“Without health care, people are one step away from financial ruin,” intoned our president over and over again. His rationale was that an estimated 45 million people were without health insurance.
Instead of devising a plan to provide coverage for the uninsured, the Democrats enacted a 2,300-page law that completely disrupts the existing health insurance of millions, which President Barack Obama repeatedly assured us would not happen. His message to them now is that their “junk” insurance needed to be replaced by a much more expensive plan.
Unfortunately, we have a president who doesn’t distinguish the difference between health care and health insurance. They are not the same thing. Whereas he constantly talks about his desire to provide health care for everyone through the Patient Protection and Affordable Care Act (ACA), the draconian regulations that are being imposed will in many cases have the opposite effect.
Like everything else it does, government intrusion into health insurance has caused prices to escalate far more rapidly than the cost of other goods and services over the past 50 years. While other factors have contributed to that cost, government's constant meddling is one of the prime culprits.
The primary purpose of insurance is to provide a safety net against large financial expenditures. While people generally complain about insurance companies and the “obscene” profits they make, the fact is that insurance is one of the most heavily regulated industries, and profits are rarely made through premiums. Almost all profit is generated by the float, which is the investment income generated during the time difference from when premiums are collected and paid out in claims.
Until government-sanctioned HMOs were instituted, health insurance policies rarely covered doctor bills unless they exceeded a certain amount annually. The cost to visit a doctor was relatively low, and most patients were able to afford it. In order to compete with HMOs, insurance companies began to offer this coverage with a small co-pay. Most people would probably have been better off without the coverage.
Medicare, which had preceded HMOs, had already required doctors to accept payments that were lower than their usual fees, and payment was often slow. The difference was recouped from private insurance and patients without insurance. Doctors would prefer to do away with these additional overhead office costs, and it would benefit their patients.
The policies that the ACA requires include such things as contraceptives, abortifacients, maternity care, various health screenings and on and on. Many of these coverages are what is known in insurance as “trading dollars.” In other words, the amount of premium charged is almost as much as what it would cost if you paid for it directly.
However, when it is included in your premium, you are charged for it whether you use it or not. The way the government has chosen to keep the costs somewhat reasonable is to increase deductibles and slash reimbursement rates.
The first will cost the patients more unless they qualify for government subsidy (most middle-class families won’t). The second has caused many doctors and medical institutions to withdraw from these plans. Many doctors are leaving the profession and others are setting up a concierge type of businesses where you pay a monthly fee just to be able to use their services.
If your automobile insurance included collision coverage, but the insurance company would only reimburse body shops at a rate that was below their cost, you would find it difficult, if not impossible, to find anyone to repair your damage. You would have insurance coverage for repairs, but limited availability to have the work done.
This is what the ACA is doing to health care in this country. In one fell swoop the president has managed to seriously impact the viability of both the health insurance industry and the health care industry, and at the end of the day, 30 million people will still be without insurance.
Not exactly the kind of result that was hoped for when he was elected and then re-elected to office.
Kenneth Laub is a Rock Hill resident.