Tuesday, September 15, 2009

New Census numbers out on Healthcare, the Underinsured & Everything

Census Bureau report here.  Some Highlights:

In 2008 the percentage of people covered by private health insurance was 66.7%; people covered by employment-based health insurance decreased to 58.5%, and people covered by government health insurance programs increased to 29.0%.
And what's worse - the census data for 2008 does not account for any loss of insurance due to the 9 Million jobs that have been lost since this recession began at the end of 2008.  Not those people who are unemployed.  Not any of their dependents who were previously relying on that worker's coverage for themselves.

What those figures don't tell you are the number of people who are UNDERINSURED.  There's no formal definition of what it means to be "underinsured" but a generally accepted consensus is when any of the following situations exist:
  •  Medical expenses greater than 10 percent of annual income
  • An annual income less than 200 percent of the federal poverty level and medical expenses greater than 5 percent of annual income
  • Health plan deductibles equal to or greater than 5 percent of annual income
The above article, from the AAOS newsletter estimates that as of 2008 about 35% of Americans are uninsured or underinsured. Again, that article was written *before* the recession hit at the end of the year.

This new report from the non-profit, non-partisan Kaiser Family Foundation also gives us a clue as to why that number is exploding.  They found that the average premium for a company provided family health plan has gone up 131% in the last decade.
Why is this so alarming?  Because people who are underinsured drive up total health care costs for everyone almost as much as those who are totally uninsured.  Here's a pretty good breakdown of how that works, and why the underinsured are such a problem.  Most people who don't know the specifics can't get past the apparent illogic -"how do people who DO NOT USE the system make that system cost more"?  The key element is what kind of care they are using.  They forego relatively cheap preventative care (though still too expensive for them out of pocket) and end up using highly expensive critical care when they're out of all other options.
I, and my family fall into this category. 

Premiums for our group plan at work went up 40% in three years (from 2005 - 2008).  In 2008 we could only get three companies to even give us a quote.  Our existing carrier, Regence Blue Cross was the low bid an dwanted our premiums to go up another 39% on top of that to renew.  Management decided to self-insure instead.  At the same time, our deductibles and copays have doubled. It now costs me $30 for an office visit to see my primary physician.  $40 for a specialist.  The smallest deductible I can get is $500.   I pay 15% of my own premiums as an employee.  And would have to pay 100% of the premiums for my dependents if we opted to have them included.   Remember, Mr. Stang has several chronic, pre-conditions that require many office visits and medications.  Due to my pre-existing conditions (sinusitic, depression) I see my doctor 4-5 times a year.  So the out of pocket expenses REALLY add up for us.  Even though I take full advantage of my available Flexible Spending Account - it only helps out with $1500 in expenses.  Which the last few years has been totally eaten up by dental expenses (our dental plan is worse than our medical plan).

This is a far cry from the union-provided insurance coverage we had through Pop as a kid.  Where all we had to do was enter "Blue Cross" and our local # on the paperwork and everything was taken care of.  Never a hassle.  Never a copay.  Never a complaint.

Here's the kicker with the piddly excuse for insurance available on the market today.  The inflated deductible, copays, etc. only apply to COVERED expenses.  So even though we are paying for more and more of our own health care out of pocket, we still have to fight the insurance company every.damned.time we try to get care to get our coinsurance credited correctly.  Which means not only do we get virtually no return whatsoever on the nearly 25% of my total earned income (except perhaps catastrophic coverage) that we invest in health care, we (and more importantly to the question of improving overall effectiveness - our doctors) still get the pleasure of spending countless hours on unnavigable customer service phone trees to get them to approve charges they're not even going to have to pay for.

This results in huge overhead for our doctors - they have to keep people on staff to do nothing but deal with the insurance coverage/billing issues.  It results in huge administrative fees for our insurance company.  That last quote from Regence for our company?  Their administration fees ALONE were 25 cents/ every premium dollar spent.  Compare this to Medicare - a government run program - that somehow manages to do the trick with only a 5 cent/premium dollar administrative overhead.

So when our family's GP began to offer direct contracting, we signed up Mr. Stang and MickeyD in a heartbeat.  More on this new "trend" in the next post.

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