Daily Archives: August 16, 2009

Boutique Insurance

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I want to comment a little more on Newt’s op ed in the Los Angeles Times today, because he says some things that I have seen popping up in a lot of right-wing commentary.

One key proposal is to mandate an “essential benefit package” for every private insurance policy sold in the United States. Currently, individuals and employers usually make these coverage decisions. This legislation creates a new federal Health Benefits Advisory Committee that would decide instead. For example, if you are a single male with no children, the legislation still requires you to have maternity benefits and well-baby and well-child care coverage. You don’t want or don’t need that coverage? Sorry, you have to pay for it anyway.

Putting aside the fact that single men father children all the time, and in a perfect world those single men would be just as responsible for maternity and well-baby bills as married ones —

Insurance works by risk pooling — everybody throws money into a pot so that there’s money for people who are hit with unexpected expenses. In order for this to work, in any given year most of the people in the pool throw more money into the pot than take it out. Generally, the bigger the pool, the better it works. Insurance companies invest the premium money, and they make most of their profits from investments.

Maternity and well-baby care can be horrendously expensive, because horrible things can go wrong that require megabucks to care for. If the only people who are paying for maternity and well-baby care insurance are young couples who plan to have children, probably few of them could afford the insurance. It is made more affordable by throwing maternity and well-baby insurance into the big pot with toenail fungus, prostate cancer, high cholesterol and the flu.

But let’s be more frank about what Newt really is saying. Essentially, he is arguing against consumer protection. In many states, people are paying premiums for junk policies that turn out not to cover whatever medical problems they eventually develop. For example, we learned recently about a Blue Cross/Blue Shield policy that supposedly had maternity benefits. However, the maternity benefits didn’t cover the mother’s labor, delivery, or hospital stay, and a couple got hit with a $22,000 medical bill for the routine vaginal delivery of a healthy baby.

I’m not likely to ever need maternity benefits again, either, nor am I likely to get prostate cancer. But although there are a small number of conditions that are age and gender specific, the enormous majority of ailments in the world can strike anyone. Non-smokers sometimes get lung cancer. Long distance runners sometimes get heart disease. Young women sometimes get breast cancer. Ya never know. And because ya never know, it’s extremely stupid to pick and choose in advance what diseases or conditions your insurance does and does not cover.

What this is really about: The insurance companies want to separate people into low-risk and high-risk pools, because selling junk policies to low-risk clients is where the money is.

But in the doubletalk of the Right, consumer protection is painted as government interference. Shawn Tully of Fortune says the government wants to deprive you of the freedom to choose what’s in your plan. Righties seem to think people ought to have boutique insurance plans that only cover the ailments they are most likely to get, given their ages, genders and lifestyles.

But what happens when you develop a condition that’s not in your coverage? Oops, sorry, you’re not supposed to have heart disease at your age. You’re not covered for that. Is this not also a form of rationing?

I’ve seen this same “boutique” proposal from other conservative writers. There’s a dippy woman at the Manhattan Institute named Regina Herzlinger who wrote in the Washington Post last year,

In order for employers to get big discounts, they have to buy health care in bulk, offering just one or two basically identical plans to their employees. The result is consistent mediocrity. After all, how can Chrysler find a single health plan that works just as well for a 55-year-old diabetic with a bad back as it does for a 30-year-old triathlete who sees a doctor once every few years for a sprained ankle? Splitting the difference in these cases means that people do not get treated in the preventative or chronic-care settings that they really need.

How many ways does this not make any sense? First, it ignores risk pooling. Second, it ignores the fact that the triathlete will not be 30 years old and healthy forever. In fact, the triathlete could die of cancer next year, and the diabetic could live to be 90. Third, she seems to assume that the insurance companies are the ones directing the patient’s care, and not doctors. Well, that last one is too true.

The whole point of “not getting in between doctors and patients” is that whoever is paying for the care shouldn’t be second-guessing the doctors. In rightie world, it’s OK if the health insurance company kills you.

Newt repeats a pack of lies about Dr. Ezekiel J. Emanuel, already debunked by Alex Koppelman at Salon. He also wants to let people buy insurance across state lines, which I’ve written about in earlier posts. This would allow insurance companies to set up shop in low-regulation states and sell junk policies across state lines. According to the president of the National Association of Insurance Commissioners, Sandy Praeger,

Insurers will set up shop in states with few regulations and market low-cost policies to people across the country. These policies will offer minimal coverage and appeal primarily to younger consumers.

“It will be a race to the bottom,” Praeger said, and there will be “very few consumer protections. … You’ll have plans that don’t cover the benefits that people need. … And healthy people are going to buy those less costly plans, because they don’t think they need [the protection].”

That may be a good deal for young people who don’t have health problems, but it would probably become a bad deal for everyone else, Praeger said. The policies that sell comprehensive coverage would draw a sicker, older customer base, becoming more and more expensive.

The end result will be a segmenting of the insurance market into the “haves and have nots,” Praeger said. One segment of the market will become more affordable, but the other segment will become less so, disadvantaging those who need coverage most.

Rationing, anyone?

“This is a Third World country”

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There’s a presentation of What’s Wrong With America in the Los Angeles Times today. There are feature stories on this week’s Remote Area Medical (RAM) health clinic in Inglewood, near Los Angeles, that shine a line on pain and medical neglect. Several of the physicians and dentists who volunteered to work at the one-week RAM fair also volunteer to work in Third World countries. And they said that what they were seeing in Inglewood was just as bad.

Steve Lopez, “At Free Clinic, Scenes From the Third World“:

Stan Brock, who founded RAM in 1985 to bring medical care to Third World countries, told me that in 1992 he began getting requests to do the same work in the United States.

“I don’t have the answers,” said [Dr. Mehrdad] Makhani, the dentist who insisted I look closely at his patient’s ailing mouth. “I’m not a politician. But I have people here with infected teeth, gums, abscesses. I saw a lady bus driver who lost her job and she’s walking around here crying. Her tooth is infected, she’s in pain and she can die from this. This is disastrous. This is a Third World country and people need to come and see this.”

“The people we’re seeing here have teeth as bad as the people in the Upper Amazon,” said Brock, who used to tangle with wild beasts on “Mutual of Omaha’s Wild Kingdom.”

One woman had lived with infected teeth for a year; she had no insurance because she had lost her job. She needed two extractions and a root canal. The dentist who took care of her, Joseph Chamberlain, also had done volunteer work in Brazil.

“They have a nice system of public hospitals and clinics,” he said.

But don’t patients have to wait for treatment?

“Yes,” Chamberlain said. “But not like this. Not for a year.”

I already mentioned the Tzu Chi Foundation, an international Buddhist charity headquartered in Taiwan. Tzu Chi does a lot of medical relief work in impoverished countries around the globe. And now it’s here. I can remember a time when it would have been unthinkable for an Asian charity to come to America to help the poor.

Eugene Taw, an ear, nose and throat specialist with the Buddhist Tzu Chi Free Clinic in Alhambra, was one of many Forum volunteers who has worked in other parts of the world. Yes, he said, there are far too many parallels between the uninsured in the United States and the residents of impoverished Third World nations.

At the Forum, his patients included a diabetic amputee who had not been able to buy his medicine for months, a retiree who couldn’t afford an X-ray for a lung problem, and a 30ish female diabetic with a kidney ailment so serious that Taw called for an ambulance to take her to a hospital.

Kimi Yoshimo, “How L.A.’s massive free clinic event came together“:

It’s pretty profound, the scale of it, the human stories,” Manelli said. “Those things don’t show up on a spreadsheet.”

In all, an estimated $500,000 in care has been provided daily to patients granted appointments on a first-come, first-served basis. Despite the pace, hundreds of uninsured and underinsured people have been turned away. Organizers lament that they could treat more if additional dentists and eye doctors showed up to volunteer in the clinic’s remaining few days.

One woman said she had received an abnormal pap smear result a year ago but was unable to get further medical attention. And then there is “The trumpeter who couldn’t play because he’s missing two teeth. The mother who camped overnight so her daughter could get glasses.” As one of the volunteer doctors said, these things don’t show up in a spreadsheet.

But it gets better. In this same newspaper, in the editorial section, there’s an op ed by Newt Gingrich warning America that if the Democratic plans for health care reform go through, we could have rationing.

Wow. Imagine.

The fear of government rationing is based on the premise that once government has such power, especially the ability to control what is covered by your private insurance policy, it also has the power to deny and restrict.

Those defending the House legislation claim rationing is not in any of its versions, and though that is technically true — no one wants rationing — the unprecedented power this legislation would grant to virtually unaccountable government agencies is all but certain to lead to rationing.

See, in a Free Country, the power to deny and restrict belongs to insurance companies, not the government.

I’ve got more to say, but I have to leave for a bit. I’ll get back to this later.