Tuesday, August 18, 2009

Health insurance and the "free market"

The apparent loss of the public option in the health care debate has felt like a sucker-punch. To be sold out so casually by a group of rural Senators and the President himself reminds me of what I've thought for the last few years: that all Congress really wants to do is pass something that is at heart a placebo and puff up its chest about its great 'accomplishment.'

It's something of an understatement to say that I'm angry. But anger rarely solves anything.

Some of the fixes the President proposed in his Sunday NYTimes op-ed will be helpful, although they won't solve the problem of the uninsured. For example, ensuring that no one can be denied coverage due to medical history or pre-existing condition will be helpful, provided that these are not watered down. The current law, passed during the Clinton years, exempted insurers offering individual coverage to cherry pick their plan participants. And employers were also allowed to elect an option that exempted coverage for a year for new employees with pre-existing conditions.

So, too, will removing the caps on annual and lifetime benefit payments. We've had to insurance plan hop in part because we've run the risk on maxing out Robert's lifetime benefits.

Capping out-of-pocket expenses, though, is going to have to be made clear to me. What does Obama mean by that? Is he going with the insurance company version of this? Your typical employer plan already establishes out-of-pocket maximums for individuals and families. It used to be, a decade ago when I was launched unwillingly into the details of insurance policies, that the typical out-of-pocket max was $1,500 for the year for an individual or for a single family member. But let me point out that this annual maximum does not include non-covered items (even if medically necessary), exclusions (ditto), or prescription co-pays. The typical out-of-pocket max for a single family member is now $4,000.

My husband and I figure that we hit the max every year for Robert and spend another $3 to $4K on stuff that's medically necessary that insurance doesn't cover because the companies are run by corporate weasels. And our policy, because I work part-time and my employer's share is prorated based on the number of hours I work, our policy runs us about $8K per year. So we spend about $16K a year on Robert's medical needs.

As for Obama's big point about health insurance being portable in the event of job loss, job change, or a household move, well, if there's no public option, I don't see how that's going to work. Because COBRA doesn't allow that right now, at least not in an affordable way.

The Senate's looney idea to set up non-profit health 'collectives,' modeled apparently upon electricity collectives in North Dakota, cannot possibly solve those problems. Those collectives, if implemented, will go bankrupt within a year. People who join would pay in, but because a single serious illness has far higher costs than someone leaving their barn lights on by accident for a week while they're on vacation, well, a single serious illness would bankrupt any 'collective.' That is, something that works for rural, small population states is not necessarily going to work for large populations states with urban centers. Collectives might work in a low population area with relatively stable usage needs (in the case of electricity, for example), and a relatively stable membership.

I'm sorry, North Dakota is not at all representative of much of America. California is. New Jersey is. New York State is. Ohio is. Michigan is. I could go on. But North Dakota, Montana, Maine, and other states with tiny populations whose Senators are determining what's best for the people who pay the lion's share of the taxes in this country, while they might be picturesque places to live, are simply not representative of the United States. Perhaps, you could argue, no single state is. The small group of Senators who are hijacking the fate of health care for millions of Americans represent a slice of America, but a very narrow interest group. The figures I've seen suggest that the combined population of these states is 5 percent of Americans.

I grew up in a small state with a small population, Vermont, but I'd be the last to say that the interests and predilections of Vermonters are representative of the country as a whole.

And, perhaps, these Senators are not even representing the needs of their constituents. Isn't this really about re-election contributions from drug companies, hospitals, and insurance companies? States with small populations produce far lower total donations from constituents than do larger states. Thus, a reliance on PAC money and corporate donations. Running a Senate campaign anywhere is incredibly expensive. Television buys are a must in large states with small populations distributed over a wide area--and that's what costs the big bucks.

So the problem, then, is the electoral process. In the House, the problem with fair elections is the way the congressional district boundaries are drawn. Ever seen one? They look like 'spider' tumors, with feelers stretching out, narrowly, in every direction. In some districts, people on one side of the street have a different representative than their neighbors across the street. Sophisticated computer algorithms and marketing tools allow political operatives to cherry pick constituents and produce districts composed of up to 80 percent same party households.

In the Senate, there's a different problem with the electoral process. States with low populations tend to produce Senators who are unbeatable without major scandal because they've cornered corporate dollars, climb up the food chain in the Senate seniority system, and basically serve until they die. In addition, the state political machines are smaller, and there's less competition. Which means there are fewer hungry pols itching to run, and less turnover.

And this means that Senators from low population states hold a disproportionate share of Committee chairs for the major Senate committees. While the founders certainly wanted the Senate to enable a better balance between more populous and less populous states, allowing the Senate to be controlled by rural states because the Senate leadership can't figure out how to ensure a better distribution of power is not fair.

But it's also representative of a general weakness in the Senate leadership. If LBJ were still Senate majority leader, and he had a 60 seat, filibuster-proof majority in the Senate, he wouldn't be wringing his hands about not having enough votes to pass legislation, or letting certain Senators run renegade at the expense of the party platform. What healthcare shows us is that the Democratic Party has essentially failed, and progressives need to give up on it altogether. These people have been telling us, in both the House and the Senate, since they assumed control in 2006 that they can't do anything because there aren't enough votes. Me, I'm done hearing that.

So my family, and other families with disabled children and seriously ill family members, have to continue to suffer and flirt with bankruptcy because Senators from North Dakota and Montana have a bigger stake in insurance company campaign donations than they do in the public welfare, and because Harry Reid can't figure out how to knock heads, twist arms, and ensure a balance among regions of the country and various population centers.

I mean, come on, the insurance industry is hardly dealing with the 'free market.' They're as coddled and subsidized by Congress as the banks. They're sheltered from capitalism by the federal government, corporate welfare recipients who bite the hand that feeds them. They cherry pick whom they want to insure. They create nonsensical lists of exclusions. They fragment policies into riders to avoid paying for various components of injury and illness. They also cheat and lie because there is no regulatory oversight. They can get away with this because they don't have to be accountable to individual consumers--just to executives who buy policies for their workers. When you or I receive health insurance through an employer, we have no say in the policy, no ability to select the riders we want or need. And our government has made sure they don't have to be accountable to individual consumers in the individual policy market.

And the Senate Democrats are out to lunch, more interested in protecting the profit margins of their corporate sponsors--hey, shouldn't the Russell Building have its name changed to the Bank of America Senate Office Building? Or Longworth HOB to the Walmart House Office Building? I mean, they might as well start being upfront about it.

What would it mean for Americans to be able to receive health care, rather than health insurance? It would mean a healthier, more reliable workforce. It would mean that people would be able to change jobs. It would increase innovation, quality of life, enable people to nurture their personal ambitions--if only so many of us weren't scrambling for health insurance or crossing our fingers that we or our kids didn't get sick. People could work part-time if they needed to for family reasons, build their own businesses with greater security, enjoy self-employment. Wouldn't that be a shot in the arm to the economy? Aren't the above ideals what people identify most with as Americans?

OK--I'm on the Democratic National Committee (DNC) fundraising call lists. When they start calling again to try to get money out of me, frankly, I look forward to telling them that I've spent my money and continue to spend my money on my son's health needs, and, maybe, if they'd lifted a finger to really solve that, maybe then I'd have something to give them.

Oh, but wait. Anger doesn't solve anything.


Lisa said...

Yes, exactly. We've been sold down the river again. The DNC is a hollow shell at this point. Screw them.

About to start paying $1500 in COBRA costs every month. Again. We were hoping for/planning on the public option, but... yeah. By spring, E. or I had better find a job with benefits... two of the 3 of us are uninsurable, (one's just expensive). All told, we pay as much for medical costs as we do for rent.

And that's nothing compared to your situation, or that of anyone with a disabled family member. F&%$.

Elizabeth said...


what are we going to do, all of us?

Michele Renee said...

I just wanted to add for anyone who may be reading that Obama did sign into law on 2/17/09 that if let go of a job for any reason, the COBRA cost is 35% of what it would be normally. The Fed gov't will reimburse the employer the 65%. This of course only applies to those who had group insurance with a co. that has to comply with COBRA (over 20 lives employed). This is for COBRA start dates of 3/1/09. This is for 9 months of COBRA (not the full potential 18 months). Many employers and brokers have not fully informed those COBRA beneficiaries about this due to lack of knowledge.
I know this does not apply to your situation but maybe to the first commenter above?

Michele Renee said...

Forgot to add this applies to those who were terminated from employment and lost coverage on dates 9/1/08 to 12/31/09.

jeneva said...

Thanks, Michele, for the info! I know Lisa and will make sure she sees this!

jeneva said...

Thanks, Michele, for the info! I know Lisa and will make sure she sees this!

Lisa said...

Thanks, Michele! I should have made clear that my husband was able to negotiate a termination with his employer (he had to take medical leave due to post-concussion syndrome, and they kept him on leave for quite a while, so we've had great insurance in 2009 thus far). The employer has been great, even paying him a decent severance, and structuring everything so we do get the 35% for the 9 months, which saves us 1K/month during that time. (Just found that this was for sure this morning. Feeling *very* thankful.)

Now we have until May before we have to figure something new out - most likely the kid and I getting a catastrophic-coverage plan and assuming we hit the 5K out-of-pocket ceiling per year, and DH getting the super-expensive state-offered post-COBRA coverage. Yow. At least we could, theoretically, afford that situation. A good 80% of Americans couldn't. Sigh.