Some Ideas For Reducing Uninsured Healthcare Costs & Health Insurance Premiums
Options I Would Explore If I Were Given The Chance To “Fix” Obamacare
Where Healthcare Stands Right Now
The Republicans have controlled Congress for more than six years. In all that time they failed to propose any legislation that would improve America’s healthcare system or fix any of their often-claimed defects in the Affordable Care Act.
Yesterday, without public debate or any outside input, the Republican leadership revealed a proposed healthcare law. Many details are missing. The costs and projected coverage are unknown. Still, they plan to ram their stealth plan through Congress in just a few weeks.
That seems reckless and irresponsible to me unless you understand that Republicans believe that everyone should be on their own and that people who can’t afford to pay for their own healthcare should do without.
For the details behind this statement see my article: The Conservatives’ Core Philosophy In 300 Words
Once you recognize that the Republicans don’t want any legislation that will create a public healthcare plan for all Americans, their failure to pass a comprehensive healthcare law in the last six years or to even propose any such plan beyond “Repeal the ACA” becomes understandable.
Given the fact that the Democrats have been legislatively unable to make any modifications to the ACA for the last six years and the Republican’s central goal is to avoid creating any publicly-funded medical insurance plan for all Americans I thought I may as well suggest a few things myself.
If I were the Speaker of the House and/or the Majority Leader of the Senate, here’s what I would want to discuss with knowledgeable healthcare industry professionals as possible new legislation.
Reduce Costs For Those Without Medical Insurance
A few years ago I had a one hour surgical procedure that required an operating room and a general anesthetic. I was home by lunch time. I received paperwork from the hospital that showed what they billed me and what my private insurer, Blue Cross, actually paid them.
The hospital bill was approximately $18,000. Blue Cross paid them around $1,900. Essentially, their normal, uninsured-patient charge for my procedure was almost ten times what they charged me as an insured person for the identical care.
Since hospitals seem to love having patients with major medical insurance I have to assume that they make a profit on providing medical care to people insured with traditional Blue Cross and similar major-medical plans.
So, if hospitals are making money when they provide services at the Blue Cross rates, how can they possibly justify charging people without insurance TEN TIMES what they charge Blue Cross insureds for the same services?
I guess because they can.
So, the first law I’d pass is one that would require every medical provider who charges for services not covered by medical insurance to include the following on their bill:
- Their charge for the non-covered service
- The smallest amount they would have accepted as full payment for that service from any of the major medical insurance providers with whom they have a contract. For simplicity I’ll call this the “Blue Cross Amount.”
- A notice that they will accept 150% of the Blue Cross Amount as payment in full if it is paid to them within sixty days after the patient receives that bill.
- A notice that they will accept 200% of the Blue Cross Amount as payment in full if it is delivered to them between sixty days and one-hundred-twenty days after the patient receives their bill, and
- A statement that they will accept 300% of the Blue Cross Amount if paid between 120 days and twelve months after the patient receives their bill.
Obviously there would need to be rules that would calculate the charge if the patient paid half the bill within sixty days and half the remaining amount within the second sixty days and so forth.
Ban Extreme Markups
We’re all aware that hospitals often levy outrageous charges — $5 or a one-cent (or less) aspirin, and the like.
I would pass a second, separate law that barred providers from charging more than three times the amount Medicare would pay for any particular service, drug, appliance or procedure. If Medicare would pay $1 for a dose of Drug X then the hospital couldn’t bill more than $3 for a dose of Drug X.
To make up the shortfall and cover its administrative and overhead costs the hospital could have overhead charges in any amount it wanted, but that overhead charge would have to be prominently disclosed in advance.
For example, the hospital could charge $XXXX for a stay in the hospital between eight and twenty-four hours and $YYYY for a stay between four and eight hours, BUT these charges would have to be prominently displayed on the hospital’s website and they would have to be clearly described on a Notice And Consent form signed by the patient before the services were provided.
That way, patients could price-compare different hospitals and chose those with lower overhead fees.
The patient would, of course, also still be entitled to clear his/her bill by a payment of not more than 150% of the Blue Cross Amount paid within sixty days after receipt of the bill.
Reduce The Cost Of Basic Coverage
Caps On Coverage
I think it’s great that all kinds of coverage is available under the basic ACA policy, but I also think it’s great that my car has seat warmers, LED headlights, BOSE speakers, GPS, four-wheel steering and all kinds of other neat stuff.
The thing is, if you required every car to have all that stuff then cars would be far more expensive than they need to be.
If your goal were to subsidize transportation for poor people who need a car to get to work you’d be smart to make the BOSE speakers and the LED headlights optional extras.
I would say the same about subsidized medical insurance for poor people.
What are the kinds of things most people really need coverage for? Broken legs, kidney stones, food poisoning, heart attacks, skin cancer, hernia, concussion, etc.
Most people most of the time just need run-of-the-mill medical care. Most people most of the time don’t need a heart-transplant, but that’s the kind of expense that drives the cost of premiums through the roof.
You may have a thousand covered people and the medical care that’s provided to 999 of them in any twelve month period might cost the carrier perhaps a million dollars. Then the 1,000th person needs a liver transplant and that one patient’s bill is $2 million. That outlier is what the carrier has to plan for when it computes its premiums.
If you take away that small but very expensive risk and instead allow the carrier to quote a rate for a basic policy that is capped at $750,000 in payments over any twelve month period, I would think that you could drastically reduce the premium cost.
Essentially, 999 people will get the much more affordable coverage they need and one person won’t. The alternative is that the premiums for all 1,000 people will be so high that the government won’t subsidize the program at all.
If people want higher coverage limits they can pay extra and increase the cap to $1.5M or $5M or unlimited. Again, if the plan is to subsidize the purchase of a Honda Civic and if the participant wants an Accord with GPS and LED headlights, they should to pay extra for it.
Co-Pays
There’s always a tug-of-war between over-using medical care for every little runny nose on the one hand and co-pays that are so high that the insured can’t afford to obtain the treatment they need on the other.
I have no expertise in this area, but I would guess that something like 50% coverage for the first $500, 75% coverage for the next $500 ($675 insurance paid and $325 insured paid for the first $1,000 in a policy year), 85% coverage for next $1,000 and 100% coverage after the first $2,000 up to the cap amount in a policy year might be a more or less reasonable compromise.
Again, lower co-pays could be purchased by the insured for an additional premium.
Include Preventive Coverage
All the policies would be required to offer no co-pay, annual preventative screening for common ailments. It’s cheaper to treat skin cancer, high blood sugar, glaucoma and breast cancer if you detect them early, so it’s in both the patient’s and the insurance company’s best interest to discover those conditions as soon as possible.
These checkups and screening tests would be exempt from the co-pay provisions and would be fully covered by the insurance.
Everyone In One Group
The carriers would be required to offer the same premium to everyone regardless of age, gender or medical condition. In short, the carriers would have to determine a premium based on the group as a whole.
Adjust The Premium Based On The Actual Number Of Policies Sold
The larger the group, the lower the risk. Each carrier would have to post their base rate which would be the same for every insured without regard to age or medical condition, but each carrier could also post a rebate schedule based upon the number of policies they actually sell.
Blue Cross might have computed its base rate on the assumption that it would write 100,000 policies, but if it had known that it was going to sell 200,000 policies the base rate would have been less.
For example, Blue Cross might advertise a base rate for the basic policy at $200/month but agree that if the size of the group for the coverage year averages between XXXXX and YYYYY people then each person will get a $5/month rebate/credit at the end of the policy year, and if the average group membership for that year is between YYYYY and ZZZZZ then the policy-holders would get a $10/month rebate/credit.
This way Blue Cross could take some of the risk out of the equation by quoting the higher 100,000 policy rate but it could attract more business by advertising a rebate if sales exceeded minimum expectations.
Would Any Of This Do Any Good?
Hell, I don’t know. It would take experts at Healthnet or Blue Cross, Kaiser or Sutter Health to answer that question.
I’m just throwing out ideas here that seem logical to me. That doesn’t mean any of this would be a material improvement.
Is there anyone reading this who has the expertise to analyze these ideas and give us some practical feedback?
If so, I’d love to hear from you.
BTW, does anyone have any ideas on how to combat the huge prices being charged by some pharmaceutical companies? I have some ideas but I’d like to hear yours.
– David Grace (www.DavidGraceAuthor.com)
