POLICY: Walmart and Ignagni show why we’re so screwed

So for the final post on the theme of the uninsured and how messed up our health system is, I turn to the pages of the New York Times which shows that the taxpayer (or as Don Johnson calls us — the "market customer"!) is trying to get WalMart to not dump the cost of its employees’ benefits onto the public.  Maryland just passed a bill aimed at Walmart and supported by Giant stores, a local grocery chain which does cover its workers’ health care costs, insisting on better benefits coverage from Walmart and employers like it. In California a not-dissimilar ballot initiative just failed last time and will come again this fall probably. While I’m not in favor of an employer mandate (or for that matter employers being involved in health insurance at all) it’s clear that Walmart benefits from being stingy to its employees while its competitors such as Safeway and Costco which pay better wages and give better health benefits make less money.

And as everyone joins in a race to the bottom, the number of jobs that have health insurance attached dwindles, and the number of those uninsured or falling on to the taxpayer’s plate increases. For those without insurance and not poor enough for Medicaid, the individual market beckons like a Siren attracting a ship onto the rocks. The individual market sucks, and for many  examples of how, see the comments to this recent post.

Part of the reason the individual market is such a mess is the the aggressive underwriting behaviors of the plans reprensented by Karen Ignagni at AHIP.  She has a letter in the NY Times today attacking Krugman’s column in which he opposed private health care.  It’s an incredible piece.  She manages to make more straight factual errors in three paragraphs than I would have thought possible. It’s so bad that that I actually wrote a letter pointing them out to the Times. If they don’t publish it I’ll do a longer version here next week. But her overall point is that what’s important is to debate some more…..anything than to solve the problem.

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  1. //You gadfly are taking money that could go to schools but you won’t get insurance because the American tax payer owes you something, you think.//
    I have no income. While the American tax payer goes running around screeching “don’t think society owes you anything”, I still don’t have an income. No income, no payout for insurance. It’s that simple.
    //Heck, $400,000 for your cancer gadfly could feed a lot of hungry children, at least think of them.//
    I agree. Though, I hate it when people play the “children” card. When I go hungry, no one gives a damn.
    //Matthew is proud you sound just like him.//
    I doubt Matthew would want to be associated with me to much extent, but I’m certainly proud if I sound like him. He’s earned my respect many times over.

  2. gadfly,
    You are the one who is uninsured and will dump your future cancer bills of $400,000 onto the backs of tax payers, not me.
    You gadfly are taking money that could go to schools but you won’t get insurance because the American tax payer owes you something, you think.
    Heck, $400,000 for your cancer gadfly could feed a lot of hungry children, at least think of them.
    It drives me crazy when people with $500,000 houses are so cheap they won’t put health insurance on their children. Some uninsured are really strapped like gadfly, because she has no job I guess, but some uninsured are rolling in the cash and are just tight wads.
    I’m sure Matthew is proud you sound just like him.

  3. //Are you saying these bills were not paid 100% after the deductible?//
    Nope – I’m saying you are using anecdotal evidence to support your argument, and hence it’s not persuasive.
    //This sounds like Matthew!!!!!!!!//
    Matthew is my hero. He does his research and furnishes rational, factually based arguments. He’s earnest and fair. Plus he has heart and a concern for the fate of individual human beings. If I were younger and better looking, I’d flirt with him and offer to have his baby. 🙂
    //My future prospects//
    I think you’re using Matt’s blog for free advertising.
    //own to only $150 a month, gadfly wants you to consider her #2 rant//
    Should the selfish and short-sighted people get annoyed, they will be vastly outnumbered by the armies of the uninsured.
    //if President Bush gave poor families $2,000//
    If President Bush is giving money away, why go through the inefficiency of making all these families deal with insurance salesmen? Why not just put that $2000 toward a health plan?
    //I will go really slow//
    Unfortunately talking slower will not magically transform you from a vacuum-cleaner salesman to a person with a well-founded argument.
    //I can expect the uninsured, like you, will team up in packs of 100 to haunt me?//
    If they don’t physically gather at your front door, you will certainly get the bills for them in terms of higher taxes and unmanageable stress on the national infrastructure. I.e., that extra dollar that goes to indigent services and prisons is not going to schools and libraries.

  4. gadfly,
    //1. What will happen when these people get sick? You get what you pay for.//
    I told you;
    1) I have a client will bone cancer right now.
    2) I had a client with ovarian cancer take 4 years to die.
    3) I had a client with a heart attack who quit smoking
    4) I didn’t say about a 17 year old in the brain trauma center 3 months last year.
    Are you saying these bills were not paid 100% after the deductible?
    // 2. What good does saving money on health insurance do when you have to pay out money to deal with all the people who are uninsured because people fell for the short-sighted, self-centered solution?//
    This sounds like Matthew!!!!!!!!
    Excuse me folks (My future prospects), as you consider dropping your monthly premium from $1,000 a month, down to only $150 a month, gadfly wants you to consider her #2 rant above.
    //3. The person only paying out $150 will thank you. The 100 uninsured people you shoved out of the way will COME HAUNT YOU.//
    Paul Krugman wouldn’t go that far gadfl, not the haunting stuff. Paul Krugman says if families can’t afford $1,000 a month for health insurance then they can’t afford to pay $150 a month either, they are too broke. And if President Bush gave poor families $2,000 a year to purchase insurance that only costs $1,800 a year, they still can’t afford coverage. And Krugman would say that the President also giving the poor a $1,000 federal deposit in their HSA, tax free, is not enough because they don’t save as much on income taxes with HSA deposits as rich people in the highest income rate would. So HSAs are discriminatory and only benefits the rich.
    And John Edwards would say, “Hey, HSAs only work for millionaires.”
    gadfly, I will go really slow. If you are saying when I save a young family $850 a month on their insurance that I can expect the uninsured, like you, will team up in packs of 100 to haunt me? That is the most lunatic post I have ever read, bar none.

  5. //people paying $1,000 a month when I switch them to paying $150 a month//
    The two questions are:
    1. What will happen when these people get sick? You get what you pay for.
    2. What good does saving money on health insurance do when you have to pay out money to deal with all the people who are uninsured because people fell for the short-sighted, self-centered solution?
    3. The person only paying out $150 will thank you. The 100 uninsured people you shoved out of the way will come to haunt you.

  6. Sue,
    President Bush just got an HSA with the Federal Government’s program and there was no medical underwriting. I have said that there is no medical underwriting on an HSA application. It’s you two that keep saying there is medical underwriting for an HSA and then say it’s so terrible. Is that specific enough for you Sue?
    And yes, sick people would love to pay their deductibles with tax free dollars from an HSA too. It’s only common sense so don’t listen to Paul Krugman, he doesn’t have a clue. Paul is correct when he says group health employee plans annual cost is over $9,000 a year per family. Larry at the Heinz Family Foundation projected this cost to be $25,000 annually by 2010. That’s why I advertise that many families have HSA insurance for $200 a month and then they grow their savings in a tax free HSA and become prepared for retirement health care costs because just the RX deductible and Out-Of-Pocket (OOP) is $7,200 annually per couple with the new RX program in Medicare.
    A 30 year old couple with 2 children in lansing is $150 a month. If the wife is 5′ 7″ and tips the scales at 220 pounds the premium goes up to $170.64 per month. If she ever gets down to 204 pounds the rating comes off and the premium drops and NEVER can be put back on.
    Or if the husband smoked we would rate that too and the premium would go up to $176.86 per month. However, if he ever quit smoking the rate up would drop again, never to go back on.
    Sorry gadfly, I know you don’t like rate ups but that’s the way it is. This is individual insurance which is medically underwritten. I tell people paying $1,000 a month when I switch them to paying $150 a month, “You know there are people that say it’s not fair your premiums are so low.” They usually say, “Hey, I need the money to buy food and diapers for my baby.”

  7. Ron doesn’t want a debate. Any time specifics are mentioned he changes the subject. Read three of his posts in a row and the contradictions are amazing–like the switch on whether or not underwriting is involved in HSA insurance.

  8. //Sue, excuse me but I would not take your advice on health insurance. You knowledge base is small but you are stuffed full of opinions.//
    In what universe? Sue seems to be doing an impressive job at pulling out the facts, as opposed to to dealing out old quotes for pure sensation value.
    *I hope Jeb runs in ’08.*
    Good Lord, I hope not. *makes sign of cross*

  9. Sue,
    I was enrolling tax free MSAs (Now HSA) since the first day, 1/1/97. This is way before President Bush ran for President. I went to the first Presidential debate for W. in Ames, IA, my home town. Forbes had HSAs on the cover of his book but he came in behind George W. in the voting, along with 9 other suckers running.
    President Bush had only 10 minutes, like all the rest and he started with; I believe in more options, more choices, more freedom in Medicare, including HSAs.” That was music to my ears Sue. My wife calls herself a Reagan Republican but I call myself a Bush Republican.
    I hope Jeb runs in ’08.

  10. Rush would never tout HSAs because he realizes that with his much publicized use of painkillers that he is uninsurable in the individual health insurance market and won’t be able to get qualifying insurance. There are a lot of conservatives who become liberals on healthcare reform when underwriting practices are discussed. If President Bush had a clue about what HSAs do to guys his age with rated conditions he wouldn’t be touting them either, but I’ll bet Karl Rove doesn’t let him watch television or read the papers. He has become the most out of touch president I can remember on the issues of the common man.

  11. Gadfly,
    I advertise on Rush but he refuses to discuss Republican health care reform and the tax free HSA.
    President Bush says tax free HSA in every speech including the State of the Union. Then Hannity, Rush and O’Rielly refuse to discuss it, darn liberals pretending to be conservatives.
    I know Rush’s HSA quotes and they are pathetic.
    President Bush says, “Become empowered with a tax free HSA.” Rush would never say that.

  12. Sue,
    I do not use Golden Rule because they don’t have a dependent conversion priviledge for children. I did say their rates are online. Golden Rule and my company had most of the market share on MSAs (name before HSA) and my company wrote the first one. My agency enrolled three out of the first five tax free accounts in America. The insurance industry was against HSAs Sue, so you are a bit confused.
    The first month, January of 1997, I enrolled a client and he saved $7,000 a year in premiums. Then he had a heart attack and he quit smoking so his premiums went down. After all these years his family premiums just went over $300 a month. He is married and over 50 years of age. Lucky he met me because he owns a gas station and his previous coverage was a group plan tied to him owning the station. Now he can sell his station and keep his coverage.
    Sue, excuse me but I would not take your advice on health insurance. You knowledge base is small but you are stuffed full of opinions.
    I always end my commercials with “Medical Underwriting is Required.”

  13. //Speaker Hastert says, “I figured out the difference between the two political parties talking to Hillary about HSAs. Hillary said, “No, No, NO, HSAs put to much money in the private sector.”//
    Ron, you keep repeating the Hillary quote as if it were an argument. Just now I realized it isn’t even a Hillary quote – it’s a Hastert quote, i.e. hearsay probably further warped for the sake political positioning. Is this a technique you learned from Rush?

  14. Ron,
    I went to three sites offering HSAs including one of your recommendations: Golden Rule. ALL have significant verbiage outlining underwriting procedures and making it very clear that pre-existing conditions can be excluded from coverage. The portability I’m discussing relates to the ability of a rated consumer to leave one HSA insurer and obtain insurance from a different provider, not the ability to keep the money in your savings account. Because there is no portability protection as guaranted by HIPAA for group insurance, it is possible that a rated person might not be able get insurance from a different provider if some reason (like increasing premiums) was making them switch. For the rest of you that want the TRUTH, go to Yahoo and type in Health Savings Accounts. Go to any insurer listed and look at what they have to say about underwriting. Also, look at that range of plans (not all offer 100% options, some also include 80% programs). Look at exclusions for maternity and notice that there is little or no cap on rates. I’m making very specific points related to fine print I’ve encountered in shopping for insurance. Ron has gone from vague generalizations to outright distortion of the truth. HSAs can give you short-term premium relief, but they aren’t a total solution, particularly for those of us in middle age. Group insurance can be continued through association plans in addition to employer plans, and HIPAA protections prohibit group policies from applying pre-existing condition exclusions. Many states also offer high risk pool coverage to people deemed uninsurable by individual plans. As consumers it is very important to consider the pluses and minuses of any plan and no plan represents a perfect solution. It is unfortunate that insurance salesmen like Ron just want to herd people into a plan without a candid discussion of risks and benefits. It is even more criminal that HSAs are being presented as the perfect solution to lull the American public into lack of debate on health care options because they don’t address the issues that middle-aged, middle class Americans with rated conditions face relative to finding insurance. I encourage everyone to read the fine print and write President Bush about what he isn’t saying on HSAs (since he’ll never have to use one, he probably doesn’t know–especially if folks like Ron are writing his briefing notes). We need a robust debate on this topic, not tired rhetoric that hides the issues aggressive underwriting creates.

  15. Sue you said:
    //My research into HSAs and other individual health plan options shows the follwing:
    –You have no portability protection between plans ((Of course this is hogwash because HSAs are completely portable, it’s the law for goodness sakes.)
    –HSAs with strict underwriting limitations could be a very reasonable option, but simply advocating that these people jump without portability protections or limits to current underwriting blah, blah blah…(First, there is no medical underwriting on HSA applications. Second, I spend $500 a minute on radio saying, –Group health plans terminating sick employees health insurance after a short COBRA is WRONG. Reaganomics means; trickle down saved by citizens, tax free, in their HSAs is RIGHT—
    It’s weird, I advertise on Rush radio and none of the Republican callers have any clue about President Bush’s Tax Free HSA after all these years, it’s sad.
    Speaker Hastert says, “I figured out the difference between the two political parties talking to Hillary about HSAs. Hillary said, “No, No, NO, HSAs put to much money in the private sector.” The speaker says, “A bell went off.”
    Look at Goofy Canada,
    If HSA insurance in Lansing is only $150 a month, think how cheap it would be for a young family in Canada. I bet the cost would be cut in half because doctors make much less there. Canada’s Single Payor system is called Medicare. My goal is to bring down Medicare in Canada and market Tax Free HSAs north of the border using electronic enrollments.

  16. theorajones’
    I said it was illegal for a senior to purchase insurance after the age of 65 that will cover the cost of RX and you said that Medigap plans had a little bit of coverage. I said name the maximum benefit and you refuse, ha ha.
    Medicare patients can spend thousands a month on RX and the “best” Medigap plan didn’t even cover $5,000 a year. The law will only allow Medigap plans that won’t pay for this huge expense. Yes, in the land of the free, regulation outlawed coverage to cover a large RX expense.
    Thank goodness President Bush got the Medicare RX bill signed because that is the birth of the HSA.
    Rick is correct that Michigan has a plan for uninsurable people and some states don’t. Michigan Blue Cross has 70% of the citizens insured. Is 70% considered a monopoly? And Rick, are Doctor visits and RX covered expenses on the Blue Cross non qualifying plan? This plan doesn’t cover drugs 100% after the deductible like HSA coverage do they?
    So if a Michigan citizen had a stroke and couldn’t work anymore could he keep his group health employee plan and move to sunny Florida and palm trees? Or is this citizen required to live in the land of the tundra to keep his Blue Cross of MI.?
    Wouldn’t it be better to have individual health insurance form a company that will allow you to move to 43 states and keep your insurance?
    Group health insurance is dangerious. President Bush said, “Own your home, own your health insurance and own a piece of your own Social Security.”

  17. Ron,
    First you seem to be confusing some of my posts with the posts of others. Let me clarify my position.
    First, I have not ever worked for any insurance company (group or otherwise). I’m a middle-aged consumer who has been discovering the challenges associated with keeping coverage in this mess we call an insurance market as I have transitioned from corporate life to starting a small business.
    Your position appears to represent the following:
    –Consumers should be lured to insurance products where advantages are highlighted and the negatives are never mentioned. Anyone who attempts to mention these potential negatives should be labelled uninformed.
    –Government regulation is very bad and increases the cost of insurance because it forces insurers to actually insure consumers who use health care.
    –Group insurance is bad even though it has more consumer protections for “rated” consumers than are currently available for individual policy holders.
    –It is better to provide a policy to a consumer with large, indefinite pre-existing condition exclusions (in other words a blank check for claims denial) than to regulate insurers in ways that force them to be reasonable in underwriting practices.
    –You are overwhelmingly in favor of insurance products which increase consumer liability for a greater percentage of health care costs over time and strip them of any government protections their previous insurance group membership should have entitled them to.
    –You are comfortable with the idea that large percentages of Americans may become permanently uninsurable or better yet pay premiums for policies which have such broadly written exclusions that 80% of their claims are rejected as uncovered expense.
    My position is:
    –Government regulation is the only reason I have health insurance. I’m in an expensive group plan offered by a professional association that I found after going through my COBRA options. Belonging to this association costs $25 a year and is based on my professional experience not tied to a specific employer.
    –Once I migrate to individual insurance I open the door to pre-existing condition exclusions that may keep me permanently uninsured because the government-mandated portability provisions limit group insurers’ ability to exclude pre-existing conditions.
    –My pre-existing has existed my entire life and never cost a dollar in health care. My older relatives who also have hiatal hernias are not experiencing any major medical expense even their 80s. In short, my rating is a classic example of insurance industry underwriting paranoa and should serve as a warning to aging individuals about to enter the individual insurance market.
    –My research into HSAs and other individual health plan options shows the following:
    –You have no portability protection between plans.
    –There appear to be no limitations on amount of premium increases (other than what the plan chooses to guarantee).
    –Individuals can’t be cancelled, but the entire pool can be at the insurance company’s discretion. Note that with no portability protection, if this happens rated individuals are potentially uninsurable.
    –Unless government regulated, individual policies have unlimited ability to underwrite broad exclusions with no time limit. In your HSA examples, 100% coverage is 100% coverage of covered expenses. Aggressive underwriting can ensure that covered expenses is a very limited concept. As an example, my individual policy underwriting included an indefinite time limit exclusion of any health expense related to my entire gastro-intestinal tract because a doctor has confirmed the presence of a hiatal hernia.
    –Note that all HSA plans have the same underwriting requirements found in individual plans and many HSA insurance plans also completely exclude maternity benefits to help further reduce premiums. That means you aren’t just paying the deductible you planned, but all the expenses associated with pregnancy plus any pre-existing condition care costs underwriters want rate. Wonder if the family of four in Michigan understands how much it will cost to become a family of five.
    Let’s look at Ron’s wonderful world of health care in the next decade:
    –Many families who adopt HSAs find themselves tied to a plan with steadily increasing premiums that they must pay because a rated condition makes it impossible for them to change plans–or worse if they drop that insurance because they can’t afford the premium and can’t find a new qualified insurance plan that will accept them, they lose their ability to shelter the money as a tax-free hedge against medical expense.
    –Underwriting becomes more sophisticated and begins to use genetic screening instead of trusting people to disclose conditions. This allows for more and more of the cost burden to be shifted to consumers years before the condition generates cost.
    –Insurance industry advocates like Ron successfully kill any Federal or State attempts to make it harder for insurance companies to continue to stack the deck against rated consumers, because the public at large fails to understand that insurance companies are shrinking their liability and eliminating consumer options and protections. In a market with zero consumer protections, low cost teaser premiums skyrocket in spite of the actual cost burden being shifted to the consumer through the large deductible.
    I still believe that with consistent Federal regulation, insurance companies could develop products that insure all U.S. consumers without going to the scenario of single payer government-run health care that everyone wants to avoid. As long as the government and insurance companies keep the debate on the extreme examples vs. looking for a compromise that allows relatively affordable to access to all we are going to have a problem. HSAs with strict underwriting limitations could be a very reasonable option, but simply advocating that people jump into these programs without portability protections or limits to current underwriting practices will actually create more uninsured over time.
    Ron, my agenda in participating in this blog is really simple. I want to make sure that we consumers continue to have a wide range of health insurance coverage options. I have a good income, pay a fair amount of taxes and actually believe in individual responsibility–but I’m not stupid and I don’t like the trends I’m seeing in today’s insurance market. Proponents of greater freedoms for insurance company underwriting try to make those of us calling for sanity in the market look like a bunch of malcontents, but we are actually the sanest people here, because we aren’t waiting until the economy crashes and our taxes increase to raise the issue. Your plans lower your company’s costs and your consumers’ short-term premium cost, but long-term raise societal costs and your consumers’ out-of-pocket expense. Plus it creates a captive market with limited buying choices over time.

  18. Ron, you’re killing me. So, you’re saying that medigap individual insurance for those over 65 wasn’t so much ILLEGAL as it was lousy.
    Which, you know, kind of undercuts your argument about the individual system being so fabulous. Especially when compared to a universal public system.
    Fact is, the new Medicare drug benefit, appallingly bad as it is, is still better for most seniors than what they could buy before on the individual market. Unless you’re suggesting that George Bush did old people a terrible disservice by getting rid of private individual drug coverage in Medigap and replacing it with a government-run drug plan…
    You know, it’s truly bizarre that you’re framing the only policy choices as between a screwed up-individual market or a screwed-up employer market. Personally, I think Americans are smart enough to find a better solution. We’re innovators. And if a public universal system would solve all these problems and be cheaper…I don’t know about you, but I’d prefer not to limit my options.

  19. Ron,
    Michigan is a high-regulation state to begin with. If premiums are low where regulations are high, what conclusion are we to draw?
    Michigan also has a designated insurer of last resort, Blue Cross Blue Shield of Michigan, which many states do not.

  20. Sue you sound like a group health employee plan salesperson.
    My client with bone cancer is a male 50 year old doctor who can’t work because he had a stoke in his initial surgery. Tell us Sue, what happens on a group health employee plan when the client becomes unable to continue to work, a 30 hour required per week eligibility rerquirement. Poor, sick, young women patients, with no hair, are cut from the group plan and put to a short COBRA for insurance termination.
    Then you say that an individual insurance plan can terminate coverage for nonpayment of premium, well yea.
    Group Health Plans terminating sick employees’ insurance is unethical.
    We take thousands of calls from desparate sick people, on the last month of their COBRAs, and group health plans are terminating them. Do you have any advise for these people Sue?
    Sue if a single 27 year old woman got ovarian cancer would you prefer her to be on individual insurance or a group employee health plan if she couldn’t work anymore, you’re so-called 30 hours a week.
    Group salespeople will say anthing to make a buck.

  21. //Chances are your client is contributing to raising his “pool’s” rates because his disease is costly.//
    My family had insurance through a small, rural community college when I was growing up. I remember what happened when one of the teachers was diagnosed with breast cancer. The cost of insurance went up dramatically for a people whose salaries were low in the first place. At the college there was endless grumbling about the teacher that had made everyone’s insurance go up. I remember thinking at the time that it was horrible that everyone was angry at this woman at a time when she most needed help and emotional support. This was over 20 years ago. It’s depressing to think that the same thing would probably happen in the exact same way today. 🙁
    I also just saw an old movie called The Visit (with Ingrid Bergman). It tells a most unsettling tale about how people can convince themselves that the most egregious crimes against humanity are actually the moral and right thing to do. It made me think of the woman with breast cancer before I even saw Sue’s post.

  22. Ron,
    The reality is that your client with bone cancer and individual health insurance better pay every premium on time, because while he can’t be individually singled out for termination, he has no HIPAA protection with an individual plan and if fails to meet plan conditions may have difficulty ever getting insured again. With group insurance HIPAA prohibits exclusions for pre-existing conditions as long as you maintain coverage when switching plans. With individual insurance if you switch plans, no insurer is required to provide insurance and can exclude anything flagged as a risk by your questionnaire. And while the individual plan can’t raise a person’s rates, the entire pool’s rates can increase and rates can be adjusted by age category. Chances are your client is contributing to raising his “pool’s” rates because his disease is costly. One other thing, there was probably fine print in his insurance application that says if he failed to answer his health questionnaire truthfully that he may be liable for cancellation of his insurance and potentially all claims paid for his care by the insurance. If that insurance company can ever document that he filled out that application incorrectly when signing up for the plan, he could get an ugly surprise and a costly disease may motivate them to examine his questionnaire responses more carefully. Individual insurance isn’t any more protection than group insurance if you have a rated condition and in some cases it represents far less protection because once you are in an individual plan you have no portability protection should you have to leave the plan. Once again you are highlighting the positives of individual insurance, but failing to discuss the potential negatives. All plans have pluses and minuses. Healthy, young people have a wide range of options. Older people with rated risks gradually get squeezed out of the system. Any insurer that wants to rid themselves of an expensive pool need only raise the pool cost beyond the reach of clients and many do. There is no requirement that cost increases be justified and no external appeal process to an individual insurance company’s underwriting practices. Phrases like “he can never be singled out for termination” sound good, but they are no protection given the range of legal options insurance companies have for thinning the herd of sick clients. I’m not crazy about my overpriced group insurance, but at least it covers me completely and I have the opportunity to switch to another group plan with no pre-existing condition exclusions. That would not be the case had I taken individual coverage. The real solution needs to be a system where high deductibles actually counterbalance rated risk so that even individuals with rated risk can be fully insured (the piece missing in your HSA puzzle). There also needs to be an accountability factor that sanity checks underwriting processes so that clients who don’t actually have a pattern of high cost aren’t being punished for imagined risk. Other insurance products reward clients for managing costs even after periods of high claim activity.

  23. //depression and cancer is a deadly mix.//
    I, too, wish people would figure out that dumping more stress on the gravely ill just makes the situation worse.

    Matthew these people need true information
    Montel Williams says his MS medication is $1,500 a month. Why don’t you please tell us the maximum annual benefit of Medigap plans H, I and J.
    I didn’t say employers should put insurance on select employees and leave everyone else to rot.
    I said if a Michigan employer has three full time employees the employer can not purchase low cost individual health insurance for them. It’s the same in IA, NE, FL, IL and many other states.
    These laws were passed in the ’90s usually titled Small Group Reform. I hope this answers your question Harvey.
    I had a client that died after four years of ovarian cancer. She was too sick to work. I also say;
    Group employee health plans single out sick women, because they can’t work 30 hours a week, and put them on a short COBRA for insurance termination. This is very depressing and depression and cancer is a deadly mix.
    I currently have a client with bone cancer and he can’t work either. Thank goodness he has low cost individual health insurance because now he can’t be singled out for termination.

  25. //It is already illegal for an employer to purchase low cost individual insurance on an employee.//
    I think Ron might mean that it’s illegal for an employer to single out an employee and only give that one health insurance. He also seems to arguing that purchasing individual insurance for every single employee is cheaper than “overpriced group insurance”. Or he might be arguing that employers could save money by providing health insurance as a bonus to select employees, and leaving everyone else to rot…

  26. Harvey:
    Apparently, Ron’s found a law that says, “If you want to pay your employees extra money so they can buy health insurance on their own instead of buying them health insurance through your company, you can’t do that.”
    Wonder where the cite is.

  27. It was “illegal to purchase health insurance, over the age of 65, that covered RX”? Um, Medigap, which is purchased by individuals, had at least 3 policies that covered prescription drugs (I think plans H, I, and J).
    Of course, as of next year, it’s illegal for new Medigap policies to include RX coverage because Bush’s new drug bill won’t allow it…
    And sorry, Ron, I never said the individual market wasn’t losing share relative to emloyer-based plans. I have no idea if it is or isn’t. I did, however, point out that it’s a deck chairs on the Titanic issue so long as the number of uninsured is increasing overall, and you’ve never refuted that.
    You’re obsessed with who’s winning: employer-based plans or individual-based plans, and you keep ducking the fact that a substantial number of people are locked out of BOTH the individual and the employer-based systems because they can’t afford to pay because they’re too sick or too poor. And you don’t seem to understand that this has consequences for all of us.
    You keep pointing to the wonderful opportunities open to a healthy family in Michigan–but if insuring healthy families were the crisis in healthcare, then we wouldn’t have a crisis in healthcare. Providing healthcare to healthy people is cheap and easy. Becuase, you know, they’re healthy! This is common sense.
    Unfortunately, there are the sick people who need healthcare, too. And it turns out that if they can’t get insurance, it quickly becomes everyone’s problem: they use care really inefficiently; go bankrupt; die horribly; suffer needlessly; and drive up the cost of care for everyone as hospitals and other providers try to recoup the losses they incur in their inefficient treatment of these folks.
    Because our health insurance system is not universal, everyone pays more money.
    Not to mention that there are associated costs to a non-universal system: the fear of losing affordable insurance stifles entrepreneurship, insurance companies’ rational business attempts to avoid taking care of the ill cause great human suffering, fragmentation of the system stifles clinical innovations in continuity of care (especially IT), etc.
    These things are bad. They need to be fixed. Or do you think they’re not a problem?

  28. Ron:
    //NAZIs and yes they had a single payer system that you advocate//
    I don’t think Sue was advocating a single payer system that’s made financially viable by slaughtering part of the population. However, that seems to be what *you* are advocating. You just don’t think your responsible for suffering and death if you don’t personally throw the switch.

  29. Ron:
    You said: It is already illegal for an employer to purchase low cost individual insurance on an employee. By law, employers must purchase overpriced group health insurance plans.
    Where is that, and what law makes it illegal?

  30. Ron,
    The real big lie is that the insurance market has to operate the way the it currently does and that more regulation must equal less available coverage. If every state adopted regulations that required affordable, basic (perhaps not as comprehensive as we are used to) insurance with minimal underwriting restrictions, insurance companies wouldn’t cease to offer health insurance. They’d adapt and come with products for the market (particularly if their government underwriting business was at risk). The problem isn’t that regulation is bad, it is that inconsistent regulation motivates insurers to cherry-pick their markets. Note that drug companies don’t refuse to supply Canada because they have price controls–they just charge U.S. consumers more because we don’t and lobby for regulations that limit consumer ability to shop across the border now that their dual pricing strategy is evident to U.S. consumers. Wal-Mart and Home Depot have horrible supplier terms. They decided to take cost traditionally absorbed by retailers and force it down to their supply base. Companies still compete to supply Wal-Mart and Home Depot because of the total volume of outlets they represent and their popularity with consumers. They in turn forced cost down into their supply base. In short, two large retailers reinvented supply base management and cost structure and the market adapted by eliminating waste and in some cases accepting lower profits in exchange for higher sales volume. Product line companies have accepted market shifts and margin variability as a market dynamic for years because consumers drive a lot of price points. We need to recognize that uninsured and underinsured people are a problem that needs to be dealt with and we need to create a system that addresses that. And Ron, your HSA argument would be a lot more viability if you were using an example of a family with 40-something adults with “rated” medical conditions vs. the young and healthy or people with undisclosed medical conditions who “slip under the wire” and get coverage before their conditions are documented. The cost of health care for the uninsurable doesn’t go away. It is still be absorbed through our economy by others (taxpayers, health care providers, financial services companies) at a higher cost at some later time. The reality is most insurance companies don’t like the idea of a regulated system that reduces profits to levels that other industries in consumer-driven markets with true competition have had to accept years ago. Group insurance is bad because it actually has HIPAA guarantees that say when a person continues coverage (i.e. is paying into a pool over a period of time) they can’t be risk-excluded for changing pools. It kind of ties to that antiquated insurance idea that a portion of the pool pays in more than they spend and is entitled to benefits when they actually incur cost after years of payments. In the individual market, insurers can take your money when you are healthy, raise the rates of the entire pool so that as you age you look for new options, and then exclude you when you try to change pools if you have any identifiable risk. It is called churning and it is illegal in life insurance, but not in health insurance because there is no assumption that the premiums you pay today should credit toward their future liability for benefits paid to you later on. They can’t target you personally, but they can target your pool and then get “you” when you drop the pool. We need to address that. One option could be an HSA and compatible 100% coverage insurance with no underwriting restrictions. After all, consumers are covering the first $5K in cost every year, which eliminates most of the cost liability paid by the insurer on the majority of their insured.

  31. theorajones,
    I was just correcting you when you said the individual health insurance market is losing market share, that’s wrong, sorry.
    The National Socialists were called NAZIs and yes they had a single payer system that you advocate, you’re a hoot too.
    Matthew is correct that insurance carriers just left the States of WA and MA and now there is much less competition and higher prices with the remaining monopolies.
    Individual HSA health insurance is $150 a month for a 30 year old family of 4 in Lansing, MI and state employees’ family insurance is over $1,000 a month.
    It is already illegal for an employer to purchase low cost individual insurance on an employee. By law, employers must purchase overpriced group health insurance plans that employees lose if they get too sick to work. Ask Matthew, he knows. This is one of the reasons small employers don’t offer coverage.
    So, for those of you that want to make individual insurance illegal, in the land of the free, you’re half way there, congradulations.
    Exactly like it was illegal to purchase health insurance, over the age of 65, that covered RX. Don’t hear anybody here saying, “That’s not right to cut old people from the herd and make it illegal for them to purchase RX coverage.”
    Individual insurance would be gone today but regulators couldn’t figure out how to take it away from the self employed. Now we have these low cost examples of $150 a month for coverage that pays 100% after the deductible to $8 million for families in MI.
    So the “Big Lie” is that group coverage is cheaper than individual. It’s called propaganda.

  32. One of my pet peeves about Ron’s perspectives on individual irresponsibility is that people do get sick and allowing the insurance industry to only insure those with the lowest risk only solves part of the problem. Perhaps the insurance industry would like it a little better if we just adopted the Nazi concepts of building camps to house and exterminate the sick and the weak, not to mention the idea of genetic screening to create a master race. We could gene test everyone and put those with potential medical conditions out of their misery years before they started making health care claims. The current process of refusing to insure them (or gouging them on premiums for a few years before dropping them), then letting them go bankrupt and die is so time-consuming and inefficient. Plus if we put the sick and the weak in camps we could use them to perform low cost labor while they were still well enough to work and the businesses that used that labor would save on both wages and benefits. Think about how much we’d save in tax dollars and insurance premiums and there would never be lines in ERs. Better yet, let’s go back to those great 60s movies Logan’s Run and Solent Green….if we kill everyone at 30–imagine how low our medical costs will be. Of course, insurance execs will scream when their numbers come up, but it’s their fault for aging. After all, they currently blame the sick and weak for not finding the right program to allow themselves to stay insured. God forbid that profits should suffer simply so an insurance pool could cover both well and sick people. The reality is that employer programs, some state programs and government programs manage to cover all categories of risk. There is a solution, but it will cost more than many of would like to pay (both the insured and insurers). But failing to find a solution has a cost too. Higher taxes, more misery, lower productivity, missed opportunities, economic downturns….The point I and some others have been making in all our posts is that if we fail to deal with this issue, it will eventually be a great enough problem that we will be forced to deal with it. If we spent as much energy on this as we are spending on social security reform, feeding Terry Schiavo into perpertuity and banning gay marriage, it would be solved by now. I don’t know who I’m voting for in the next election, but it will definitely be someone doing something about health care, not the other issues. And if those of you in the insurance industry don’t like being compared to Nazis read some history. The arguments you make for why it is acceptable to underwrite the sick out of the system, are surprisingly similar to arguments made by the proponents of cleansing the German race of all but strong Aryan stock. Keep in mind the Nazis didn’t just kill Jews, they also rounded up the mentally incompetent, handicapped, gypsies, etc. because those people were considered burdens on the State.

  33. //makes it easier for people to start entrepeneurial ventures.//
    This should be what the free market is all about. Most of my problem with conservative arguments is that they don’t acknowledge that most people are not independent: they are at the mercy of employers, landlords, etc. At this point in modern civilization, very few people can live directly off their own labor, farming for food and hunting wild game. The closest a person can get to independence is to own their own business, but the start-up costs are prohibitive and legal/tax issues are intimidating.
    I think a lot of resentment of immigrants is not about the drain on social services. I think the real issue that no one wants to admit is that the same American values that encourage independence discourage pooling of family resources. It seems to be easier for immigrants to start small businesses. Often these businesses are successful precisely because they sacrificed individualism – female family members are exploited as free labor, other immigrants are hired under the table, siblings provide professional services, etc. It’s stressful to think that the American Dream is on a different track from American Values.
    I hope this doesn’t sound xenophobic or anti-immigrant. I think generous immigration policies are essential to fostering a progressive and cosmopolitan way of life. However, there is a patriotic cultural identity related to being American. People want the cultural identity they are proud of to also be economically tenable. If immigrants are more successful precisely because they circumvent those values, it’s distressing: and furthermore, it suggests the values our ancestors fought for will ultimately be pulverized by the Darwinian grinder.
    My suspicion is the Politics of Values and all the punditry against Political Correctness is mostly displaced frustration over the current conflict between the values of personal autonomy and reality that financial independence is more likely if you throw out those values. It seems like petty sour grapes to gripe about friends and fellow taxpayers who are providing the bedrock services in our communities, so people just aim their anxiety at easier targets such as illegal immigrants who are supposedly getting a free lunch somewhere. I bet if you could read the mind of the average conservative pundit, you would actually see some petty irritation about a colleague who was able to start a business or buy a house because their family was from a culture where resources are pooled and funneled toward the oldest son, etc.
    The only reason I’m bringing this up is that I don’t think Don Johnson’s remarks about immigrants are just a red herring in the health care debate: it’s just an irony that he’s focused on illegal immigrants leaching services when the HSA concept, which is supposed to be “good enough” to move voters away from a universal plan, will probably mostly benefit immigrants with small businesses. I think David Williams remarks about easing the way for individuals (as opposed to extended families) to pursue entrepreneurial ventures are a lot more useful.

  34. Sorry, Ron, the uninsured are expanding.
    Who cares if the individual market is expanding if more and more people are locked out of insurance altogether? (“My god, we’re on the Titanic and it’s sinking!” “Yes, but more importantly, everyone is jumping over the side, so we’re finally able to get into their rooms for a thorough cleaning.”)
    And, um, your food card idea is…strange and pretty hysterical. I mean, this should be obvious but food isn’t like healthcare, so the best solution for one may not be the best solution for the other.
    I think it’s especially loony in light of the fact that most liberal ag policy folks would like to lower domestic ag subsidies and trade barriers, thus making food cheaper. They tend to think less government intervention in the market will do a lot to fix the domestic (and even the global) hunger problem.
    You’re making up nonexistent food policy to defend current health policy–it’s a strange way of arguing.
    On the other hand, I would like to congratulate you if your goal was to show how good you are at screaming, “they’re all commies! crazy commies! don’t change anything because I make money in the current system and that’s the most important thing even if people are dying! And they’re commies so you should be scared!”
    This is what we’ll be up against as we try to improve the system to a more efficient one that provides care for everyone, and I do appreciate the preview of what speical interest talking points will look like when mouthed by partisan cronies.

  35. And while David is right, typically this type of legislation has made individual insurance unprofitable and made carriers likely to leave the state. The Washington example is instructive, as is Aetna’s recovery — both examples of the impact of underwriting both ways.

  36. One of the nice things about living in Massachusetts is that it’s possible for an individual to get decent coverage. When I left a big consulting firm to start my own practice I was worried about getting health insurance. But it turns out that all the major players (Harvard, BCBS, Tufts) offer individual policies and they are only allowed to consider zip code and age –not health status– when pricing. I pay roughly the same for coverage as my employer paid (although for an HMO rather than a PPO.)
    In general I consider myself a free market advocate. But this government mandate in Massachusetts makes it easier for people to start entrepeneurial ventures.

  37. //Food Security Card (FSC)//
    Are you suggesting there should be food insecurity? That food should be optional? That those pesky people needing food will come out of the woodwork? Prepare to pay out of pocket for the bulldozer to remove all those dead and dying people whose presence is stinking up the neighborhood and bringing down property values.

  38. Graham is right,
    We need a single payer system for food too. Food is even more important that health care. Everybody could get a Food Security Card (FSC) and when they went to the store just whip out the card and everybody else would have to pay for our personal food.
    Everybody would eat a lot better that’s for sure, including my dog.
    One big group of everybody could get really low prices too, so everybody wins.
    In the richest country ever known it’s crazy we don’t already have a single payer food system. At the very least we need employer mandates on purchasing food for their employees.
    Let’s make those Food Security Cards work when we go out to eat too.
    Americans did reject Hillary’s health care system and it cost the Liberals both Houses of Congress and the White House.

  39. Love Ignani’s lies! “Americans decisively rejected a single-payer system.” Funny, I didn’t know that’s what the Clinton health care plan was. Otherwise, I probably would have supported it more.
    Matt’s right. It’s a race to the bottom. Why should any employer maintain coverage for their employees, when they can just dump them all onto the states’ health care systems?

  40. Exactly, Ron.
    Cheryl has a job and can’t get either employer or individual insurance. Our current insurance system–both employer-based and individual–is so dangerous.
    As you pointed out, we can see by the increase in the number of uninsured that people are leaving the employer-based and individual markets. Unluckily, though, this means they can’t access medical care and/or go bankrupt when they’re sick.
    Hopefully, the political pressure will increase and we’ll have a more efficient universal system that guarantees no one is excluded because of preexisting health problems or inability to pay. Hopefully sooner rather than later.

  41. Exactly theorajones,
    Cheryl probably had a group health employee plan and when she was fired she automatically lost her coverage. Employee insurance is so dangerious.
    Lucky employee group health plans lost 1.3 million people last year. They are losing 4% market share per year so they won’t be around much longer.

  42. LOL, “get insurance before you get sick, it’s pretty simple.” And I guess the rest of that statement is, “and if you could please suffer and die a little more quietly, that would really be less annoying than the whining you’re doing.”
    See, the problem isn’t a screwed up insurance market that systematically discriminates against the poor and the sick, the problem is that people like Cheryl Smith (profiled in the Times article), who pulls down a killer salary of $20k annually, can’t do simple things!
    Cheryl, you idiot, you should have continued the COBRA coverage from your last job. What’s that, you worked for a church or a small business with fewer than 20 employees, and weren’t eligible for COBRA? Well, you should have gotten an MSA 10 years ago before your husband got sick! What, they didn’t have them then? Well, you should have had regular insurance. Or catastrophic insurance. Wait, what’s that, you did but you were late on a premium payment because you had high out-of-pocket costs one month, so they dropped you? No, sorry, I misunderstood–10 years ago, you lived in a state where insurers could experience-rate premiums, and your premiums went up to $15k a year when your husband got sick, so you irresponsibly dropped your coverage. Well, you should have thought about maybe someday getting sick and checked out the insurance laws before you chose to live in that state!
    See, Cheryl, the health insurance market is really very simple. The problem is that uninsured people are just lazy and stupid. I guess you’re going to have to take your punishment now.

  43. Underwriting is the reason the Individual Insurance market sucks? That is a very odd statement.
    Does underwriting make individual life insurance a mess too?
    What life insurance company will issue a million dollar policy to someone with ovarian cancer?
    Get insurance before you get sick, it’s pretty simple.