Employers and even the Obamacare marketplace plans have latched on to a great idea (he said in jest). Affordable health insurance means lower premiums and apparently little else matters. So as I just read on one employers website, their lowest cost plan with the advantage of being “affordable” is a high deductible health plan with a $4,000 family deductible and a maximum out-of-pocket each year of $7,000 plus if you go out-of-network your coinsurance is doubled to 40%. What a deal!
As you all know, this affordable BS is all based on the idea that if you don’t use health care (and are discouraged from doing so), insurance will be cheaper. Not a bad concept. If nobody had an auto accident, car
insurance would be cheaper too. While occasionally the premium will vary by income, in most cases it does not, but in any case the worker earning $30,000 has the same deductible and out-of-pocket costs as the worker earning $100,000. Again, we mistakenly focus on the premium.
Now that we have looked at the goose, what about the gander of Medicare. Here we do exactly the opposite. There are not only low premiums, but there are low deductibles and we encourage people to buy supplemental insurance that virtually eliminates the Medicare deductibles and coinsurance. In other words, Medicare (even though there is no out-of-pocket limit on the basic coverage), combined with Medigap insurance provides greater benefits than these people had before they turned age 65.
In effect here is what we are saying. We can encourage Americans to be better health care consumers, to ask about costs, to shop for the best deal, to avoid unnecessary visits to the doctor by putting the upfront cost squeeze on them. However, once they turn age 65, suddenly none of that matters. To make matters worse, they now have insurance that does virtually nothing to concurrently review claims or review for medical necessity. Massive advertising on daytime TV actually encourages more utilization selling chairlifts, scooters, back and body braces and of course, prescription drugs.. It’s a perfect storm.
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