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Article > On health care costs
Description :: The unhealthy triangle between insurance, healthcare professionals, and their clients.
I work for and insurance company, as a programmer analyst. Generally, we try to acquire a deal with doctors and hospitals by which we pay 70% of the original charges. We are payer of last resort, so that's applied to what's left of the bill after other insurance companies (with their own rates) have been asked to pay in turn. Sometimes, we just settle for medicaid/medicare rates. That's good enough for us.

I'm also self-employed as a contractor; I pay my own health insurance costs as I receive no such benefits from my employer. What do I get for what I pay? So far, I have yet to receive a single penny back from insurance. That's not surprising, I'm usually rather healthy. In the last year, I've caught a slight sniffle once. My girlfriend, however, is prone to more sniffles than I am. Because of our high deductible (in order to be able to afford any insurance at all) she has yet to see insurance pay on her doctor visits. Going to see a doctor in the U.S. costs her somewhere between $60 and $120 depending on the area: she pays that out-of-pocket. For comparison, consider that during a trip in Europe, she paid $20 for a normal visit (also for sniffles) at the local doctor's office. No insurance was explicitly involved; as a U.S. citizen, she had no claim to local state insurance. And let's not allow the myth continue by which European (actually, all non-U.S.) doctors are claimed to be untrained or incompetent. If it helps, you may find that quite a few of them trained (and got their degrees) in the U.S. before returning home, charging patients less than their stateside counterparts. And they still seem to afford nice cars.

What's disturbing about the article referenced here ("Why Hospitals Overcharge the Uninsured") is that they fail to explicitly mention that healthcare providers specifically increase the price of their services so that these special rates can still bring them money. Don't worry: none of the doctors we contract with are going to starve because we pay them 70% of their advertised price. Far from it! They will, however, make even more money off of those who pay their medical costs out of pocket: up until my deductible, I pay 100% of the charges. After the deductible, I pay 20% -- but of what? Of what the insurance company accepted, or the charges I would have paid, while the other 80% of my bill are sent, with a price-reduction, to the company I hire to pay my medical costs?

Again, it doesn't matter. I won't see any payments by my insurance anytime soon, as I'm rather healthy. (Well, honestly, I'm not ill; but I don't get as much physical activity as I should: I am a programmer after all.) But what would happen if I were suddenly terribly sick? Ah! I can't afford not to have insurance. The rates I'd be charged, without insurance, would surely send me into bankruptcy at the first sign of cancer. With insurance, I could look forward to being locked into whatever insurance carrier I originally had, as no others will pick up the tab if I switch to their rates.

Health insurance is not like car insurance. Or home-owner's insurance. Or anything else -- they know that sooner or later, you're going to need them. They're not there to protect you from random freak meteorites hitting your house, or a bad driver not hitting the brakes in time. Unlike auto insurance, they are a part of every health transaction in your life: does your car insurance pay for tire rotation? No! Your mechanic doesn't feel like he needs to inflate the price in order to keep a stable income from insurance companies. You pay the same fee anyone else does (or less, if you buy him a beer.) Health insurance is designed such that, one way or another, you'll pay for those services. Neither hospitals nor insurance companies are out to lose money. If you're healthy, you pay for the health of others. If you don't want to do that, or if you only see a doctor at normally-scheduled intervals, you'll pay hyped prices. If you're chronically sick, you can look forward to the cost of your policy changing as you receive care, with little hope of changing carriers. And don't forget that most likely, there's an absolute cap on the amount your insurance will pay for you. As I recall, they won't pay more than 3 million dollars on me, for my entire lifetime, no matter how sick I am, or how available (despite cost) care may be.

Anybody got suggestions? Not allowing deals would be nice, but the cost would be passed on to you via increase health insurance costs... [more to be added later]

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Owned by Unordained - Created on 07/24/2003 - Last edited on 09/04/2003

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