At Work

Health care will NEVER be affordable

imageAmericans have a unique view of health care  They want it to be the best, they want it to be immediate, and they want plenty of it. They also want somebody else to pay for it or at least make it appear that way. Here are a few examples

😷 Many years ago I was reading our company newspaper and noted a story about employees in one of our divisions conducting fundraisers to help a fellow employee deal with health care costs for a very sick child with bills in the hundreds of thousands of dollars according to the article. The appeal was now going company-wide. At the time I was the Manager of Benefits and I immediately called the location and corporate communications and told them to stop the fund-raising and the promotion. Why would I do such a thing? Well, because employees were contributing to this cause when there were no medical bills to pay, no out-of-pocket costs, no limits on the amount that would be paid. This employee and all others were covered by a very generous (especially by today’s standards) health benefits plan I had designed. Nobody, even management, bothered to ask and the affected employee apparently had no clue about his benefits. It its health care, it must be a hardship.

😷 A similar situation happened in the town where I live. Someone started a fund for two children with medical bills in the hundreds of thousands of dollars. $50,000 was raised and put into the fund. People always want to help with health care bills. The fact was the children’s father was a union worker for a large employer that provided good health benefits and there were no bills to pay. My friends asked about the fund and were shocked when I told them I was not contributing … given the mother of the children was my sister.

😷 In another case my company offered several options for health benefits. One of them had a very low deductible of $150 and, of course, was the most expensive option. Over the years it became so expensive that it was silly to offer it any longer so we closed enrollment, but to appease the unions, current enrollees could keep the plan even though we committed to educating them about the money they were losing. We simply could not convince some people to take another option. There is an irrational fear of health care bills and this plan was perceived as the Cadillac plan.

One day an employee came to see me about the plan. I explained the other options and showed him that it was mathematically impossible not to lose money by staying in the old plan when you compared premiums and the maximum out-of-pocket costs for his entire family. No matter how much expense was incurred by any or all members of his family, he was going to lose several hundred dollars. I put is all on paper for him. “Now I get it,” he said and left my office happy. A few days later I saw him and asked if he had made the enrollment change. No, he said, I talked it over with my wife and we decided we need the “better” plan. Fortunately for him we eliminated his plan as an option the following year … but he never thanked me 😉

😷 Years ago routine immunizations were not a covered medical expense and neither was routine pediatric care. There was no illness and no large expense. During a period of concern over Lyme disease I received a call from the spouse of an employee; an irate spouse. She had just learned our plan did not pay for the Lyme disease immunization available at the time. She had three children and lived in a wooded area and wanted her kids vaccinated. I explained the plan and the logic to know avail. “Do you expect me to pay for these shots?” she screamed at me, “they will cost me $60.”  Any further discussion was hopeless, but before she hung up she told me she was going to hold me responsible for the death of her children from Lyme disease. Kinda of makes you wonder what was more important, $60 or her children.

Why won’t health care in America ever be affordable? Because people don’t think it’s an expense they should be paying. Since about the 1970s we have continuously increased the insulation from health care expenses for most Americans. We have changed the very concept of health insurance. It’s not insurance at all. (A $100,000 income family needs “free” birth control after all).

Back in the 1980s HMOs were all the rage and were sold via the myth of keeping patients healthy and promoted as having low or no out-of-pocket costs as long as you received care within the plan. Patients liked the idea of low-cost care and few bills to pay, but they also wanted the freedom to use the “best” doctors, not the ones who joined HMOs. Didn’t you know? The best always means the most expensive.

We have driven up the cost of everything in health care and driven down any reason for people to care. We have failed to make the connection between all the free stuff we want and demand and the premiums we are willing to pay and even those premiums we expect others to pay in whole or part.

Government helps in all this too. Our employer contribution toward our health insurance is tax-free income to us (the largest single revenue loser to the federal government). Our own employer-based premiums can be made on a pre-tax basis too (changing that would solve 11% of the Social Security funding problem). Then we have tax-free flexible spending accounts and health savings accounts to help insulate us from out-of-pocket health care costs and of course, you can reduce your income taxes if you have high medical bills. No wonder we think we have no responsibility for bills related to health care or that $10 a week for a prescription is unaffordable.

Now, as a result of the misplaced emphasis on premiums by politicians, Americans who still don’t see health care as a legitimate family budget item, are shocked by the trade-off between high deductibles and monthly premiums so the easy thing to do is blame insurance companies.

What exactly is “affordable” health care?

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