The Cure For Obamacare’s Fever: A Serious Reality Check

Image By Ben Giles

This piece was written in response to the editorial article Obamacare has a fever coming on published November 23rd, 2015 in the Chicago Tribune.

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It has been noted that health insurers are crying about the money they are losing in the Obamacare exchanges. It is only true ignorance that health insurers actually thought that more of the healthier people would sign up for insurance in the Obamacare state exchanges than those who did. The market in which it was intended to target are those who don’t have access to insurance through work or don’t qualify for Medicaid — traditionally, individuals who have always had a hard time getting health insurance, thus a decreased health status because of historically being uninsured or underinsured. Not sure how this is such a shock to leaders of health insurance companies, but ask any public health expert and they will tell you that people become healthier by having access to healthcare, or in this country, by having insurance.

In response to losing money on the health exchanges, many health insurers have increased premiums, reduced networks, got rid of popular plans, and continued with high deductibles. They are doing exactly what they were doing preACA — pricing individual plans out of affordability. This is the exact issue the ACA’s exchanges were trying to fix. That status quo, however, is continuing, that is, the same thing that didn’t work before. The agenda for those with this type of thinking is partially to ruin the ACA’s progress with health reform, and instead, keep the status quo which has thus far led us to the inefficient, costly, and poor quality healthcare system we currently have, including a nation full of many uninsured. Things we should be ashamed of as the richest country in the world. It’s imperative to continue this conversation in the same manner as we did with ERISA, COBRA, HIPAA, and then the ACA in addressing the abuses by insurers. We have been reforming health insurance abuses since the 1970’s with the introduction of these laws and have been carried over plenty of times and evolved into what we have the with ACA. We must keep evolving. Change needs to happen, and we cannot go backwards to where we were — we need to move forward and continue to progress.

So how do we continue the conversation? It’s inherent and required that we start looking with a different perspective. Taking away benefits will never work as the essential health benefits are necessary to moving away from underinsured, or people having subpar plans that do not cover what a human being needs — thus the rigid requirements of the law, since insurance companies were not providing these out of their general kindness or support for social responsibility. And yes, Mental Health is a benefit that people need, as well as Massage Therapy. But that’s an argument for another article.

When organizations want to keep people from having insurance and go out of their way to remove them from the system with exclusivity through high costs, we’re not only widening the gap between the rich and the poor, but also keeping people unhealthy and populations of unhealthy people make even more people unhealthy. The system forces these individuals to avoid doctor’s visits and routine checkups because of high deductibles and other fees. Nonetheless, there are leaders in healthcare who want to keep people unhealthy, and I am only led to one rational conclusion: they want to keep us sick.

Many of us agree that healthcare has many issues that need fixing. As a life-long consumer, researcher, and employee in healthcare, I have come to the deduction that the issue plaguing the entire system is due to one thing — treating healthcare as a commodity. Everything boils down to managing healthcare like it is any other business. But healthcare is not boots we put on our feet or cologne we spray on our bodies but instead, our daily quality of life we are buying. What has been lost is the fact that healthcare is a very different industry than the others in the market, and we shouldn’t even try to make money from people using healthcare as needed. When treating healthcare like a commodity instead of a right, it changes how decisions are made and ultimately how it functions. The thinking that individual plans were not profitable for health insurers is right along the lines of this type of thinking — and we need to move away from it for true sustainability. Healthcare shouldn’t be played in the market like the others, but instead looked upon as the foundation that allows the others to be played, because people need to be healthy for any real economy to thrive — or in reality, any living system. Perhaps the actual root cause to the bubble bursts in our economy from various sectors are truly due to the health of its consumers. Everyone who has access to healthcare is a healthier consumer.

One bold perspective is to give more benefits to get people healthier, instead of restricting or reducing access and coverage. This concept brings us back to the beginnings of health insurance, when Henry Kaiser wanted to ensure his employees stayed healthy and out of the hospital, an experiment of his that proved to be beneficial. An example of this is giving more mental health benefits to better manage chronic health and ultimately lower costs as the comorbidity of chronic disease and mental health is very high. Such coverage could cut costs by keeping patients out of emergency rooms and potentially ward away serious health problems that ultimately cost money — and make people unhealthy. Or even bolder, health plan leaders making sure that individuals have access to truly affordable plans to make them healthier, and eventually down the line, even save them costs from reduced claims. This is truly a win-win, yet bold moves are not what the status quo likes. Incumbents are not ready because they can adjust their priorities to provide health plans that are affordable, they just don’t want to.

Healthcare consumers must wake up and start giving health insurers the pressure they need to make changes and provide more value. Right now, leaders in health insurance are comfortably raising our premiums every year as they collect millions of dollars in salary. McKinsey & Co. estimated that insurers lost $2.5 billion on Marketplace policies in 2014, but we must be reminded that CEOs from ten health insurers took $1 billion in compensation alone in 2014. This doesn’t include the rest of the executive team and other insurance companies. The average CEO pay has reached nearly $10 million a year per company, with some at the heights of $25 million. Let’s also be sure to include into this conversation retirement packages, such as the package CIGNA CEO Edward Hanway received when he got the usual salary that year but also gave himself a $111 million pension package as a going-away gift. This is what our healthcare dollars taken monthly or biweekly from our checks and bank accounts are partially supporting — people getting super rich off sick people. It’s difficult to take health insurers seriously when they cry about losing money with their exchange plans when this type of greed exists within their leadership structures. We need to turn the conversation: what’s the priority; do we want to get people healthy and give them insurance, or do we want to continue treating healthcare as a commodity and restricting people from the basics they need to live a healthy life? This election year — voters should decide. Late Canadian politician Tommy Douglas said it perfectly, “People are more important than profits.” But this type of thinking doesn’t exist in leaders of health organizations in the U.S. because social responsibility doesn’t seem to come easy for incumbents, and they keep the political system working in their favor through the high salaries that they receive. It’s a vicious cycle and in the end, it’s U.S. citizens that are ultimately hurting.

A less known provision of the ACA, section 9014, sets strict limits on how much health insurers can deduct off their federal income taxes for the expense of executive compensation. It was no wonder why so many of them wanted the ACA repealed, but this provision exists for a reason as it is designed to limit excessive executive pay in a time when healthcare costs are sky-high. According to a report by the Institute of Policy Studies, these new deductibility limits generated $72 million in additional public revenue in 2013 from America’s largest publicly-held health insurance companies. This $72 million is the equivalent of the average annual health insurance plan deductible for 28,000 people.

It’s obvious that continued reform in healthcare is needed, very few argue against that. As a developed nation that has the money, power, and influence to change our current system for the better — we can and have the capabilities and maybe more importantly the responsibility. I believe it needs to begin with looking at healthcare as a right and not a commodity. The basic guarantee of access to healthcare for individuals has a chance to be saved if we have a serious reality check. We cannot go back to allowing health insurers to tailor their offerings to the varying needs of people in the market, but instead by putting caps on salaries and providing adequate policies that people need through making social responsibility a priority. The CEO compensation problem that exists in the U.S. needs to be removed from the healthcare industry as it has directly led to the fiscal irresponsibility that is driving costs to $700 billion more a year than we need to, as study after study has shown. People are perfectly competent enough to run successful companies without getting multi-million dollar salaries.

I challenge health insurers to be bold and try something new. Have the guts to take a stand for better health and push the Darwinian energies in your favor, as the bubble will continue to bloat and will burst if we go back to the pre-ACA times. I challenge insurers to be transformative, as evolving is truly what makes companies fit. Because if insurers don’t, they will capsize just like the 12 of the 23 state health co-ops and be replaced by modern technology and thought. This is the cyclical nature of all things, including business, and how markets thrive and grow. This is business school 101. The reality check is that health insurers need to evolve or become extinct.

I do have hope, that naïve American spirit, that eventually either an organization or leader will succeed in making healthcare a right in the United States. Chicago is home to entrepreneurs of all types, including technology in healthcare. Innovation is being discussed and tested, such as automated health insurance based on just the demographics that need to be considered automating the actuary process — the opportunities are abundant. Successful experiments like Accountable Care Organizations could potentially replace health insurers all together.

Entrepreneurial ventures like Uber and Lyft have changed the game for transit and are competing directly with Taxi Cabs in the same fashion. Health care consumers will catch on; entrepreneurs will be successful, and the smart tech savvy millennials are connected and are constantly sharing information with each other. The entire concept of health insurance needs to change or the pressure will mount at some point. Change scares people — especially paradigm shifting change — and it’s here.