The Failure of Private Health Insurance

I receive reports from the Commonwealth Fund virtually every week which demonstrate the poor state of health care delivery in this country. This week’s report, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families has received coverage in the mainstream media and blogoshere (here, here, and here). The study looks at purchasing private medical insurance and finds, “most adults who seek to purchase insurance coverage through the individual market never end up buying a plan, finding it either very difficult or impossible to find one that met their needs or is affordable.” Of course you can read the report for yourself. It would be more valuable for me to note the problems I see people having on a regular basis, which are consistent with this report:

Many people are unable to afford private insurance. Of those who do purchase, a large number are under-insured for one reason or another. Many have high deductible policies, which are increasingly common as part of health savings accounts. The problem here is that most patients do not want to spend money out of their own pocket, and see money in their HSA as their money which they are reluctant to spend. This leads to patients avoiding preventative care and routine care of chronic problems. This expense ultimately gets passed on to the taxpayers as the problems become expensive to treat years down the road when the patient is often older than 65 and on Medicare.

Many plans exclude coverage of pre-existing conditions. This makes sense from the point of view of the insurance companies who do not want someone to purchase their insurance two weeks before having that elective surgery they have been putting off for years. It is a major burden on those with chronic medical conditions which require treatment on a regular basis and cannot go without care for months.

Many plans do not include prescription coverage. Patients may make it into the office and receive prescriptions to treat them, but it doesn’t help them if they cannot afford the medications. I’ve also seen patients who have prescription coverage on paper, but their co-pay is so high that they are paying the bulk of the cost out of pocket.

Many private plans do not cover routine office calls. For many relatively healthy adults this isn’t a serious problem, but for those with the chronic medical problems I typically treat, lack of coverage of office calls is a major burden. For example, landmark studies in the United Kingdom have shown a considerable decrease in diabetic complications among diabetic patients who received intensive treatment, including frequent office visits, as compared to those receiving conventional care. The typical under-insured patient in the United States doesn’t even receive treatment at the levels of those in the “conventional care” group in the UK studies. As with those with high deductible policies, the consequences of this are seen years down the road, often when the patient is on Medicare, unnecessarily increasing costs at that point. It is far more expensive to treat a patient who requires bypass surgery, dialysis, amputation of a limb, or rehabilitation following a stroke than it is to prevent the complications with routine care.

While these problems are commonly seen with those who must purchase their own insurance, I am increasingly seeing patients with policies obtained through their employer which have the same limitations. To a growing degree, this is a problem which is affecting a large percentage of the population, and with the trends I am seeing even those who currently have good insurance coverage should not be over-confident that this will continue.

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23 Comments

  1. 1
    insurance says:

    I feel the reason we have poor health coverage in the U.S.A. is the fact so many Doctors are being sued. Which in turn raises the health insurance rates dramaticly. Wich in turn nobody wants to be stuck paying the bill. On that note just look at other countries that have lower lawsuit rates. You will notice alot of the health insurance policies are free thru their government.

  2. 2
    Henry Neufeld says:

    I would add the problem of complexity. Many people don’t understand the coverage as explained by the insurance company, and don’t realize what kind of out of pocket expenses they can incur during an illness. Frequently, they don’t realize this until they show up for a test or procedure and realize that the hospital or clinic wants a fairly large sum from them up front.

  3. 3
    insatiable yucca says:

    i find interesting the bit on patients avoiding preventive care and routine treatment. do you want to propose that it part of the purpose of public health to look after patients that are too lazy, stupid, or stingy to look after themselves? It appears to be true that the state knows better than patients, especially in medical cases, what is better for them; but the difficult question is whether the state should be allowed to make citizens receive care.

  4. 4
    Ron Chusid says:

    insatiable yucca,

    This has nothing to do with saying the state knows better or making anybody receive care. It is about enabling patients to have the choice to follow the advice of their physician should they so choose. Under the current system a tremendous number of people do not have that choice for financial reasons.

  5. 5
    Ron Chusid says:

    Henry,

    The complexity of the system is a major problem. Patients often get forms regarding preexisting conditions and have no idea what to do with them, and have no idea about their co-pays and deductibles.

    This article is on privately purchased insurace where people do have a choice in what they pick (although they still might not really understand what is being sold). The far more common situation is people who receive coverage through an employer with limited or no choice, and don’t understand what is and is not covered.

  6. 6
    Ron Chusid says:

    insurance,

    Malpractice is a part of the problem, which is why true malpractice reform was part of Kerry’s health care proposal, but only accounts for a small amount of the cost. The Congressional Budget Office projected that Bush’s proposals for caping malpractice awards would reduce insurance premiums less than half of one percent (0.4%) and the CBO found that malpractice only accounts for 2% of total health care expenses. With double digit increases in health insurance premiums most years, a reduction of 2% in health care expenses won’t make a tremendous difference.

    As a doctor I don’t want to disuade people from objecting to frivilous suits, but the truth is that only a small percentage of doctors face the bulk of the suits. This is a combination of the “bad doctors” and of doctors who are in high risk specialties. Malpractice reform is needed for the second group, but it won’t solve the overall problem.

  7. 7
    kj says:

    “patients that are too lazy, stupid, or stingy to look after themselves” sounds just like the people who thought everyone should get out of the 9th ward… as if they knew the levees would break. Of course, those lazy, stupid, stingy people might not be any of those things, but simply too poor to pay their doctor unless it’s an emergency, but again, what do I know, I’m just a liberal.

    Lord almighty. insatiable yucca really doesn’t want to know what I said to the guy in the produce section of Walmart
    when he loudly blamed the folks in NO for their predicament.

  8. 8
    kj says:

    Sorry for the negativity. I allowed that sentence to get my Irish up. :-\

  9. 9
    Ron Chusid says:

    The Irish weren’t up today.

  10. 11
    insatiable yucca says:

    kj, i didnt really get your comment, but god almighty im just a liberal too, what do i understand.

    the point i was trying to make is that just because us, as liberals, want to say that the state should not be allowed to prevent people from killing themselves if they wish to do so, so the state should not be allowed to treat people that dont want treatment

  11. 12
    kj says:

    Yucca, I apologize, but I’m still confused.

    Are you saying that (most) liberals say that the state should not treat people medically that don’t want to be treated? If so, I happen to agree.

    As for the above, I seriously took issue with the “patients that are too lazy, stupid, or stingy to look after themselves” comment. Maybe you were being sarcastic, and I missed it.

  12. 13
    insatiable yucca says:

    the “lazy, stupind, stingy” thing was to bring the issue to ignorance, which i think is the interesting part. because we want to say that people that are too ignorant to look after themselves are also the most vulnerable and the ones that we should help and upon which choices we should intervene. on the other hand, we dont want to deny their freedom and autonomy because they are ignorant. but we cant do both, can we?

  13. 14
    kj says:

    yucca,

    I get what you’re saying and double the apology for the snark above. I reacted to the words used, and not the content of your post.

  14. 15
    kj says:

    If I understand you correctly, you are saying that it isn’t the state’s place to intervene in a person’s medical care, even if the reason that person is ill is due to their own ignorance, or lazyness, or unwillingness to shell out money for health care.

    Is that close?

  15. 16
    insatiable yucca says:

    oh, no, it is the duty of the state to intervene. im only saying that in defending that duty – and, as good socialists, we should (i do anyway) – in defending that duty we should not pretend that we are not denying these individuals’ freedom and liberties

  16. 17
    Dave from Princeton says:

    Sorry yucca, aren’t any socialists around here that I know of.

    After reading your other comments and definitely after seeing that idiotic comment, I’d say it’s pretty obvious what you are…

  17. 18
    kj says:

    Are you saying that, for example, the state invervenes for the welfare and care of a child when the parent or guardians are not? Or the state intervenes in the care of the elderly?

    What about fully rational adults who deny health care, for their own reasons? The state has no reason to intervene with them.

  18. 19
    Dave from Princeton says:

    My last comment is stuck in moderation…

    kj, he’s saying he’s a drooler.

  19. 20
    kj says:

    I think we’re talking legalese here. As in “rights,” which will vary depending on whether or not the person is a legal adult, responsible for themselves, or anyone else who has an appointed guardian.

  20. 21
    kj says:

    Dave, thanks. JBK is off the computer and ready to watch something on Tivo, and I was wondering how long to stick around.

    BTW, where where you yesterday? Ron threatened to poison the entire Notre Dame team! With SPINACH! I had to use all my powers of being an ex-Catholic to dissuade him and save him from certain legal action by the powers that might be that are in charge of my personal pew in heaven.

    It was hard work. Sort of like the BoyG’s hard work.

  21. 22
    Dave from Princeton says:

    Ron was bluffing. That’s against his Hippocratic oath. Also, 47-21? Ron sure didn’t need to help MI any.

    My guess is God was sending a message to Catholics that he’s displeased by the Pope’s encouraging the Bush followers latest crusade and yearnings for Armageddon. He/she/it obviously punished ND to send the message.

  22. 23
    kj says:

    Dave, you’re probably right about God sending a message to Catholics via ND’s loss. I keep wondering what in the world my parents and all my numerous relatives are doing up in heaven anyway.

    They must be playing bridge and drinking “martoonies” and not paying a lick of attention to what has happened to their beloved Church. I mean, to go backwards from Vatican II is really something.

    (Of course my issues with the church go back to the first century, but that’s another story.)

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