Anthem Blue Cross and Blue Shield: An example of adverse selection

[J.J. Kennedy]

I don't advocate one carrier over another, but Anthem is a business and we are free to choose their product or go to a competitor. And, I respectfully disagree that the issue at hand is about health insurance. The cost of health insurance is directly related to the cost of care. It is also directly related to the degree to which coverages are mandated. For example, in many states now a condition like Autism is a mandated benefit; if an insurer is required by mandate to cover autism, and that adds to their costs, they can elect to absord that cost of doing business or pass it on to their customer. Same thing with the increase in price of new medicines (or medications that are still on patent, and which pharma co's promote on TV), same thing with a 30% increase being requested by a hospital they are negotiating with. As a business, it would be hard pressed to absorb all these costs and remain profitable. These are only 2 examples, but there are lots. The health care "food chain" has a lot of players, and each one increases their prices and fees every year. And, while there are many, many, altruistic people in that chain, there are many people who know how to game the system --- insurance fraud is a huge issue and the cost associated with fraud is part of what is passed along to customers. As are the cost of litigation and related monetary awards paid in cases where complaints are warranted and in cases where they are not. In the case of physicians, there are just as many who become doctors because they want to help people as there are who choose the profession for the prestige and the expected income they'd earn. It remains to be seen how we feel about dictating what doctors can charge or how much they can increase fees each year. Doctors who want to computerize their records and use the latest medical technology also have to pass along the costs to them to do so -- or choose to absorb them. And, truth be told, you can take the salary of all the insurance executives, and even last year's total profit for one of those companies someone mentioned in an earlier thread, and it still wouldn't pay for health coverage for every American for one day.

I am concerned that there is no effort to to explain our situation in any detail. I can't agree that there is only one person not playing nicely in the sand box. It's just not that simple. I believe we are being fed a story that's easy to explain in a soundbite and has a villain we can point to, instead of really looking at the underlying issues and really trying to solve the problem. I don't believe we can solve this problem in a year. And I don't believe our representatives in Washington can craft a solution amongst themselves, without the input and participation of people embedded in the business of delivering health care start-to-finish. It concerns me, too, that no one has mentioned the deals struck to approve the bill -- labor is excluded from part of the bill? Why? There were agreements up fron for the pharma industry, the AMA, and even individual states like Nevada got deals for their votes. Why aren't public sector employees subject to the same cost of care measures that most of the rest of us are (who pay the taxes that subsadize their benefits) -- for example, if there is an effective generic drug available, shouldn't they be incented to use it? What are their deductibles like?

Are we asking tough questions even about ourselves? How do we feel as a society about paying into the same coverage pool as someone who smokes and drinks despite having diabetes? What about the people in that pool who don't stay on their medication or follow the docto-prescribed regimen and have to go to the ER? Do we all want to cover in-vetro fertilization or Viagra, and does anyone understand how the new Mental Health Parity mandate will affect our costs (not to say we shouldn't treat mental health illnesses)? It's clear that obesity is related to a lot of major illnesses. With the increase in obesity among our children we're seeing illnesses like diabetes and high cholesterol in kids as young as 12. It's not a coincidence that costs are going up -- more people need to see a doctor because they don't make good health/lifestyle choices. All these people are in our coverage pools. Do we want to continue to pay some of our premium to support the many, many, people with unhealthy lifestyles by choice? Keep in mind these are our neighbors and in some cases members of our families. And, no one has asked how many of the uninsured actually qualify for coverage under a state plan and either elect not to sign up or don't know they are eligible for coverage? These people don't get checked until their health is already compromised and so the cost to treat them is higher than if they were treated when they first had symtoms of an illness. They also use the emergency rooms more. If they cannot pay, the hospital absorbs the cost -- but in actuality all those unpaid services are charged to private insurance companies in higher fees (because Medicare and Medicaid can't help absorb those costs). Another cost that seems to disappear but ends up being part of our premiums.

My point; this is a complex problem and everyone has to look at how they contribute to it, and how they can drive change.

[Maineac]

Get a job in Government. Especially Federal. "Open Season" occurs all the time, where pre-existing conditions are accepted. And a good chunk of your premium is paid - or completely paid as mine was during a Federal employ stint out of state. And you and I that are self-employed get the shaft. And get to cover everyone else. Beautiful system.

[OutDoorNut]

Originally Posted by Acadianlion

What this means in terms of dollars is that a family of two adults and one or more children who are between 30 and 39 years of age will be paying ONE THOUSAND ONE HUNDRED NINETY FIVE DOLLARS AND SEVENTY SIX CENTS PER MONTH, if they have a $2500 deductible.

Of course, if they have a $5000 deductible, then their premium will "only" be $796.22 per month.

I would assume that most Maine families in this group will prefer the $15,000 deductible plan, the premium for which is a paltry $376.84. I am sure that there are lots and lots of young Maine families that have $15,000 lying around to use to pay incidental medical expenses.

If you think that's bad, down here in NYC, I'm paying Blue Cross $1,169 every month for just me--not a family--just me, one person.

About ten-years ago, I was paying about half that.

Fifteen years ago, I was paying about 250 a month.

Back in the seventies, I think I was paying something like $25 a month.

It's nuts!

[Maineac]

It's a profit driven business standing between a doctor and a patient, gambling that someone won't get sick and then figuring out ways to deny coverage when they do get sick. And there's the layer on the medical side that has to be paid for figuring out all the forms and filing insurance claims from doctor's offices. With all kinds of legislation that started in the early 1970's to protect the obscene profits of the insurers as well as the completely obscene salaries of the insurance agents and MBA's in the upper echelons of the organizations. Kinda like hospital administrators. They see the money doctors get paid, and they all feel they deserve the same pay. Life. It is what it is.

[Frostbite]

I recently had a conversation with a lodge owner in Maine about health insurance. He mentioned that because he was self employed there was no way he could afford to pay for health insurance. You were either getting health insurance from a large company that you might work for or you were a professional couch potato. There was no in between. He scared the heck out of me. I'm printing up the "I'll Work for Health Insurance" signs up now. I was watching a special on TV and they mentioned that Taiwan had the best health system in the world. In an interview it was mentioned that in Taiwan health coverage was a service. In the USA heath coverage was a product.

[maine4.us]

Of course you can. You rid yourself of all assets on paper, and just show up. They have to treat you, and stabilize you. All these years I have played by the rules, and paid my part. It is time now for me to use the system as 80% of people I know have. I had to go to the ER a few months ago. During the 3 hour period I was waiting, I was the only person who had an insurance card. I had a rude awakening. There is no sense at this time to keep your finances "on the grid." You take cash, and you bury it (not literally). The interest or dividends you might make will not cover the cash you will have to pay for a catastrophic illness. Since Maine requires insurers to take all comers, if you get ill, simply apply for a policy at that time. I am not certain, but I would think that pre-existing conditions would not be in place because of the must cover insurance in force in Maine. I came to this realization when I heard, from several sources, that each retiree needs about $250,000 in retirement funds to cover their medical expenses. While I am not in favor of government health care, we already have it to some degree.