25 March 2014

More Health Insurance Musings

I follow our pediatrician on Twitter. This is not as odd as one might think since said pediatrician is also a published author, writer for the local paper and blogger for The Huffington Post.  She has always been a staunch supporter of healthcare reform and she often shares some really great resources for understanding the Affordable Care Act.  Recently she led me to this little gem about the Individual Mandate and I can honestly say this is worth a couple minutes of your time as the best explanation of how health insurance pools work. Once you see this illustration it starts to make a lot more sense as to how getting everyone insured will, in fact, lower costs for all healthcare/healthcare access via insurance ( in this country they are synonymous after all).

Of course, this snippet only explains why the participation of all helps the greater good. (The greater Good!) While that may be enough to get part of the young and healthy population signed up, it ignores the fundamental barriers to getting (in broad strokes) young, healthy, single and underemployed people to participate: the notion of invincibility.  It is easy to look at the numbers and think that the tax penalty is less than the premiums for the year and decide to gamble on staying healthy.* What the ACA enrollment campaign really needed to focus on, and to some extent this has happened in the last few weeks of push before open enrollment closes, is the cost of unanticipated injuries or accidents.  No matter how young and healthy you may be, one trip to the ER for a broken ankle and you have well exceeded your premium costs, often by several orders of magnitude.

As a cautionary tale I present my little sister.  She has a master's degree (at all of like 23), was working full time plus (often 60+ hours a week) and even had the good graces to be born middle-class and white (basically a conservative bootstraps dream come true). However, even though she was employed, she did not have health insurance offered through her job.  She would have fallen into the gap of making too much for state subsidized insurance, but was not making enough to reasonably cover the cost of a private plan in the pre-ACA open market.  Thanks to the ACA provision allowing children to stay on family insurance until age 26 she was still on my parents' plan.  That turned out to be a great thing when she came off a horse and broke her hip. Several days in the hospital, several hours of surgery and months of physical therapy later, my mum estimates the cash price of her care at well into six figures.  My sister could have had a small starter-home's worth of medical debt before her career even got off the ground.  Add that to the education debt most in her peer group carry, the lost wages from the 4 months of time she could not have worked and the possibility that there wouldn't even be a job for her at the far end ... it would have been game over. TKO. No amount of anti-socialist bootstraps rhetoric could erase the damage that would have done to her entire life.

I think this is the message that is the hardest to explain to people who think that health insurance is too expensive month to month, or that dang-it we are not going to be forced to buy anything by some socialist usurper.  It doesn't take much to bankrupt yourself with medical expenses and all those unpaid medial bills cause rising costs for everyone.  If my sister had not been able to pay those bills, the hospitals in question would have to raise prices next year to cover the services provided "in the red." Thus the cost to insurers goes up, and in the end, premiums go up and we all indirectly pay for those who cannot afford their own medical care. Hospitals also get those bills paid by outside sources including charities that run on federal/state/local grants and tax benefits provided for running such institutions. So, spoiler alert, your tax dollars already fund unpaid medical bills.  While I personally have no problem with paying a little more so everyone can get their hip fixed, overall that is not a sustainable system.

As the video explains, when everyone pays in, the costs go down for everyone. Same reason that states require car insurance and your bank requires homeowners insurance. When everyone pays into the pool, everyone can have their cash when they need it with no one having to go broke.  Insurance pools can be considered inherently socialist in their simplest form, but the same can be said for how we build roads, run schools and have a police force...things that most people seem to like just fine. Basically, many concerns and fears associated with the ACA are because people don't fully understand how health insurance and the payment for medical care works.  This is understandable because it is really complicated. None the less,  it seems a shame to me that much ACA-induced anxiety could be remedied with some simple education as to how the system works and what it means on the individual level. Of course, for those who have chosen to be willfully ignorant due to political philosophy, I have no idea how to remedy that. I merely hope that not too many people take a pass on a really great deal just to prove a point about how much they love Fox News.

Out of curiosity, and since for the first time ever I had all the data, I took a look at our healthcare costs for 2013. Needless to say I learned a lot about the relative worth of insurance, the relative value of ACA provisions and the profit margin enjoyed by most insurance companies.  That will be tomorrow's special treat.

*As a side note, I think there is a gender disparity here.  I suspect that young, healthy, single and underemployed men are more likely to fall prey to this fallacy since contraception needs and yearly screening "requirements" are less prevalent among men than women. As a young, healthy, single and underemployed woman, the benefits of contraception coverage alone might inspire participation since having an unplanned pregnancy sure shoots up the cost of your healthcare.  The flip side being that injuries and accidents are more prevalent in young males, but it is much easier to make that "Future Steve's" problem than the immediacy of needing hormonal contraceptives for any number of reasons.  Just a theory for future exploration...