Would You Buy An Obamamobile From This Man?
by Howard Wait
“A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense.”
Consider the prospect of buying a car at a certain price, but not knowing what the costs for gasoline, oil changes, tires or other repairs would cost until after you made a purchase. Parking this Obamabile might cost $5 per hour, maybe $500; who knows? Maybe that defective air bag or gas pedal is covered under the warranty: maybe it isn't. That doesn't seem right, or legal, does it?
That's basically what people are doing when they purchase individual health insurance, especially Affordable Care Act Insurance. For those inclined to read all the fine print on dozens of health insurance plans, familiarize themselves with arcane terms like split deductibles, coinsurance and balance-billing and then review the provider lists and drug formularies for ailments they may not even have yet, there is a chance, but no guarantee, they could select the least-worst plan available.
What if you contract cancer, or HIV, and the drug formularies and specialists you need aren't included? What if the provider lists and formularies are complete fabrications? Well, they probably are, at least in the managed care plans surveyed by HHS Inspector General:
"We found that slightly more than half of providers could not offer appointments to enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients."
With all the money flowing into the coffers of managed care companies, they can't be bothered to update their provider lists? There should be a law, but there isn't. If you bought a useless health plan, blame yo'self. Caveat emptor.
“What if the provider lists and formularies are complete fabrications?”
The idea that individual patients are capable of sifting through all the contingencies of hundreds of insurance plans, devised by teams of industry professionals intent on fleecing them, to arrive at an optimal choice that will promote better healthcare through market competition is a wonderful fantasy for those who stand to profit from this scheme, but it's not reality. The truth is that only 11% of people surveyed are capable of understanding the terms and costs of a single health insurance plan, when the plan is sitting in front of them on a table.
Carnegie-Mellon's George Lowenstein surveyed 202 employer-based policy holders and asked them to compute costs of a 4-day hospital stay. They can't. Funny thing is, he can't either:
"I have a PhD in economics and I've spent a bunch of time giving insurance companies feedback about policies, and I still find them difficult to understand," Loewenstein said. Just 14% of white people and 30% of people with a bachelor's or greater are “proficient” in health literacy, says health.gov.
Clearly people cannot effectively understand and manage health costs, despite all the PR blather otherwise, in a system designed not to. We're not managing health costs, we're being managed. The hyper-vigilance required to navigate the minefield of financial hazards we are continually defending against is itself a health hazard and dealing with a con artist when you're deathly sick is the last thing your doctor would advise.
What we do know is bad enough. Let's remember the census reports in 2011 that the median wage earner in the US earns just $26,965. Half earn LESS. For anyone inclined to dismiss it as just a few poor people, please check your privilege at the door. A cursory review of silver plans available for Cook County on Healthcare.gov has seven silver level plans from Blue Cross. After the ACA subsidy, the premiums range from $245 to $416 for a single, 45 year-old person who smokes and earns $26,965 before taxes. That's $2,940 to $4,992 annually before health care or BHC®. The "subsidy" is $76.28 per month. Ha ha.
“The truth is that only 11% of people surveyed are capable of understanding the terms and costs of a single health insurance plan, when the plan is sitting in front of them on a table.”
Here we should note the idiocy of “cost-sharing reduction” which in this example is negligible. In the 200%-250% FPL tier above “poverty” level, it would increase actuarial value of his silver plan from 70% to 73%, and isn't worth discussing here. It may help people just over the Medicaid cutoff more, but they're in such dire straits, they may not care either.
Let's deduct about $5,000 for various taxes, $4,000 for premiums, and maybe $8,000 for rent (in lousy neighborhood in a middle tier city) and our patient has $9.965 left, for food and transportation and clothing and utilities and...medical costs. The deductibles on these plans average $3,821 before the insurance company kicks in a dime. Goodbye food, clothing and transportation. More likely, goodbye health care.
Realistically, the person with about $191 per week for all those expenses will "chose" food and busfare and lights. After all, these things are essential to his health. The chances he will spend $100 on medication, $50 on a specialist visit, $500 on an MRI or $900 to visit an emergency room are vanishingly small. After the deductible is paid, which will be never, health care is free! Let's hope that pain in his side isn't appendicitis! The Commonwealth Fund Health Care Affordability Tracking Survey spells it out:
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"Having health insurance doesn’t guarantee that Americans with lower incomes can afford needed care...Two of five adults with private insurance who had high deductibles relative to their income said they had delayed needed care because of the deductible."
That means missed prescriptions, medical appointments skipped, or just not seeing a doctor in the first place. Most likely the other three-fifths didn't need health care at the time, which tends to skew the results more favorably than the reality of needing health care actually is.
With catastrophic junk plans like this, healthy people are in a lot of trouble if they need health care. Their best scenario is getting hit by a truck and not caring that total costs for them, although bankrupting, will be capped – sort of – if they can stay awake long enough to insist that no out-of-network anesthesiologists at their in-network hospital work on them.
Chronic care patients are another story. They need medical care every month without which their lives are endangered. Like Medicare's famously crappy "donut hole" that left elders on the hook for 100% of prescription costs each August, the ACA's donut hole starts over every year at January 1st in the form of a huge deductible for which "some costs may not apply" and will be ruinous for chronic patients and beyond the reach of many, depending on actual costs for their illnesses.
“The ACA's donut hole starts over every year at January 1st in the form of a huge deductible.”
Has anyone looked lately at the cost of cancer drugs? Or the huge spike in generics like humalog for diabetics? How many sick, low-income people can come up with $3,000 out-of-pocket on January 1st? Oh yeah, we already know: “A majority, or 64%, of Americans don't have enough cash on hand to handle a $1,000 emergency expense.“
After they finish their health insurance literacy class, they can attend the financial literacy class offered by their credit card company. Deadbeats.
We've heard endlessly how many people have enrolled in "coverage." The ad campaigns blare "are you covered?" At the modest rate of 2.4 physicians per 1,000 patients (Cuba has 6.7 per 1,000), we need 38,400 new doctors to treat 16 million new patients, or 120,000 for 50 million uninsured. Never mind that no one asked where the doctors were coming from. For a bunch of corporate and government types swooning over data and metrics, they're doing a lousy job of collecting data on anything that counts for actual patients. You know, basic stuff, like: what percentage of policy holders receive any cash benefit after premiums and out-of-pocket costs that run about $12,400? What percentage of chronic care patients can afford their prescriptions? How much health care is provided to typical policy holders, not just the sickest tier, for all the money they spend? And what about the sickest? Or, maybe: are health outcomes any better for all this? At what cost?
Obamacare is the leading edge, the template for future health insurance for the rest of you. HDHP's—High Deductible Health Plans—with skinny networks, overpriced medicines and more tricks and traps than a Halloween funhouse. The woefully misnamed Affordable Care Act is designed to deliver $8,000 per year to insurance companies and $5,000 per year to medical providers before it delivers a dime to patients. That's $208,000,000,000, give or take a few bucks, per year to the medical complex. And it's working exactly as planned.
Howard Wait writes to unveil the reality behind the cultural trance that permeates American life. He lives in Chicago.
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