Set this Health Insurance Garbage on Fire

An insider’s calm, moderate response to a crisis

Getting On

Many people who work for a living have the sense that we’re racing to pay our bills or save up for something we need. We blame this “not-enough-ness” on rising expectations, or inflation, or poor spending habits, or the ups and downs of the market; or we bash Millennials, or whatever. But our entire economy has a rock tied to a rope and looped around its throat, and the rock is health insurance.

Health insurance is actually at the core of the growing income inequality in the US. If we don’t make a drastic change, the average family will pay more for their healthcare than their take-home pay by around 2030. I’m not talking about the total cost of your healthcare, I’m talking about the amount taken out of your check plus the amount you pay in co-pays and other hidden fees. Your paycheck: gone.

I’m so glad the market is taking such good care of us.

The Costs

I have been in the position of having to pay more for healthcare than I earned. About 12 years ago, after my son was born and I was in grad school, my paycheck would have completely disappeared if I had bought benefits for us through my employer. I went to the “free market” and found no affordable options there either. Luckily, my family was poor enough that my son and I were able to qualify for the state-provided plan. But many struggling people are too “wealthy” to qualify for many subsidized programs, even if all their money has gone to their health insurance provider. For example, even in states with expanded Medicaid programs, you must make $16,000 or under to qualify for this very low-cost or free coverage.

We may not be able to fathom intellectually how much of our cash goes to healthcare, though we feel it when we go to the ATM or pay bills. The reason why it’s hard to grasp is because health insurance companies intentionally make this so complicated that the only option is to not think about it in order to stay sane. The complexity is part of a larger plan to keep usage down, as is the way we are often denied benefits on the first attempt to get them. If we let ourselves know this, our heads would explode (not a coverable injury under your plan, by the way — sorry).

In our own paychecks, there are several helpful ways that the cost of healthcare is divided off so that we don’t lose our collective minds. We see how much we pay for insurance if we examine our pay stub in detail, but we don’t, because we have so few alternatives or real decisions to make.

For example, on my pay stub, there are separate listings for my dental plan ($11.72 per biweekly pay-period), my Health Savings Account ($166.66 of my money, put into a separate account I use to pay for medical bills, that is supposed to give me a tax benefit and also “train me” to be a wise healthcare consumer, but is actually a huge amount of work to use), health insurance premiums ($228.56), and a vision plan ($8.23). This set-up presents a series of sorta-small numbers, but you never get a big total bill unless you get out the calculator. Per month, I pay a “premium” of $497.02 for family coverage of bodies plus extra for our eyeballs and mouths, or about $5,964.24 per year. That premium is like the baseline before all the extras get added.

Lest you think I’m getting a great deal, rest assured: I have a cheaper plan because it has a much higher deductible, which is the money one has to pay first at the beginning of every year before the insurance kicks in. I always use all the money in my HSA, and then some, which adds a total of another $4,000 to my spending. I’ve got all kinds of stuff wrong with me, plus some prescriptions get dinged for extra charges, so I spend about another $2,000 on supplements and chiropractic care that is “out of network” and outside of my deductible, which doesn’t count for my “in-network” deductible and is under my “out-of-network out-of-pocket maximum.”

It’s a little obtuse, this system of categories, and it costs me at least $11,964.08 per year. It won’t cover my kid’s braces, either.

Granted, it does cover stuff I need to stay alive. But I’m sick of saying “thank you for letting me live” to some company that is making money off of me. Being alive and getting medical care is a right, not a privilege.

The “Choices”

Even if we do examine and add up all the numbers, the horrifying thing is that there is very little we can do to alter our options within this system because our choices are rigged.

The first thing every HR person tells you is to be a smart shopper. You could weigh two options offered by your employer, if you’re lucky enough to have a job and then have insurance offered through your employer. And you should calculate all the costs and benefits. Here’s one good guide for comparing your health plans from Consumer Reports.

But it doesn’t matter much which choice you make, because across the board, employers are cutting options, changing plans to make them “less rich,” squeezing out benefits, narrowing provider networks, and passing more and more of the financial risk onto their employees. Much of the cost you pay for healthcare doesn’t actually show up on your pay stub but is instead taken from you in dribs and drabs as your deductibles get higher and your co-pays for office visits slowly balloon, at a rate that is more rapid than the total cost of healthcare over time. Our employers tell us this will help us learn to control costs, as if it’s our fault this system is such crap.

It’s not.

The Committees

I served on a committee for the last two years at my job, and this committee’s task was, in part, to negotiate benefits with my employer. I learned exactly how the game is rigged.

We asked to see all kinds of plan options, and at every turn, our employer consulted the experts, who assured us that “consumer-driven healthcare” and higher deductibles were the only way to bring down healthcare costs. During the previous year, changes to our plan — including having employees bear more of the cost but also including benefits education and cheap measures that made our employees healthier rather than just guilty, depressed, and confused — had actually resulted in a decreased overall cost to our employer.

Those big “wins” became irrelevant as soon as they were achieved. We asked to freeze healthcare premiums for a year while we investigated what had worked, and we were told no: healthcare was in crisis, and the only way forward was to take the next recommendation from the consultants.

What we learned is that there’s no such thing as a real “market” for plans, because employees themselves, even in a rare situation like ours where we potentially had access to conversations and data, don’t make the decisions about which plan to buy. Instead, our options shrink. Employers hear from healthcare consultants that Plan A or Plan B is the “best new way to contain healthcare costs,” and employers do whatever the consultants tell them. These consultants work at the behest and pleasure of the insurers.

What’s more, many of the options touted as healthcare trends are overly political. We were sent forwarded emails and newsletters from “free enterprise” institutes proclaiming that yet more draconian options like “private exchanges” which are supposed to be the ultimate dream in for-profit healthcare: your employer just gives you a lump sum of money, and you worry about how to pay for your own care. We worried that these exchanges didn’t have any data or real plans to back them up, and yet we had to listen to a presentation from our healthcare consultants assuring us that this was the next (unstoppable!) market-based solution to healthcare.

Healthcare costs are going to continue to rise, for a variety of complex reasons. Yet we were told that it was all the consumers’ fault, which is a classic blame-the-victim strategy. After leaving every single one of those benefits meetings, I felt unaccountably guilty for being mortal and having a body. The emergency of healthcare costs was all placed on the consumer in a very shame-based way; the story of healthcare is told in these meetings in terms of the supposedly poor choices of the healthcare consumer and their “overuse” of the system. Such “overuse” might exist, but the individual consumer gets no guidance about how to use their plan effectively.

Overall, the consumer is not to blame. The fact that the system continues to fail to control costs is an indication of its poor design. Here are some of the factors at fault.

• Bad incentives. At every level, there is little incentive for providers to control costs. Providers work in a “fee-for-service” system that reimburses based on the quantity of care, which results in patterns of more expensive testing being done. Our care for complex diseases is poorly coordinated, resulting in duplication of testing. And preventative care for chronic diseases is hard to come by. Many health insurers operate as for-profit businesses, which makes them responsible not for providing care but for targeting consumers and designing plans that will result in a healthy profit margin. UnitedHealth, the nation’s largest insurer in 2014, made $10.3 billion in profits that year. Health insurance companies look to target the most profitable large accounts, so they engage in a process of “purging” unprofitable smaller accounts by raising fees. This means that, even under the ACA, many small businesses cannot afford to buy insurance for their employees.
• Lack of competition. Now the bigger insurers have accumulated enough money to start buying up smaller firms, too. They eliminate their own competition, and that consolidation also has the effect of decreasing insurers’ incentives for lowering prices.
• Prescription drugs. Insurers say that they need more and more money to function due to the rising cost of healthcare and specifically the escalating cost of prescription drugs. Indeed, the pharmaceutical industry’s influence over healthcare costs and even healthcare legislation is hotly contested (and scary). But the entire problem can’t be blamed on Big Pharma.
• Insufficient government regulation. As a result of concerns over price gouging — insurers have a very captive market, after all — Congress instituted limits on price increases under the Affordable Care Act. An insurer gets fined if it doesn’t spend 80% of what it collects on costs related to providing actual medical care. (This is called the 80/20 rule.) But the limits aren’t sufficient. Since before the ACA went into effect, industry analysts predicted that the five major health insurance companies stood to profit immensely from the ACA thanks to new users that are driven to buy their plans, hikes in premiums for small businesses that are required to insure their employees, and the high ceiling on rate hikes.
• Consultants. During my term on the committee at my workplace, we examined plan options and consultant reports. I learned the vocabulary and tried to talk back, to explain, in plain language, the effects of escalating healthcare costs on my family. Many of the proposals would have resulted in my earning less next year than I made this year. And in the end, we won a one-year reprieve on healthcare changes. But in the process, we saw the horizon for us: inevitable cuts and more extreme “market-based” approaches guaranteed to shift more and more of the costs to the employees over time.

I’ve been active in healthcare for a long time. I wrote a memoir about my efforts. In August, I’m headed up to the Connecticut State House to testify in a hearing, because my insurer, Aetna, has asked the state if it can raise its consumers’ rates an average of 27% next year. I’m not sure what my workplace’s rates would be, or whether this average includes my workplace, but it’s much too high in any case. For perspective, my raise for next year is estimated to be around 1.5%.

The fundamental problem is that healthcare does not work as a market. The way things are set up now, stockholders of for-profit insurance firms and pharmaceutical firms benefit from the wild escalation in healthcare costs, so I’m calling bullshit on their “concern” over the escalation.

A meaningful healthcare fix will have to be structural, not an effort to shame those who have, and use, benefits.

The Alternative

Healthcare “industry” experts say voters won’t consent to pay for a public system, but in 2016 the average family of four spends over $25,000 of their own money per year on healthcare. I would gladly continue to fork over that cash if it would go to something decent, like bricks for hospital walls or salaries for nurses. Anybody who complains that we shouldn’t switch away from a market-driven system because it’s too hard or would be too complicated has never actually lived in a human body with an illness on a limited income and with substandard insurance. Let the people who have been fighting for socialized medicine run the new system if the buffoons currently in charge aren’t sure how to begin.

We’re all getting sicker, too, because this shit causes stress and forces low-income people to avoid caring for chronic problems. We avoid medical care when the costs seem greater than the benefits.

And no, the Affordable Care Act sadly didn’t fix this, though I’m a fan of that legislation. What it did was begin to offer health insurance options for people whose coverage was unfairly much too expensive before. But it didn’t wipe the slate clean and start over. That is what we need to do.

Though there was huge support for Democratic presidential candidate Bernie Sanders’ “Medicare for all” campaign platform, the Democratic National Committee didn’t include that wording in their campaign platform. I hope whatever organization Sanders has promised to launch will continue to make noise, and anybody with a body who isn’t a pharma or insurance shareholder should sign on. At the personal level, right now, all we can do is to tell our friends that this is one game they shouldn’t feel guilty about losing — because we’re getting bled out.

I’ll be sitting in one of those ACA hearings next month, feeling all my medical issues aggravated by the stress of living under this current system, which taxes all of our bodies and minds in ways that are never figured into the cost/benefit equations. I’m eager to tell my insurer that if it needs a 27% rate increase in order to function, maybe it should consider getting out of this business and letting somebody else take over.

Sonya Huber is the author of 5 books, including The Evolution of Hillary Clinton (June 2016) and the forthcoming Pain Woman Takes Your Keys. You can follow her on Twitter at @sonyahuber and read more at sonyahuber.com.