From: chased@rbbb.Eng.Sun.COM (David Chase)
Newsgroups: ba.politics
Subject: Re: Health insurance stuff
Date: 16 Dec 1992 20:23:06 GMT
Organization: Sun
NNTP-Posting-Host: rbbb

In article <92350.50349.J056600@LMSC5.IS.LMSC.LOCKHEED.COM> J056600@LMSC5.IS.LMSC.LOCKHEED.COM writes:
>In <1992Dec15.175426.3957@island.COM>, Guido Marx writes:
>> ... Overall, I believe that
>>making primary care cheaper would help to reduce total health-care
>>costs.  The experience of our health insurance carrier bears that out.

>I'd agree.  Part of the problem is that the people who benefit from health
>insurance don't pay much for it.  The costs associated with it are hidden to
>its consumers.  Only when free market principles are introduced can we expect
>people to cut back on their consumption of health care.  Even if it's only
>$5 here and $10 there, we are at least paying for a bit of the care which
>will reduce demand for routine/unnecessary services accordingly.

I'm a little mystified, in that the start of this thread had something
to do with employer's whittling away at insurance provided to
patients.  The health plans that I've been on so far worked more or
less like what is described above -- there's often a deductible and/or
a percentage that is not covered.  So, on that end, the consumer has
some incentive not to consume.  On the other end, employers that
purchase group plans from insurance companies can act as consumers,
purchasing the plan that gives them the best deal.  At least one
insurer that I worked with also negotiated deals with "preferred
providers".

That is, there is some market behavior going on here, but it is
apparently not working.  I note (according to the World Almanac) that
13% of the people in this country don't have medical insurance.  If
costs are rising at 15% per year, what we pay next year (in unadjusted
dollars, but inflation is low) would have covered that 13% this year.
(You can also view this as adding something like $100 to a $600/month
insurance bill -- it's a noticeable bite.)

As far as the incredible efficiency of private enterprise goes, when
our son was born his mother's hospital expenses were covered at 80% at
a preferred hospital, but the ob/gyn was not a preferred provider.
80% of the 20% remaining was covered by secondary insurance, up to a
$2000 limit for pre-existing conditions (i.e., pregnancy -- a
lifestyle choice if there ever was one).  The child was covered at
80%, but not at the preferred rates (Birthday rule chose the second
insurer above), but the 80% of the 20% that remained was covered by
secondary insurance at preferred hospital rates.  When all the dust
cleared, I think our net was $50 (I think they paid us too much, but
it was impossible to untangle exactly who thought they had paid what
percent of which rates.  I tried.), minus the money spent to keep the
primary insurance alive to cover the pregnancy.  However, before any
of the bills were paid, the hospital called to inform us that
insurance covering my wife (that which we had specifically paid for)
was claiming (incorrectly) that she was not covered.  My former
employer corrected them on this.

Now, I suppose that a government plan could do worse than this,
but nobody I know from Canada, England, or Scandinavia has a story to
match that one.  Friends from England (who live here now) describe
their national health plan as "pretty much like Kaiser".

Note that a large part of this foolishness was due to coping with
multiple insurance companies, which in turn arose from rules about
coverage of pre-existing conditions.  The "solutions" I see are

(a) national health (socialism!!!  Boo, hiss!)

(b) buy insurance privately (separate from your job) (how is this
    better, given that group rates obtained by employers are usually
    lower?)

(c) require some sort of baton-passing rule so that if you
    leave one insurer and go directly to another, then pre-existing
    conditions must be covered to at least the minimum coverage of
    the two plans (thus, no need to double cover).  (This is what
    I'd propose if I were very cynical and wanted the middle-and-upper
    classes to vote for me.)

Are there other solutions?

David Chase
Sun
Newsgroups: ba.politics