For One and All

Currently, I'm perplexed with the universal healthcare proposal as I love the idea of providing an additional opportunity to the citizens of this great country; however, I am pragmatic about the process and how this might be implemented through government processes. I do believe it is every citizen’s right to have access to health insurance and currently, everyone does have access but at a price. Anyone can purchase health insurance but the price isn’t always reasonable, depending on your needs, your medical history, and any pre-existing conditions. Yes, the DREADED “pre-existing” condition.

I believe it seems reasonable to offer health coverage through the government to encourage competitiveness in pricing for health packages. That is a tall order and the question is HOW would this occur? Thus far, the ideology offered would provide a menu of plans offered for everyday citizen’s at a range of prices and coverage options.

The question I have is how would you minimize the costs offered on the menu? How can the government dictate what is reasonable to the insurance companies offering coverage? Most likely, the insurance companies would submit a bid for the opportunity to provide health coverage to for the universal health coverage. To receive the bid, they would have to price their plans to compete and come in lower than current market pricing. This would create a new issue in two ways. First, the company would recover the expenses of lost revenues through the bid plans and would likely do so by driving up the costs of the plans sold to everyone else utilizing the private insurances offered. Second, in driving up the costs of private insurance plans, they would in fact increase the “reasonable market value” thus driving up the cost of the available bid prices. To give another idea; it would be no different than the current issue of hospitals recovering their “expenses” from indigent or free clinic services by driving up costs of simple items like Tylenol or Kleenex. You might also consider the often ridiculed but oh so real $200 toilets, $90 hammers, and the like itemized within government bids. These items priced reasonably at the local store but bid priced to the government at an exorbitant rate. How would we ensure this won't happen with health insurance as it continues today in every other area of our government?

Another, more legitimate example of questionable pricing may be found within my own insurance coverage. I carry Blue Cross/Blue Shield Blue Care HMO insurance, fully paid for by my (former) employer. The fee charged my former employer (I am currently laid-off) is $388.64 per month. To provide you with the facts, with this plan I am offered $20 co-pay for office visits, $35 specialist visits, and $100 emergency room visits. I also have a prescription plan through Blue Cross/Blue Shield Blue Care, providing generics at a very reasonable cost and others at a discount. To purchase a similar plan online through Blue Cross/Blue Shield, I would pay $267.27 per month for the Preferred-Care Blue Rate Saver but note this plan is not exactly the same as my Blue Care plan as it does have a $500 deductible. The difference between the plans is $121.37 per month. The monthly savings alone, could recover the deductible fee within a period of 4.5 months. The question I have is WHY would the same plan cost vary so much between the BCBS website and that offered by BCBS through my former employer? I have that answer – it comes in two ways.

The first way in which the pricing would differ so greatly, is through the bid process. My former employer is a school district and required to procure goods and services through the bid process, just as any government agency requires. The insurance company generally takes the available information for the “group” and estimate the fees involved for coverage. Now, I must share also that I chose the least expensive plan available and many others were offered with additional fees for additional services, as well as PPO plans which also involved additional fees. For the purposes of providing information, I am only using the plan for which I carry and the most similar plan found online at http://www.bcbskc.com/.

Once the the insurance company "wins" the bid, the insurance company and school district negotiate additional needs for the offered plans. This process involves the assurance to the insurance company, by the school district that a specific number of individuals will DEFINITELY receive coverage as health insurance is required by the district for each employee, termed “single paid health insurance”. Additional policies may be purchased by the employee to offer coverage for spouses and dependents. Through this bid process, the insurance company is assured a minimal number of insured’s and can then calculate the expenditure for their company and the cost to the district per employee.

The second way in which the two similar plans could have the great difference in pricing is due to the aforementioned “group”. The “group” is comprised of the pool of individuals within the extended coverage, and is part of the calculated cost negotiated by the insurance company and the district. This group, if part of a greater or more costly “at-risk” group would increase the monthly and annual fees for insurance coverage. For example, if a significant number of births, major surgeries, or illnesses occur within those covered by the district policy, the insurance company will increase costs for the following bid process by citing the expenses incurred by the group. Much in the same way your car insurance could increase if you have a significant number of claims with your company within your zip code, the insurance company can use your history and the history of your community (in this case the other employees) as the determining factor for the expense of your insurance.

I question how insurance companies would transfer this process to the Federal Government? More than likely, a group would be comprised of the covered citizens but what criteria would be used for determination of the risks and expenses? Consider this, so many things beyond your own history can impact your health and environmental factors could certainly be shown to influence health. It is possible that insurance companies would use your home value, your zip code, your socio-economic status and job to further determine the costs of insurance for you as an individual. Ultimately, it is likely the costs for private insurance would increase thus driving up the market value for a policy and the average cost of a policy when determining a bid price. The cost offered to citizens for the universal health coverage could ultimately grow far greater than at present and it would be on the shoulders of our government and of us as taxpayers to carry the costs moving forward.

I would love to see the opportunity for everyone to obtain health insurance at a reasonable cost but first, I do believe the word “reasonable” needs to be identified and a dollar amount of capped costs for citizens with the minimum of specific coverage offered should be written in stone.