Some Ideas on Controlling the Cost of Health Care

[Guest]

IMHO, we have driven the cost of healthcare too high in the United States by:

1. Making it ‘free’ or nearly so, especially for those on Medicare (that includes me).
2. Needlessly increasing the price of drugs by lawsuits for known side effects.
3. Not having a loser pays to discourage frivolous lawsuits.
4. Failure to have interstate competition for health insurers.
5. Requiring Insurance companies to provide ‘all inclusive’ plans rather than plans meeting the individual customer requirements.
6. Failure to have ‘high risk’ pools in all states that can provide coverage to those with previously existing conditions.

Item 1: Anytime anything is free or inexpensive, more of it is used. This applies to medical care as well as everything else. Today, if you are on Medicare and have a supplement going to the doctor, the ER, the hospital, etc. is essentially free. As a result, people seek care (eg. a visit to the Dr. for a cold and wanting to get antibiotics). Having reasonable copay could discourage this. Some ideas, $25 for a primary care Dr. visit; $50 for a visit to a specialist; $50 for a visit to an urgent care facility; $100 for an ambulance; $100 for an ER visit and $200 for a hospital stay.

This would be applied to households with an income of $35,000 per year or more thereby charging two-thirds of the population and leaving the lower income households untouched. Similar ideas could be applied to insurance plans for those under sixty-five.

Item 2: Drug lawsuits. Any drug that is capable of healing will also have side effects. When you get a drug, you are warned of the possible side effects. Drugs go through extensive testing to determine both the benefits and possible damages from them and are released to the market only when it is determined that the benefits outweigh the risks. If you take a drug and it helps you, so much the better. If you take a drug and encounter one of the identified side effects, then this is risk that you knowingly took and the Pharmaceutical companies should not be liable for your loss anymore than GM should be responsible for your injuries if you get in an accident. You accepted that risk by driving.

Item 3: Frivolous Lawsuits: Today, lawsuits can be brought for virtually any mishap, perceived or real. This is why you see the many ads for law firms saying call us, no cost to you if we lose. Far too often, it is less expensive for the insurance company being sued to provide an out of court settlement than it is to go to court. One example – I was involved in a low-speed accident a few years ago – the speed was so low speed that there was less than $500 in damages. Everyone went away and three weeks later the driver decided he had ‘whiplash’. Final settlement, $18,000 plus legal expenses. I can provide numerous other examples including one by an attorney you see on television virtually every day, but I believe all of you are familiar with the problem.

Item 4: Failure to have interstate competition for insurance plans. Today, insurance providers need to be approved by state regulators who determine which companies can compete and what they may charge. This is a too cozy relationship and invites higher premiums. By opening up to interstate competition, prices will come down.

Item 5: Requiring plans that cover virtually everything – many of those coverages added by special interest groups. Let people choose the coverages they want and are willing to pay for. Some may want Chiropractors, Acupuncture, contraception, fertility treatments, Viagra, zero copays, etc. covered. Others may not. Let those who want these things covered, pay for their plan. Let those who do not, pay for their less expensive plan.

Item 6: Failure to have ‘high risk’ pools in all states. Everyone should be able to purchase health insurance. By creating high-risk pools, everyone will be able to purchase health insurance. Some low-income people may need to be subsidized, but everyone needs to have some skin in the game.

These are just my ideas, anyone wish to comment?

[Guest]

IMHO, we have driven the cost of healthcare too high in the United States by:

1. Making it ‘free’ or nearly so, especially for those on Medicare (that includes me).
2. Needlessly increasing the price of drugs by lawsuits for known side effects.
3. Not having a loser pays to discourage frivolous lawsuits.
4. Failure to have interstate competition for health insurers.
5. Requiring Insurance companies to provide ‘all inclusive’ plans rather than plans meeting the individual customer requirements.
6. Failure to have ‘high risk’ pools in all states that can provide coverage to those with previously existing conditions.

Item 1: Anytime anything is free or inexpensive, more of it is used. This applies to medical care as well as everything else. Today, if you are on Medicare and have a supplement going to the doctor, the ER, the hospital, etc. is essentially free. As a result, people seek care (eg. a visit to the Dr. for a cold and wanting to get antibiotics). Having reasonable copay could discourage this. Some ideas, $25 for a primary care Dr. visit; $50 for a visit to a specialist; $50 for a visit to an urgent care facility; $100 for an ambulance; $100 for an ER visit and $200 for a hospital stay.

This would be applied to households with an income of $35,000 per year or more thereby charging two-thirds of the population and leaving the lower income households untouched. Similar ideas could be applied to insurance plans for those under sixty-five.

Item 2: Drug lawsuits. Any drug that is capable of healing will also have side effects. When you get a drug, you are warned of the possible side effects. Drugs go through extensive testing to determine both the benefits and possible damages from them and are released to the market only when it is determined that the benefits outweigh the risks. If you take a drug and it helps you, so much the better. If you take a drug and encounter one of the identified side effects, then this is risk that you knowingly took and the Pharmaceutical companies should not be liable for your loss anymore than GM should be responsible for your injuries if you get in an accident. You accepted that risk by driving.

Item 3: Frivolous Lawsuits: Today, lawsuits can be brought for virtually any mishap, perceived or real. This is why you see the many ads for law firms saying call us, no cost to you if we lose. Far too often, it is less expensive for the insurance company being sued to provide an out of court settlement than it is to go to court. One example – I was involved in a low-speed accident a few years ago – the speed was so low speed that there was less than $500 in damages. Everyone went away and three weeks later the driver decided he had ‘whiplash’. Final settlement, $18,000 plus legal expenses. I can provide numerous other examples including one by an attorney you see on television virtually every day, but I believe all of you are familiar with the problem.

Item 4: Failure to have interstate competition for insurance plans. Today, insurance providers need to be approved by state regulators who determine which companies can compete and what they may charge. This is a too cozy relationship and invites higher premiums. By opening up to interstate competition, prices will come down.

Item 5: Requiring plans that cover virtually everything – many of those coverages added by special interest groups. Let people choose the coverages they want and are willing to pay for. Some may want Chiropractors, Acupuncture, contraception, fertility treatments, Viagra, zero copays, etc. covered. Others may not. Let those who want these things covered, pay for their plan. Let those who do not, pay for their less expensive plan.

Item 6: Failure to have ‘high risk’ pools in all states. Everyone should be able to purchase health insurance. By creating high-risk pools, everyone will be able to purchase health insurance. Some low-income people may need to be subsidized, but everyone needs to have some skin in the game.

These are just my ideas, anyone wish to comment?

BBQ....I salute your post and commend this post.

I am certainly not well enough versed to respond at this minute but will be doing my homework for sure.

It is nice to see a post that addresses a problem and asked for feedback.

GREAT JOB...

[Guest]

I'll vote for you if you run. Nice job. Makes sense.

[Guest]

nice post....I just wonder if you can come up with thesewhy can't our reps do the same. I fear they are all bought and paid for by the various special interest groups.

[Guest]

Wayne, I believe there is more than a little truth in your post. You may want to look at this thread: Does it Make a Difference Who is Elected?

[Guest]

BBQMAN.....I am surely out of my element but hope to learn a lot from this thread.

First of all, you did not specifically mention it, but it seems to me that a basic rule of thumb to reduce the cost of anything is to keep the government out of it.

Free enterprise and competitiveness will normally by nature drive down costs and this brings us to #4 on your list....Failure to have interstate competition for health insurers.

Seems that just that simple act of opening that up would do so much to GET THE GOVERNMENT out of this business.

Here is MY problem...the insurance companies are regulated by the state, and I believe in states rights. How does this become a national market for the insurance companies I ask of those who are well versed in this ???

Having that competitive factor across the state lines , it seems alone would drive down costs. Competition and free market are basically the best way to control these things.

Hopeing somebody who knows the industry can answer the question and even take up the case of the insurance company.


PS.....If we have an insurance guy or gal that can speak to this, please at least for me keep it as simple as possible. I DO KNOW that a bill was proposed in congress, I think last year but will check to allow the interstate selling

[Guest]

The bill I refer to in the previous post was sponsored by Marsha Blackburn of Tenn and known as the Health Care Choice Act of 2011.

For example, 12 states require health plans to cover acupuncture services and under this bill residents in those states who feel they don't need such coverage theoretically could find cheaper plans in states without the acupuncture mandate.

Pros and cons ???

[Guest]

bbqman - another area of lawsuits must also be addressed - that of malpractice. the same resolution of allegations occurs where the medical practitioner's ins co settles a suit rather than having it adjudicated by a jury or judicial panel.

as a result of those settlements, the medical practitioner's malpractice rates are increased. thus, the practioner increases their cost to provide their service. and we're not just talking about physicians here! nurses and a multitude of therapists are included in this family of medical practitioners.

similar to work comp panels of judges, panels of malpractice judges could be established to ajudicate these allegations/lawsuits. they could render final decisions or refer cases to full jury trials.

as far as i'm concerned, there is no reason why health insurance cannot be opened up to cross state lines - auto and life insurance are - health insurance can be, too!

as waynet implied, only lobbyists stand in the way.

[Guest]

Some very sensible ideas BBQMan. I too commend you for your effort and thoughfulness. I spent more than 25 years with companies that were in the health insurance business, though it wasn't a major part of my responsibilities. Both companies (New York Life and Principal) got out of health insurance sales while I was with them. Both decided the business was too volatile and risks too great to continue to try and be a player in that space. Interesting that the health insurers have been vilified by many, but in reality are playing in a very competetive space with small margins, and great risks.

IMHO, we have driven the cost of healthcare too high in the United States by:

1. Making it ‘free’ or nearly so, especially for those on Medicare (that includes me).
2. Needlessly increasing the price of drugs by lawsuits for known side effects.
3. Not having a loser pays to discourage frivolous lawsuits.
4. Failure to have interstate competition for health insurers.
5. Requiring Insurance companies to provide ‘all inclusive’ plans rather than plans meeting the individual customer requirements. Failure to have ‘high risk’ pools in all states that can provide coverage to those with previously existing conditions.

Item 1: Anytime anything is free or inexpensive, more of it is used. This applies to medical care as well as everything else. Today, if you are on Medicare and have a supplement going to the doctor, the ER, the hospital, etc. is essentially free. As a result, people seek care (eg. a visit to the Dr. for a cold and wanting to get antibiotics). Having reasonable copay could discourage this. Some ideas, $25 for a primary care Dr. visit; $50 for a visit to a specialist; $50 for a visit to an urgent care facility; $100 for an ambulance; $100 for an ER visit and $200 for a hospital stay. Free is a bit of a misnomer - plans that offer first dollar coverage are rare today, and very, very costly. Catastrophic coverage with high deductibles of say $5,000, are the most affordable plans and make the most sense, in that they require most people to pay for the normal checkups, problems, etc. out-of-pocket, but protect against the huge expense of say an accident or cancer treatment, etc. I too am on medicare now and look at every statement - medicare pay pennies on the dollar for most procedures/treatments, causing many practitioners to declare an unwillingness to accept medicare as payment for services. High deductible plans, including in the medicare side somehow, may be the only solution.

This would be applied to households with an income of $35,000 per year or more thereby charging two-thirds of the population and leaving the lower income households untouched. Similar ideas could be applied to insurance plans for those under sixty-five.

Item 2: Drug lawsuits. Any drug that is capable of healing will also have side effects. When you get a drug, you are warned of the possible side effects. Drugs go through extensive testing to determine both the benefits and possible damages from them and are released to the market only when it is determined that the benefits outweigh the risks. If you take a drug and it helps you, so much the better. If you take a drug and encounter one of the identified side effects, then this is risk that you knowingly took and the Pharmaceutical companies should not be liable for your loss anymore than GM should be responsible for your injuries if you get in an accident. You accepted that risk by driving. I tend to agree that lawsuits have crippled not only the drug industry, but practitioners and insurers as well. When I was with New York Life we settled a class-action suit for 75 million dollars out of court. I was livid, as I thought we were not wrong, but the corporate lawyers advised capitulation was cheaper than a prolonged fight. Of the 75 million, 50 million went to the defendants law firm. The remaining 25 million went to the class, in the form of incentives that few took advantage of. In other words the law firm got weathy, the alleged injured parties got bupkus.

Item 3: Frivolous Lawsuits: Today, lawsuits can be brought for virtually any mishap, perceived or real. This is why you see the many ads for law firms saying call us, no cost to you if we lose. Far too often, it is less expensive for the insurance company being sued to provide an out of court settlement than it is to go to court. One example – I was involved in a low-speed accident a few years ago – the speed was so low speed that there was less than $500 in damages. Everyone went away and three weeks later the driver decided he had ‘whiplash’. Final settlement, $18,000 plus legal expenses. I can provide numerous other examples including one by an attorney you see on television virtually every day, but I believe all of you are familiar with the problem. See the comments above

Item 4: Failure to have interstate competition for insurance plans. Today, insurance providers need to be approved by state regulators who determine which companies can compete and what they may charge. This is a too cozy relationship and invites higher premiums. By opening up to interstate competition, prices will come down. Not sure this is doable, as each state has a beauracracy in place that is seen as that state's watchdog/ombudsman to protect them from the predatory insurance industry and they would be resistant to disbanding.

Item 5: Requiring plans that cover virtually everything – many of those coverages added by special interest groups. Let people choose the coverages they want and are willing to pay for. Some may want Chiropractors, Acupuncture, contraception, fertility treatments, Viagra, zero copays, etc. covered. Others may not. Let those who want these things covered, pay for their plan. Let those who do not, pay for their less expensive plan. Cafeteria type benefits would be a good idea, but very expensive. I would have to do more research to intelligently comment on this, though it sounds appealing.

Item 6: Failure to have ‘high risk’ pools in all states. Everyone should be able to purchase health insurance. By creating high-risk pools, everyone will be able to purchase health insurance. Some low-income people may need to be subsidized, but everyone needs to have some skin in the game. This has been done in the auto insurance industry - don't know why it wouldn't work with health insurance, though would likely create additional beauracracy.

These are just my ideas, anyone wish to comment?

Well done, certainly made me think!

[Guest]

Ed, Thanks for the input from the perspective of an insider who has seen the damage being done. I do believe that cafeteria plans are realistic. Insurance companies do it every day with automobile insurance. Medical insurance was intended to cover us in case of catastrophic illnesses - not reasonably expected costs.

[Guest]

IMHO, we have driven the cost of healthcare too high in the United States by:

1. Making it ‘free’ or nearly so, especially for those on Medicare (that includes me).
2. Needlessly increasing the price of drugs by lawsuits for known side effects.
3. Not having a loser pays to discourage frivolous lawsuits.
4. Failure to have interstate competition for health insurers.
5. Requiring Insurance companies to provide ‘all inclusive’ plans rather than plans meeting the individual customer requirements.
6. Failure to have ‘high risk’ pools in all states that can provide coverage to those with previously existing conditions.

Item 1: Anytime anything is free or inexpensive, more of it is used. This applies to medical care as well as everything else. Today, if you are on Medicare and have a supplement going to the doctor, the ER, the hospital, etc. is essentially free. As a result, people seek care (eg. a visit to the Dr. for a cold and wanting to get antibiotics). Having reasonable copay could discourage this. Some ideas, $25 for a primary care Dr. visit; $50 for a visit to a specialist; $50 for a visit to an urgent care facility; $100 for an ambulance; $100 for an ER visit and $200 for a hospital stay.

This would be applied to households with an income of $35,000 per year or more thereby charging two-thirds of the population and leaving the lower income households untouched. Similar ideas could be applied to insurance plans for those under sixty-five.

Item 2: Drug lawsuits. Any drug that is capable of healing will also have side effects. When you get a drug, you are warned of the possible side effects. Drugs go through extensive testing to determine both the benefits and possible damages from them and are released to the market only when it is determined that the benefits outweigh the risks. If you take a drug and it helps you, so much the better. If you take a drug and encounter one of the identified side effects, then this is risk that you knowingly took and the Pharmaceutical companies should not be liable for your loss anymore than GM should be responsible for your injuries if you get in an accident. You accepted that risk by driving.

Item 3: Frivolous Lawsuits: Today, lawsuits can be brought for virtually any mishap, perceived or real. This is why you see the many ads for law firms saying call us, no cost to you if we lose. Far too often, it is less expensive for the insurance company being sued to provide an out of court settlement than it is to go to court. One example – I was involved in a low-speed accident a few years ago – the speed was so low speed that there was less than $500 in damages. Everyone went away and three weeks later the driver decided he had ‘whiplash’. Final settlement, $18,000 plus legal expenses. I can provide numerous other examples including one by an attorney you see on television virtually every day, but I believe all of you are familiar with the problem.

Item 4: Failure to have interstate competition for insurance plans. Today, insurance providers need to be approved by state regulators who determine which companies can compete and what they may charge. This is a too cozy relationship and invites higher premiums. By opening up to interstate competition, prices will come down.

Item 5: Requiring plans that cover virtually everything – many of those coverages added by special interest groups. Let people choose the coverages they want and are willing to pay for. Some may want Chiropractors, Acupuncture, contraception, fertility treatments, Viagra, zero copays, etc. covered. Others may not. Let those who want these things covered, pay for their plan. Let those who do not, pay for their less expensive plan.

Item 6: Failure to have ‘high risk’ pools in all states. Everyone should be able to purchase health insurance. By creating high-risk pools, everyone will be able to purchase health insurance. Some low-income people may need to be subsidized, but everyone needs to have some skin in the game.

These are just my ideas, anyone wish to comment?

I do take exception to #1. I, too, am on Medicare for which they take almost $100 per month out of SS for the premium. In addition, I have Part D $45.00 per month + co-pays, and a supplement for $175.00 per month. That is over $300 a month just for me, so please define what I am getting for "free". Eye refractions and glasses and dental are not covered at all. If you have to go somewhere that does not accept Medicare such as Mayo, you are responsible for whatever you do not recover from Medicare and your supplement on your own. I know, because I had to have surgery in 2007 at Mayo...they file the Medicare, but they do not accept assignment. (BTW, my neighbor has some medications for which the co-pay is over $100 a month and ends up in the "donut" hole within 6-8 months.)

This $300+ does not include my husband's care. Just his anticipated medical expense this year is expected to be some $5,000 out-of-pocket. This is in addition to the drug co-pays through his insurance plan, the drug co-pays at the VA, and the doctor co-pay at the VA based on our income. Free or nearly free? BTW, we do not make unnecessary trips to doctors, hospitals, etc. We do not go to the ER with anything less than life-threatening illness/injury, either. For anything less, but urgent, we go to the urgent care center.

#2 & #3) I do have to agree with you about frivilous lawsuits. Someone here made the remark that we must be "sittin' pretty after our lawsuit" when my husband had his stroke 10 years ago following surgery. (He had surgery so that he wouldn't have a stroke and it caused a stroke.) I just looked at her at said, "I didn't sue anybody. It wasn't anyone's fault...it just happened. We knew the risk going in."

I still say if everyone is forced to "buy" insurance under the proposed plan, who's going to see to it that the insurance companies are transparent (no fine print) and follow through on their part? Seems to me the only winners here will BE the insurance companies.

[Guest]

bbqman - another area of lawsuits must also be addressed - that of malpractice. the same resolution of allegations occurs where the medical practitioner's ins co settles a suit rather than having it adjudicated by a jury or judicial panel.

as a result of those settlements, the medical practitioner's malpractice rates are increased. thus, the practioner increases their cost to provide their service. and we're not just talking about physicians here! nurses and a multitude of therapists are included in this family of medical practitioners.

similar to work comp panels of judges, panels of malpractice judges could be established to ajudicate these allegations/lawsuits. they could render final decisions or refer cases to full jury trials.

as far as i'm concerned, there is no reason why health insurance cannot be opened up to cross state lines - auto and life insurance are - health insurance can be, too!

as waynet implied, only lobbyists stand in the way.

You are right on!

[Guest]

Responding to Ed's response to Item #6 above, regarding high-risk pools, 35 states ALREADY HAVE NON-PROFIT, STATE-INDUSTRY RUN HIGH RISK HEALTH INSURANCE POOLS!! I wrote about this yesterday on the other thread about Affordable Care Act:

Since 1976, these high-risk health insurance pools are for people who cannot get private insurance because of pre-existing conditions, or for having exhausted lifetime limits, etc. etc.!!!!

"Since the first state high-risk health insurance plans were established in Connecticut and Minnesota in 1976, risk pools have grown in number and have evolved in their role in addressing inequities and inadequacies of the health care system.

Today, risk pools are accepted, proven programs that serve special needs, and contribute an element of stability in key individual markets of the insurance system.

Health insurance risk pools serve two primary roles-- they provide a means for guaranteed access to insurance, that enables individuals to protect themselves from catastrophic medical bills; and they are increasingly recognized for the role they play in helping to keep the individual insurance markets viable for companies to continue to compete in.

About Pools

Health insurance risk pools are special programs created by state legislatures to provide a safety net for the "medically uninsurable" population. These are people who have been denied health insurance coverage because of a pre-existing health condition, or who can only access private coverage that is restricted or has extremely high rates.

Each of the state risk pool-type programs is different. Generally, the programs operate as a state-created nonprofit association overseen by a board of directors made up of industry, consumer and state insurance department representatives. The board contracts with an established insurance company to collect premiums and pay claims and administer the program on a day-to-day basis.

Insurance benefits vary, but risk pools typically offer benefits that are comparable to basic private market plans -- 80/20 major medical and outpatient coverage, a choice of deductible and co-payments. Maximum lifetime benefits vary by state from as low as $350,000 to $2 million."
Read more:
About Pools (http://naschip.org/portal/index.php?option=com_content&view=article&id=54:about-pools)

See States with High-Risk Pools:
States with Pools (http://naschip.org/portal/index.php?option=com_content&view=article&id=53&Itemid=1)

See State-by-State Analysis in 2010 in free report sections here:

***Especially see "Claims as a Percent of Premium", and "Sources of Funding" 2010, to see the premium to claims ratio (claims paid out exceed premiums received in almost all states), and how in most states, ASSESSMENTS on insurance companies balance that ratio and pool funding!

SEE:
Quick Checks (http://naschip.org/portal/index.php?option=com_content&view=article&id=230)

Also see Minnesota's High-Risk Health Insurance Pool's website to see the specifics of their plan on which many others were modeled:

MCHA's Home Page - 866-894-8053 (http://www.mchamn.com/)

[Guest]

I did a bit of research on the bill before congress right now that would allow the sale of insurance across state lines.

Unfortunately it is split along party lines and is not a new concept of course.

It is in fact in the new Obama health care bill which will allow health care to be sold across state lines when both states agree and "consumer protections are maintained" The Obama bill allows the establishment Health care choice compacts According to consumer protection folks this will erode many state protections, leave policyholders with inadequate coverage and could actually lead to higher premiums for some people.

Of course the Democrats support this in the bill and do not think anymore is necessary. In fact, they admit this is only in the bill because the Republicans insisted on it.

The Republican alternative is to allow you to shop between states to get the lowest rates for the coverage that you want and perhaps replace a high cost policy that has coverage for things you do not want.

The problem is setting the standards for what coverage you get.

This may sound stupid but to me it sounds again like the insurers lobby this stuff and the government says they are protecting us from ourselves and that we cannot be trusted to buy the right policy.

For clarification, the part of the Obama bill that may allow this is considered so vague as to affect as they say.. a race to the bottom, meaning the worst possible coverage

[Guest]

Ed, Thanks for the input from the perspective of an insider who has seen the damage being done. I do believe that cafeteria plans are realistic. Insurance companies do it every day with automobile insurance. Medical insurance was intended to cover us in case of catastrophic illnesses - not reasonably expected costs.

Cafeteria benefits may be too expensive because of what the insurance industry refers to as "adverse selection". In other words the people most likely to purchase a benefit are those who are most likely to utilize that benefit. Example: Insurer offers to a given group the opportunity to purchse maternity coverage. The employees or group members who take advantage of the coverage are the ones of birthing age and a plan to have children. The insurance concept of "spreading the risk" therefore does not apply, and the coverage would cost almost as much as having a child without coverage. In a typical plan the risk of having to pay for maternity coverage is spread over the entire group, including those unlikely to utilize it, thus spreading the risk and keeping the individual costs down.

[Guest]

Here is an article that discusses some of the OPs proposals. ObamaCare Repeal (http://finance.yahoo.com/news/obamacare-repeal-big-impact-190000460.html)