Health Care Reform: He Said, She Said

Because I know not all of you, or any of you for that matter, read back through comments on this blog, I thought I would highlight an exchange from Your Health or Your Wallet? The "Choice" is Yours post from a couple weeks ago. I present to you a little "he said, she said" concerning health care reform....

He said:

One thought though... For CF'ers (and others as well) you aren't really buying health "insurance." Insurance is a bet, on your part and on the part of the insurance company. They are betting that the premiums they charge you, will, on average, be a larger amount than the healthcare they are obligated to pay for. You are betting that it will be cheaper for you to pay a monthly premium, just in case some huge medical bill occurs.

For CF'ers... it ain't a bet. You and the insurance company know there is absolutely no way you could pay premiums high enough to cover the cost of your care. So bottom line... you are asking other people to pay for care you can't afford for yourself.

I would much prefer an insurance system that functions as insurance, and find the best way to provide that as cheaply as possible. And then find a way to deal with those who are un-insurable. Rather than designing all kinds of perverse incentives into an insurance system, to deal with people who insurance isn't really the appropriate means to pay for care.

Some more random comments on the post above:

Strike all pre-existing condition clauses?

We don't demand that you be able to buy fire insurance to pay for the damages AFTER your house has burned down. Or flood insurance AFTER it is filled with water. Or car insurance AFTER you've gotten in a wreck. Or life insurance AFTER you've died. If we required the above, it should be pretty obvious that what you are buying is no longer "insurance" in any sense of the word.

So why do we demand that people be able to buy health insurance AFTER they have gotten sick?

As I said above, if you have a pre-existing condition, you aren't insurable in the true sense of the word. I'm not saying I know what the solution is for those with pre-existing conditions, but I do think that basically dismantling the insurance system to deal with those issues is the wrong way to go.

More random comments:

"fair pricing despite level of health"

I assume you mean by "fair" that all people pay the same price, regardless of their health?

Once again, compare this to other insurances you buy. Do people demand "fair" pricing for car insurance for someone with a perfect 10 year driving record versus the high school student who has been in 3 accidents already? Or "fair" pricing for life insurance for the 20 year old health nut versus the 95 year old chain smoker? Or "fair" pricing for home insurance for the $100,000 home versus the 4 million dollar mansion?

So why do we demand that all people, regardless of health status, pay the same amount for health insurance?

I know, I know... people don't always have a choice in their health status, while most of the above situations are a choice. But for those who do, I'm not sure I see why their shouldn't be a consequence for health choices. For those who have no choice in their health status... like I said, I'm not sure insurance is the appropriate vehicle for paying for health care.

"My choices in my care should not be made by my pocket book, but they are, all the time."

Not trying to be offensive, so if it sounds that way, blame it on the limits of internet communication...

Why shouldn't choice in health care be made (at least in part) by money? You make choices every day based on money. Where to live, how big your house is, what kind of car to drive, what kind of job to take, what to eat, how to entertain yourself, etc. Why should health care be any different?

In my mind, part of the problem with the current insurance system is that there isn't ENOUGH decision making based on cost. With most PPO type insurances, there is very little connection between what I pay, and how much something costs. I might only pay 10%, or a $20 co-pay, for something that costs far more. Of course, I am also paying for the rest of it, but through my premiums. There is very little direct connection between the value of a health service, and how much I pay for it.

I really think the HSA route is the way to go, because it has a huge connection between cost and value. We just switched this year, and I find myself constantly asking "Is what we are going to pay for this really worth it?" (just like I do for everything else I purchase.) I NEVER recall thinking that on our PPO. If people aren't asking that question, health care is only going to get more expensive, not less. And the public option makes even MORE of a disconnect between the cost and the value.

She said:

Few things that I feel like addressing:

1. Your analogy of other types of insurance is flawed in several ways. If all insurance was ran like health insurance, then we would have a lot of problems. Say that you had a small fire in your house five years ago. It caused no structural damage, few possessions were damaged, you didn't even use insurance money for it, but called out the fire department just to make sure your house was safe. Now five years later you buy a new home and want fire insurance. If they were like the insurance company, they could deny you because of your past history of fire. Or say, you are going to get car insurance. You've never had an accident and have a perfectly clear record. You expect to be covered without a problem. However, it seems your family members seem to crash into anything on the road, and off the road, and have several tickets. The insurance company denies you because of your family history of car wrecks. Both would happen if insurance was ran anything like "health insurance".

Also, not having fire insurance, I take a financial risk if something happens. Not having car insurance, I take a fiscal and legal risk. Not having health insurance? Not only is there a huge financial risk, but you are also risking your life. No other insurance is that true of.

2. Making decisions based on pocket book. Yes, I decide where I live, what I spend descresionary funds on, and how much I drive based on pocket book. But I can live in a cheaper house, not buy that shiny new computer, and drive a 10+ year old car... it's not going to kill me. But not getting drugs, going to the doctor, and millions of other things that are involved in health care very well could kill me.

3. I think of health insurance, or how I think health care should be paid for like the police, or the fire department, or like countless other services that my tax dollars go to. I haven't needed police help in years, but I'm very happy they are there if I need it, and I know that my community is a better place for it. My neighbor had a garage fire this week, that without the quick reaction of my neighbor and the fire department, I would have lost my own home. Again, something I pay for, rarely use, but am very glad they are there when I need it. I don't have kids, but I know that my community is better by tax dollars that go into their education, removing them from abusive situations, and helping them get vaccinated if they can't afford it. I've never been on food stamps, but I know that my community is better if everyone has something to eat. The same thing could be said about healthcare. Yes, I use it often, and many people out there wouldn't, but everyone's lives are made better by everyone having a chance at health. I don't understand how anyone could think differently.

4. HSAs are a crock. Spend a single day in a hospital and the $6,000 bill will eat through nearly every HSA account I've seen. Let's hope you don't need surgery, ongoing medication, or more than one day in the hospital... because not only is your healthcare money gone, but you also can't be insured again.

He said:

1) Sure, the analogy isn't perfect. But it is true that people are demanding things of health insurance that we don't demand of any other insurance we buy. And those demands transform it into something that is no longer insurance.

2) Again, I'll agree health care is somewhat different than other things you buy. Although where you live or what you drive could also kill you. My point was more that your comment implies you should be able to decide on your health care options regardless of cost. That isn't reality, just as you don't make any other decision regardless of cost. Which is why people argue that public healthcare always leads to rationing. Because when we don't pay for it directly (ie we make healthcare decisions with little regard to the true cost) we end up demanding far more healthcare than if we paid for it directly. We demand more healthcare than we can collectively pay for. And since the gov't controls the public option, they end up deciding based on the collective pocketbook. Which is exactly what many people are opposed to.

3) So did your neighbor have fire insurance, or did the fire department pay for all the damage caused to his house by the fire? The police only come to collect the evidence after the crime. They do nothing to reimburse you for the ongoing effects of the crime. The fire department shows up to put out the fire. They do nothing to pay for the damage your house suffers (in fact, that is why you buy fire insurance.) I would argue the healthcare equivalent to the police or fire department would be EMTs, which, oddly enough, already exist.

4) Our HSA is working just fine, thank you. And yup, one day in the hospital (which my wife already had this year) will wipe out your HSA account for the year. Which is exactly why you have an insurance policy connected to it. After her hospital stay, we had paid our deductible, and the insurance covers 100%. If I desire, next year I can switch back to the PPO that my employer offers, although I see no reason to do so. HSA's provide an incentive for me to actually attempt to save money, to consider whether the value of the service is actually worth what I am paying for it. It works exactly like insurance should... I pay for the little day to day stuff, but have insurance in case of an emergency. It's not a crock for us, and is actually working quite well so far, even with a major hospital stay.

Here's a great article in the WSJ with some excellent suggestions for how to reform the system, without going to single payer...

http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html

So, who do you think wins this one? The "he" or the "she"?

I love that they both took this opportunity to share their opinions. Thanks guys! If you'd like to share your thoughts and opinions on Health Care Reform please contact me for the opportunity to write a guest post.