyone say truthfully whether they are “satisfied” with it or not? Ask again in 5 years, maybe.

      1. Brooklin Bridge


        You’re right, fealty to corporate hegemons and indemnifying their profligacy with mandatory tribute* hasn’t yet been implemented, fully. But public opinion has and public opinion is more important than reality in terms of what I am talking about. And it is overwhelmingly one of two things:

        1) Obamacare is reasonable and a significant improvement over what we had.

        2) Obamacare is the best we could have achieved under the circumstances (usually meaning Obama can’t do too much with those nasty obstructionist Rethuglicans).

        * A line I’m particularly fond of from Randall Amster, The Road to Health Care is Paved with Bad Intentions

    2. diptherio

      Thanks for the thoughtful response. While I understand the theory of spreading risk over time and being a forced savings mechanism, these arguments have been, sadly, totally irrelevant to me and, I assume, many like me.

      I’ve had three different jobs that offered health insurance coverage. One was through the Teamsters at my local bus company, one was at a nursing home and the other was working with cognitively-impaired adults. In all of these jobs I was making around $1000/mo. The premiums were all around $150, with deductibles of (IIRC) $3-5000. None of the jobs offered much in the way of security or advancement options, so there was little chance that I would still be around when I really needed the coverage. And then, of course, I already knew that insurance companies would do anything in their power to not pay claims.

      The way I looked at it then (and still do now) is that, if something does go wrong for me, health-wise, I’m gonna be broke whether I’ve been paying insurance premiums or not. Might as well use the money for higher purposes now…at least I know what I’m getting.

      The insurance model is broken, if you ask me. We need to stop talking about getting everyone health insurance, and start talking about getting everyone health care. That would be cheaper and more humane.

      1. Brooklin Bridge

        The insurance model is broken, if you ask me. We need to stop talking about getting everyone health insurance, and start talking about getting everyone health care. That would be cheaper and more humane. -Dipthero



        More than just the insurance model is broken. Much like what Hugh says (or my understanding of it), until we talk about the purpose and intent – that these things; housing, health care, employment, among others, are about human rights and dignity – we will keep getting hoisted on some aspect or another of our own (as a society) petard.

  16. villageidiot

    Health insurance providers count the money you send them, after that, you don’t count at all.

    I used to work hard each month to earn enough money to pay my health insurance until I figured out that it was killing me faster than not having health insurance, so I quit buying and paying the premiums years ago. Haven’t had any in years and am in better health than if I did have it. My labor is my capital, doesn’t belong to anybody but me. Why should I have the same premium as someone making 20 million each year like Mitt Romney? It’s stupid.

    Health insurance will be very inexpensive if everybody refuses to pay the premiums.

    Shake those chains.

    1. Mr. Jack M. Hoff

      Yep, good thoughts Idiot, Shake those chains…. Works well, when you’re young and/or don’t have any dependants. But when you try to accumulate anything for later years, or want to have a house you can call your own, then its foolish. One thing goes wrong, and there goes everything you’ve ever worked for. And the chances of that one thing keep going up and up every year. In fact they become nearly unavoidable. But hey, its your casino out there.

      1. villageidiot

        Maybe, maybe not. Doesn’t really matter. If you have health insurance and are hospitalized with a terminal illness, those providing the health care will end up with everything you have and worked for anyway. I’ve seen it happen. People who have made millions of dollars and are worth millions when they die end up still having to pay more than what they had.

        That’s how it works in this world. It is still a racket and will continue to be one. Shake those chains.

        Why is it when a person is diagnosed with cancer that there are fundraisers to defray medical costs even when the person who is ill is still covered by insurance? It’s a racket.

        1. Jagger

          Hope you or your parents never need a nursing home due to alzheimers or a stroke or whatever. At $5,000 to $9,000 a month, it will wipe out anybody but the millionaires. Although if you have the knowledge, the foresight, the cooperation and the luck, you can distribute your estate 5 years prior to needing a nursing home and provide a middle class inheritance including your home to your kids. Otherwise, you will be wiped out through nursing home costs and the government will take your home through estate recovery. It is a weird, arbitrary system which makes no sense.

          I wonder just what percentage of people will need a nursing home for long term care when the baby boomers reach that age.

          1. ginnie nyc

            Estate planning to dodge nursing home fees requires more than 5 years in most states; at least 7. And for the average working person (meaning under $50,000/year) it is simply impossible to save for a nursing home later. This is why we have Medicaid.

    2. Lidia

      This is true not only of HC insurers. My mom came to live with us, so the time came to empty out her house and sell it. The insurance agent, when she found out we were having an estate sale, said that any issue stemming from the sale would NOT be covered by my mom’s homeowner policy, because the estate sale construed “operating a business on the premises”. I kid you not. My mom, already in fragile mental health, freaked out, insisting that we had to cancel the sale, and was in agony over the agent’s personal insistence that she not sign a contract for the estate sale people to sell of the contents of the house.

      We held the sale anyway, and no one broke anything, thank Dog. The question then came to be, what about the RE agent, and his showing members of the public the property. The ins. agent sold us a commercial “vacant property” policy for the next six months as the HO policy had expired (just previous to the estate sale, but the agent said that NEITHER type of policy—HO or Commercial Vacant— would cover liability towards “members of the public”). Well who the hell is liability coverage intended to cover, if not people extraneous to the property, I ask you!? The agent claimed that the RE agent would have business ins. to cover his liability. Fine, but what if someone trips on the stairs while he is showing the house?

      The estate-sale woman said that she had talked with her lawyer who said that her activities fell under being a sub-contractor of the home-owner, and that -anyway- she could not insure property that wasn’t her own (i.e., if there was a defective stair tread, how could that be the fault of the ES lady rather than the HO?)

      The whole thing was a nightmare, and the salient part is still unresolved. The $1500 6-mo. “vacant house” policy won’t cover anything that happens to the “public”, but how do you sell a property without inviting the public upon it?

      The bottom line is that my mom has been paying this company $3-$4k p.a. to do fuck-all, and when a situation arises in which you MIGHT need a little extra coverage, it’s denied you. We weren’t offered, like with a rental car, a special one-day extra insurance for $50/day. I don’t understand why not. I pressed the agent about this situation, saying that it was NORMAL for houses to be cleared out and shown to the public, that this happened every time a house changed hands, practically, but she was unmoved. When I asked the ES lady why she had never had an issue, she said “probably because no-one before you ever asked their insurance agent” whether a sale on the property (or OF the property) was actually OK with them!!! Asking the insurer about the RE agent, she said “well, if he’s on the property ALONE…” and then she caught herself, backpedalling into “he’ll have liability insurance through his agency”. The whole thing is bullshit to the Nth degree. There is no transparency, and these people are just parasites.

      Still flabbergasted at the flagrancy of the extortion…

  17. Klassy!

    You have 300K in medical bills. You still need to cough up 60K even with insurance.
    Shouldn’t the first question be “Why the hell does the bill come to 300k?”. There seems to be little check on what the providers charge.
    Single payer is our only answer for keeping costs down. I know there are other countries that keep costs down without single payer, but I don’t see that happening here.

    1. Dave

      Perhaps the problem is insurance itself? During Hillary’s campaign to change our medical system Senator Phil Gramm made a very astute comment. “If there was grocery insurance groceries would be very expensive and everyone’s dawg would eat very well.”

      In my international travels I have made a point of talking to Canadians about their health system, which is treated very badly by our media. None have been unhappy. Perhaps the solution is to finance our health care as we do our roads and fire departments?

      1. MLS

        Yes, agree completely! I made this point here a few days ago in fact. Health insurance is overused, which is a big reason why care is so expensive.

        The answer is LESS health insurance, not more.

        1. Lidia

          That’s impossible because the parasites msut have their pound of flesh. Also, JAAHHBS.

          You should have seen the fear in the eyes of the billing folks at the various hospitals I had to deal with when I told them that in Europe (or at least Italy) there were no jobs like these; that there was no analog to what they did; that people could spend their time better not doing what they were doing.

  18. pebird

    Last year I had a $65k claim that had been ore-approved that was denied. It happened to be right before the end of the year, the code was out of plan provider, which was obviously wrong as the same provider was paid many times before.

    I figured it was end of the year book window dressing, and sure enough, when I called on Jan 2nd, they informed me there had been a computer glitch which resulted in some claims mistakenly being disallowed? Right. Good old BCBS-BS.

  19. sharonsj

    Just yesterday my friend coincidentally talked about problems with medical billing. She needed an MRI and was trying to find out the cost (she has insurance). Neither the insurance company nor the doctor could tell her. She also discovered descrepancies between what she’d paid previously, her co-pays, and what the doctor was billing.

    From experience I know that the cost varies and it depends on if you have insurance and what company, or if you have no insurance. People with no insurance get charged at a much higher rate. I needed a steroid shot when I had no insurance. I was charged $200 for one shot and found out that if I had insurance, the charge would have been $100.

    By the way, the reason my friend needed to know the cost of an MRI was: she took her late mother for an insurance-approved MRI and as they left they were handed a bill for $5000. It took some time to straighten that out and now she worries that it will happen again.

    1. Klassy!

      But all your friend has to do is some investigating to find out what the normal charge to insurance is for the MRI. Then, armed (no, empowered– it’s all very empowering) with this knowledge she can make a dozen or so calls to negotiate the charge down.
      Isn’t this efficient? And it’s exhilarating to be in control of your destiny. This is so much better than having leisure time which may be wasted on useless activity such as reading a book, watching a movie, playing softball, or watching your kid’s recital.

      1. LucyLulu

        Depending on what you are faced with, this doesn’t always work. I required surgery and the doctor, one of only two locally qualified to do the procedure (the other was at university, do they negotiate?), held out for only a 15% discount on his $5000 fee and the hospital refused to budge at all on the 3 day stay. I got lucky. The hospital, out of routine procedure, billed my insurer (which had refused the pre-auth, not covered in policy on adults) and apparently by mistake, they paid the bills, at the usual negotiated rates, which were about half. I only owed some pocket change. Then I held my breath for the next couple years that they didn’t do an audit and catch it.

  20. Jagger

    By the 2014 elections, the people should have formed their opinion on Obamacare. Who do you think is going to pay the price in the elections once people understand the consequences of Obamacare both in terms of penalties, cost and health results?

    I have no doubt many are just going to pay the tax penalty as they either can’t afford the insurance or can’t justify the insurance costs.

    1. NotTimothyGeithner

      Its going to be brutal. Inflation and the absence of small donors/volunteers mean Democrats and especially challengers won’t have any kind of campaign until the beginning of September when people get on school times and start watching local news on a more regular basis. By then it only gives about a month to register voters much less identify voters.

      Having attacked liberals (the people most likely to register voters) and without a constant barrage of a Presidential race, young people won’t vote just like they didn’t in 2010. Social issues work for a time and only for so long.

      The Democrats will be competing with the regular Republican voters who might smell blood and the message that everyone in Washington is a crook. This time the Democrats will only whining about why they didn’t push harder as more and more people are screwed through inflation or hidden fees.

  21. Brooklin Bridge

    Obamacare has nothing whatsoever to do with health care. It has to do with acclimatizing people to government mandates on behalf of corporate profligacy. Government being the Guido for private enterprise.

    Mandate is the key word and it will become common for more and more logically public services as large numbers of citizens are coerced (fishy-in-barrel) into groups and sold as such to Wall St. speculators for this or that industry that can no longer sell it’s worthless services or products to an increasingly flat-broke public without the, ahem, assistance of our beloved, flag covered, pin carrying government.

  22. Dandelion

    Insurance companies dont make their money on the difference between premiums paid in and claims paid out. They make their money via arbitrage, the time value of money.

    Just after Obama took office, after TARP etc had been passed and AIG bailed out, the insurance companies went to Obama and said they needed a bailout too. Obama told them he couldnt get anpther financial bailout through at that tiime. And then immediately his number one priority became getting the ACA passed. I think the timing and the urgency had nothing to do with concern for the uninsured, his legacy, or anything else. It was a stealth bailout of another arm of the FIRE economy that had played recklessly in the financial markets.

      1. Stirner

        The Covert Rationing Weblog argued that the PPAFA was an insurance company bailout from day one. Although he is rather anti-progressive, he is not a talking points oriented healthcare analyst.

        There are two other arguments:

        1) The dog that didn’t bark. While there was lots of Tea Party opposition to Obamacare, where were the health insurance companies in the debate. Pretty darn quiet!

        2) Survival Mode in a Zero Interest rate economy. If insurers profit from the float on the premium payments, how can their business model survive in the ZIRP economy. The answer is to become benefits administrators and earn the skim by administering benefits instead of designing benefits.

        Since you are interested in the IT aspect of Obamacare implementation, here is a link to the RPF for the eligibility determination mechanism of the federal exchanges. This is only one component of many moving parts in the Federal Exchange rollout. Of note: The RFP was issued in November 2012 for Federal Exchanges that are supposed to be up and running in October of 2013. Less than a year to build out the IT to interface with the IRS, immigration, multiple states that all have different health insurance regulations…. Good luck with that!

        1. Lambert Strether Post author

          Thanks very much. I’d be really interested in getting a detailed evaluation of the RFP from a professional. It would also be keen to know which vendors bid. It would also be interesting to know the contract vehicle that is being used.

          However that link does not work for me. Is this the RFP?


          Solicitation number HHSM-500-2012-RFP-0002?

          This seems to be the PDF. I notice there have been 8 amendments since the original was issued. Is that common?

  23. Kelly

    Health Insurance is not Healthcare or access to healthcare. The plans put people in a pickle. Either high deductable, so no access to regular care, but hospital stays covered, or low deductable, doctor visits covered but with the patient having to come up with 20% of a hospital stay. Plus companies can pick a price so it takes more money to cover the deductable. If a MRI is 5000, then they say Usual and Customery Rate is 2500, so only 2500 is applied to the deductable although you had a 5000 bill.

  24. run75441

    Most commercial insurance plans are capped as to how much one has to pay out of pocket. The PPACA plans are capped at ~$6,000 for an individual and ~$12,000 for a couple starting in 2014. As one poster said, it pays to read the 1 inch thick healthcare insurance policy you are given rather than the summary of coverage.

    For 2012 with an endoscopy and Gallbladder removal in September plus open heart surgery 3 months to the date in December, my out of pocket was $2,000 with an HSA. The hospital had an ~10% discount. All other billings (doctor, surgeon, ER, ER doctors, anesthesiologists, home nurse care, radiology, Meds, etc.) were heavily discounted. ~$120,000 counting my portion.

    I have had to go back and argue why my own did not pay some bills and why I was paying $113 for Avorostatin through Medco (company direction) when I could get it at Walgreens for $72, the VA for $27, and for free at Meiers food store (3 month supply). There are a lot of twists and turns in the healthcare insurance business for the insurees. The biggest being it is an ultimate reflection of the healthcare industry.

  25. Bridget

    I have an inexpensive high deductible plan coupled with an HSA. As part of an insurance network, I get the benefit of negotiated discounts with providers. Since I’ve never met my deductible, I don’t know what happens beyond that point. But, at least while I am paying for care out of the HSA, I am in complete control of my health care decisions. I don’t have to seek permission, follow any guidelines but my own, and there is no insurance company or government to deny my claims. I am very happy with it.

  26. Min

    “And maybe I’m old-fashioned, but when the Feds step in to set a standard, I tend to expect them to improve on what the states are doing, and not degrade the situation.”

    So pre-Jimmy Carter, back when states enforced usury laws, and before the hyper-inflation of US health care costs.

  27. Benedict@Large

    Everyone seems to be missing the macro on this denied claims issue. Everyone thinks that the insurer surely pockets this money as profit, when this is clearly not the case. Insurers by plan type (group or individual) have what is called a medical expense ratio which specifies BY LAW how much of every premium dollar has to be paid back out in payments for medical services. Denying a claim or many claims does NOT affect this ratio; the same amount overall must still be paid out. What denying claims does however, especially where there is a pattern based on factors other than medical, is (1) allow the insurer to select which of their customers get better service, and which get worse, which in turn allows them to favor markets where they feel they can do better, and (2) allows the insurer to write plans which appear to be more generous than they actually are or even can be. Either of these is of course a rip off/deception, but neither actually takes premium dollars away from being paid out and turns them into profit.

  28. Hayek's Heelbiter

    I used to live in the U.S., and had four friends who would still be alive and one woman who would still own her own house if they lived in the U.K. where I now reside. My wife was recently diagnosed with cancer, and was treated by the NHS.

    She received and is continuing to receive state-of-the art treatment by one of the top oncologists in the U.K.

    Total out-of-pocket costs for operations, chemo, radiation AND transportation to and from the hospital.

    GBP0.00 (at GBP1.00 = USD1.50, this works out to USD0.00)

    Cannot believe the things I read in the U.S. media about “socialized” medicine. What are planet are these writers and editors living on?

  29. splashoil

    Here is a good read from a commenter at FDL about the Washington State Insurance Exchange:

    The Washington Health Benefit Exchange is another toxic neoliberal public-private partnership in which the public picks up the tab and the private-nonprofit entity skims off the nonprofit profits — plus, the price tag increases over time. The Exchange is costing the taxpayers $50 million per year to implement and maintain with official projected estimates that the costs will increase to $55 million by 2017.

    Still, Michael Marchand, director of communications for Washington Health Benefit Exchange, a nonprofit public-private partnership, is optimistic:

    “Everything leads me to believe we will be successful,” he said. “I’m very bullish in the Exchange. If I was judging by interest, we would be successful, but it will come down to the purchasing decisions.”

    This will be very expensive. Not sure who will pay?

  30. ProNewerDeal

    from a “rational economic” decision, if the estimated “net present value” of one’s net worth is lower than 1%er level, say at least 2 Million, isn’t it rational to try to emigrate to a civilized nation, e.g. most other OECD nations, with health care as a human right & 50% of US health care costs, like Canada? whether it’s by work visa, or if you can afford it (e.g. rich 5%er but not a multimillionaire oligarch), by the ~$400K start a small business visa aka “buying permanent residency”?

    In the barbaric USA your life &/or net worth can be eviscerated by the extortionary oligopolistic health industry cartels at any time.

    I admire the intelligence & judgement of Yves & this site’s commenters, would love to read your take on my comment. Cheers

  31. Christina Marlowe

    Insurance, particularly health care insurance, is one of the greatest and most profitable scams in history. U.S. citizens pay thousands upon thousands of dollars per for NO GOODS and NO SERVICES. In essence, citizens diligently pay out billions of dollars for ABSOLUTELY NOTHING. We are in fact, making a small handful of these huge industry titans within this fraudulent RACKET, the for-profit health care industry, a veritable FORTUNE.

    Simply stated, when any industry is driven by profit and profit alone, AS IS HEALTH CARE, they, these unconscionable controllers of the industry, reap dizzying and obscene amounts of money. WE, on the other hand, LOSE consistently and constantly. Profit-driven health care is an absolute NEMESIS.

    As this health care industry makes record profits from not providing health care to those who pay for health care, the industry also becomes much stronger and much more influential; Witness the ULTRA-powerful and ULTRA-wealthy lobbyists who fight tooth and nail to keep things the way they are, AARP, for one, is just another front group for the insurance industry.

    My suggestion is for everyone, en masse, in unison, to STOP PAYING FOR NOTHING.

    As for the government quislings in this thoroughly failed nation, I propose a simple and straightforward bit of legislation to be given to the citizens as a REFERENDUM vote:

    Retract entirely every last health care benefit that these hypocritical parasites in our miserably failing government enjoy on OUR, the taxpayers’, hardearned dime. Then these corrupt, meanspirited and unconscionable government workers would all have to do just as WE DO: buy filthy, grossly inflated,
    anti-American, inhumane for-profit health care “insurance,” (one of the biggest SCAMS in history) that covers nothing at all just when you need coverage most; and then, when one of these filthy, horrible government HACKS gets sick and is denied coverage, let the insurance company CEO unceremoniously pull the plug.

  32. Ms G

    (Readers, have any of you had this experience?)

    Yes, in New York City. With one of the Big Three Insurance Cartel Companies. Chronic “loss of claims.” Even when sent certified mail (which is now what I do with every claim). You don’t find out that a claim has been “lost” until you realize — “Gee, I mailed that claim form in over a month ago, let me call them.” At which point they say “we have no record of that claim.” Then you re-send it. Not infrequently, same loop repeats.

    The whopper was when — in Round 3 of this bulls**t — I faxed the claim and had a confirmation of receipt. Guess what. 2 months later, no EOB/reimbursement. I call: “no record of the claim.”

    But the worst was yet to come, as I followed instructions and filed a claim with Mr. Cuomo’s Commissioner of Insurance, Mr. Lawry. The very short version is: I send complaint that Insurer is now in violation of Prompt Pay law and claims “no record” even with fax and confirmation; the Insurance Department forwards to Insurer who forwards back unintelligible gobbledygook which amounts to “we don’t have a record” and Insurer forwards that to me with cover note “here’s what Insurer says.” I then re-email the fax confirmation to Insurance Department, asking how they can credit Insurer when I have fax confirmation. Answer? “This is a dispute of facts so you must sue Insurer in Court. We do not have jurisdiction to make such a determination.” I noted this was absurd in view of a fax confirmation. Response? “You could have faxed anything – we don’t know that it was a claim.” That’s right — the Department essentially told me (in a written email!) — that it was possible that I was just faxing Insurer for the heck of it, to send them some Rite Aide coupons, or photos of funny birds. The fact that the number of pages faxed was identical to the hard copy of the fax cover sheet and the claim papers (all of which were provided to the Department) did not sway these bright folk.

    New York State has a captured Insurance Commissioner. You have to go to the Attorney General’s Health Care Bureau for any meaningful response.

    1. Ms G

      Note. After going around the merry-go-round with the Insurer for several rounds of emails (before going to the Commissioner) I realized that they have a perfect solution to violating the Prompt Pay Law without any accountability — just “lose” the claims.

      I picture the Insurer’s mail room as a garage where truckloads of claims are dropped off on any given day and half of them are immediately thrown into a shredder truck (at random), which then takes the shredded claims to a city dump. There can’t be any other — rational — explanation.

    2. Brooklin Bridge

      Really sorry you had to go through that crap, Ms. G. It’s questionable how long we will be able to resolve such issues at all. Just one more arm of the legal Mafia.

    3. ginnie nyc

      Ms. G: Thanks for posting about your finally getting help from the AG’s Health Care Bureau vs. Dept. of Insurance. Valuable information. It’s a shame – in the past, Dept. of Insurance was super-helpful to me (about 10 years ago). Now, it looks like they’re behaving the same as a lot of my pernicious “care manager” agencies – they collect their cut off the top of revenues, but won’t lift a pinky to actually DO anything – it’s all on you.

  33. GeorgeK

    I went broke with excellent health insurance before Obama Care.

    Had my shoulder replaced recently; $74,000.00 and change.
    My out of pocket $1,700.00

    The insurance companies still try to run games but
    I’ve been dealing with health issues since cancer in 04. I’m a professional patient so I’m usually a half step ahead of the SOB’s but Obama care is saving me from another financial wipe-out

  34. Chris

    What a tale of woe the US health care sector is. Expensive and does not give you better outcomes or longer lives, in fact the USA ranks low in many areas.
    My mother is 78 and like me lives in Australia, although born in UK, she took up citizenship which entitles you to free care in any public hospital. She is of reasonable health, but her aorta burst a couple of weeks ago (same thing killed her mother in her fifties) and she was medevac’d by helicopter to hospital where she underwent a life saving operation on her heart. Three times they operated to resection her heart valve and she also received a heart bypass using an artery from her leg. Ten days after this and she is still in intensive care with some very skilled and well paid people looking after her at every single moment. Not awake and we fear the worst.
    Then she wakes up and is now on the mend. All well and she will be home in a few weeks. Cost to her is nothing. Could you imagine how much better she would be feeling worrying about money in the US system? Crikey!

    1. skippy

      The sad thing is… practice makes perfect, so like the surgeons on the battlefield, discovery and ability is honed.

      If it were not for the perceived costs of attending some whom are deemed, not worth it, a greater cost down the road is negated. But, as it stands, only time = money is the metric observed.

      Skippy… my father in law not 8 months ago got a six way by pass, yesterday got a pacemaker. We’ll keep him around long enough and then have a huge party[!] to send him off!

      PS. money does not equal humanity… nor time or space… humanity created money and it should serve its creators and not us it… eh.

  35. Venus psi-trap

    I’m Canadian and have to agree with the poster who highlighted the fact that Americans, through their mainstream media and corrupt politicians are fed a tremendous amount of propaganda about our system. Though imperfect, a one user pay system is cheaper, streamlined and puts monopoly power where it should be–in govt hands. This enables our govt to dictate to oligopolies, when that is required–not the other way around.

    I never have to worry about financial ruin following on the heals of a medical disaster, when I am least able to deal with it. The worst I can expect is a 6 month wait for elective surgery, like a knee replacement. I think I’ll take that trade!

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