Borrowing a Good Idea

Wednesday, October 28, 2009
A scene from the future.

Senate cloakroom. An unscheduled meeting of Senators Barbara Boxer (D-CA), Sherrod Brown (D-OH), Byron Dorgan (D-ND), Al Franken (D-WI), John Kerry (D-MA), and John Rockefeller IV (D-WV).

Dorgan: It’s not working.

Kerry: Of course it’s working. Polls show the

Dorgan: John! It’s not working. Polls? Hell John, you’ve got polls that show you won the presidency ten years ago. Barbara, you ran national commercials showing that North Dakotans were mostly covered by one health insurance company. Do you know how many we have now?

Rockefeller: Two? Three?

Dorgan: None! Your public option killed our local Blue Cross. We don’t have that many residents. We couldn’t support three or four major companies. Competition? We want our old coverage back.

Kerry: People across the country love Medicare Part E.

Franken:John, enough with that. It was fun when Olbermann came up with that. But the Republicans successfully dubbed it Medicare Edsel to seniors and Medicare Error to others.

Kerry: Nobody else calls it Medicare Part E?

All: Just you, John.

Senator Beau Biden (D-De) enters the cloakroom.

Biden: Senators.

All: Senator.

Biden: That never gets old. What’s going on?

Boxer: Byron’s unhappy with the health plan.

Dorgan: I’m unhappy? My constituents are unhappy. And you? How happy are you?

Franken:The numbers are awful. We were told that costs would go down. Happiness would go up.

Biden: Doctors still on strike in San Francisco?

Boxer: Yes, but at least most of them are back to work in Los Angeles and San Diego.

Franken:The claims are through the roof. We undercut the insurers and took their healthiest clients. Since we didn’t ask any questions or exclude any preexisting conditions, we got all of the unhealthy, too. The insurers are making money, hand over fist, selling supplements and we were left holding the bag.

Kerry: I didn’t know so many had cancer.

Boxer: Or heart trouble.

Rockefeller:Or asthma. Half the country must use inhalers.

Brown: Much of this is preventable. If we could only get people to take better care of themselves, quit smoking and drink less, we’d be OK.

Biden: Good luck with that.

Brown: Well, I’ve got an idea. I would like to initiate a trial program in Northeast Ohio. It’s based on a great idea from a few years ago. Toby Cosgrove of the Cleveland Clinic has pointed out that obesity is the root cause of much of our problem.

Boxer: Yes, we all know that obesity related claims are killing us. What’s the idea?

Brown: The Cleveland Clinic would send out three cans of Slim Fast to every household in Great Cleveland. Once people see how easy it is to lose weight, our problems will be over. And of course, since this is such a good idea, they won’t mind paying for the diet shakes.

Rockefeller:How much will it cost them?

Brown: Just $50.

Kerry: Sounds like a steal!


I hope you are reading this under the glow of a low-energy light bulb.

DAVE

www.bogartcunix.com


It's Your Turn To Pick Up The Check

Thursday, October 22, 2009
Forget free lunch. I want dinner.

I briefly touched upon rating differentials in my last blog. To recap, there were women complaining to Congress about paying higher individual health insurance premiums when they are young and, statistically, have more claims than young men. There was, of course, no mention that their rates would be less than their male counterparts when they get older. As Congress decides to invade my business, they will eventually scale back on the grandiose proclamations and actually have to start running their new insurance company.

Yes, insurance company. How will Uncle Sam Mutual operate? Will U.S.M. cover all of the services, tests, and procedures your current plan challenges? Every dread disease will have its teams of lobbyists and victims ready to testify at Congressional hearings. Congress will be the board of directors of Uncle Sam Mutual. Congress, the same group that a few years ago under Doctor Bill Frist's leadership attempted to diagnose Terri Schiavo, will be asked to make tough decisions. We're in trouble.

Let's take something easy - price. How will Uncle Sam Mutual price the product? Let's assume, to keep this simple, that there is only one policy.

The following determine premiums today:
1. Location
2. Age
3. Gender
4. Health
5. Habits

Residents of Cuyahoga County pay the highest health insurance premiums in Ohio. Our doctors and hospitals charge more, run more tests, and do more procedures. Forget New York or Los Angelas. If we just make all Ohioans pay the same premium, my son Phillip, who lives in Marietta, will have the opportunity to help lower my monthly cost. Theoretically, as my premiums go down, his will go up.

Speaking of Phil, he can really pitch in if age is no longer a factor. I turn 55 next February. Males 55-64 have high utilization. Age 55-59 is expensive. Premiums for men 60-64 can be down right unpleasant. Thirty-one year old males have premiums that reflect their few claims. Remove age as a pricing factor and my premium should plummet. Poor Phillip.

Before we go any further, let's do a numbers check. Remember, so far we are only talking about location and age IN OHIO. We aren't stacking the deck with national extremes, smokers with suspended driver's licenses, or the chronically ill.

We'll use a "Chevy". Anthem Blue Cross. $1000 deductible 80/20 policy with office visits and Rx Card.

Marietta - Male age 22 - $101.08 per month
Lakewood - Male age 62 - $506.08 per month


In the interest of fairness, we'll split the difference. Again, we are only looking at location and age. Gender, habits, and health have yet to be factored into these numbers. The average of these two rates is $303.58. Our mythical 62 year old is thrilled. Our 22 year old is not. Forced to pay way too much, he abandons the system. At 22, he can. What does that do to our price?

As thousands of young men in their early 20's abandon Uncle Sam Mutual's policy, the average age of the participants increases. The price, assuming any semblance of rational accounting, increases. Every time the price increases, it forces more young, healthy people off the policy. Our 22 year old's biggest problem is the high percentage of older people who vote.

According to President Obama, we need the public option "to keep the insurance companies honest". How? Will the government really begin to pay medical providers the higher insurance rates? Will the policy be as self-sufficient as the Post Office? Will all the promises to the pharmaceutical companies, the seniors, the sick, etc... be kept? Or is this just one more campaign to pass a piece of legislation?

We have only touched upon two of the rating factors. Gender, habits, and health can actually be bigger contributors to the cost to pay for someone's health care. That is what we are discussing, Morbidity. What does it cost to pay for YOUR care?

I'm looking forward to a great dinner. And by the way, it's your turn to pick up the check.

DAVE

www.bogartcunix.com

Free Is Too Much

Monday, October 19, 2009
I know I've asked this before, but at the risk of appearing repetitive, What is our Goal? Is it too much to ask that before we completely restructure our health care delivery system and a major portion of our economy, we take a moment and delineate our goals?

There are a few, very few, activists and members of Congress who have the goal of eliminating all private insurance. They view the current legislation as the first step towards a Canadian-style single payer system. It is easy to lump everyone suggesting proposals that might have a negative impact on my business as proponents of "Socialized Medicine". Easy, but very wrong. It is also wrong to assume that anyone not lining up behind a significant overhaul or the "Public Option" is a right-wing nut job probably on the take from the insurance industry.

So let's look for some other goals. One I keep hearing about is that we want to cover the uninsured. Sounds great to me, but before you can cover the uninsured, you have to ask who they are and why they don't have insurance.

We know that a large number of the supposed 47 million are undocumented Americans. The President's big speech put the number somewhere between 12 and 17 million. We also know that a large number are not permanently uninsured, just simply between jobs. Some high earners choose to be uninsured. My favorite was a well known doctor at Hillcrest Hospital. For all I know, he and his family may still be without insurance coverage.

Some of the uninsured have major illnesses. Some are children, eligible for Medicaid, but their parents don't know or haven't bothered to complete the process of enrollment. And many of the uninsured are the working poor. Earning less than 200 percent of the poverty level, often working one or two low wage part time jobs. These people have fallen through the cracks. It is our responsibility to help them get covered.

But there is another group. And this is the group that concerns many of us. There are people of limited means who chose not to be insured, or at least, not today. When they need coverage, due to illness, accident, or pregnancy, they expect to be welcomed like long lost friends by the insurers, doctors and hospitals.

Let me give you an example. Pamela (not her real name) works full-time for a large specialty retailer in a Greater Cleveland mall. She is a healthy single mother in her early 40's. She stopped smoking years ago. Aside from her two pregnancies and her breast implants, she has not had any hospital stays or surgeries. Her older child is on her own. Pamela's teenager is covered by her father. Pam is uninsured by choice.

Pamela's employer has an excellent group health insurance policy. The plan includes an office visit copay, Rx card, and preventive care. Why isn't Pam covered? Why won't they take her? Neither the insurer nor the employer is to blame. The employer pays the vast majority of the premium. The employee portion for this policy is $41 per paycheck, $82 per month. Pam refuses to participate. She would rather spend the money elsewhere, preferably on e-bay.

Who pays if Pamela gets sick or injured? We do. What would it take to get her to participate in the system before she is being wheeled in on a gurney? Should she be forced by implementing a tax (We are supposed to say fees. The President and Senator Baucus love fees.) on people who refuse to buy insurance? Should her employer be required to pay 100% of the premium? Should the government, which is us, just give her free insurance? Obviously the moral imperative of being personally responsible hasn't been a motivator so far.

What happens when premiums increase? There is every indication that premiums will rise with the implementation of the Baucus bill. Will Pam's coworkers drop off the coverage as their disposable income is attacked? There are a lot of Pamela's. Each of these people has a reason why his/her lifestyle is more important than insurance right up until the moment care is needed.

I want to be very clear. I am not talking about people who have lost their group coverage, can't find another job, and have a serious preexisting condition. This year's COBRA extension was only a bandage. Our system has failed too many of these people. The working poor, wage earners struggling to survive, are also not the point of this. At one point the Republicans wanted to give the working poor tax credits to buy insurance. That isn't an answer. Immediate access to Medicaid, a state run program, and an increase in funding (taxes) is the only way I know to help them.

I refuse to believe that people choose to be poor, sick, or disabled. Just as it is our responsibility to help those who can not help themselves, it is our duty to provide for ourselves and our families when we can.

So what are our goals and how are we going to achieve them?

DAVE

By the way: Now that we are getting closer, it is time to assert YOUR Divine right to special consideration. On the October 15, 2009 ABC World News Tonight, Charlie Gibson reported about women testifying on Capitol Hill. The issue was that insurance companies were charging them more for health coverage than males the same age. The injustice! Of course, there was no mention that these same women would pay less than men for health insurance later in life or that their car insurance was less since the day they received their driver's licenses. And life insurance? Women's rates are always less than men's. Poor Charlie. He just didn't have the time to mention any of that.

www.bogartcunix.com