Monday, February 9, 2015

Elisabeth Rosenthal’s “Insured, but Not Covered”

The New York Times
February 7, 2015
Insured, but Not Covered
By Elisabeth Rosenthal

The Affordable Care Act has ushered in an era of complex new health
insurance products featuring legions of out-of-pocket coinsurance fees,
high deductibles and narrow provider networks. Though commercial
insurers had already begun to shift toward such policies, the health
care law gave them added legitimacy and has vastly accelerated the
trend, experts say.

The theory behind the policies is that patients should bear more
financial risk so they will be more conscious and cautious about health
care spending. But some experts say the new policies have also left many
Americans scrambling to track expenses from a multitude of sources —
such as separate deductibles for network and non-network care, or
payments for drugs on an insurer's ever-changing list of drugs that
require high co-pays or are not covered at all.

For some… narrow networks can necessitate footing bills privately. For
others, the constant changes in policy guidelines — annual shifts in
what's covered and what's not, monthly shifts in which doctors are in
and out of network — can produce surprise bills for services they
assumed would be covered. For still others, the new fees are so
confusing and unsupportable that they just avoid seeing doctors.

(B)y endorsing and expanding the complex new policies promoted by the
health care industry, the law may in some ways be undermining its
signature promise: health care that is accessible and affordable for all.

Readers Comments:

Don McCanne
San Juan Capistrano, CA

The private insurance industry will always place a priority on
optimizing its business model, which means maximizing revenues
(premiums) and minimizing expenses (payments for patient care). Earlier
managed care models proved unpopular because of denial of care, but now
they have devised innumerable methods of denying payment instead, in
full or in part. Many examples are found in this article.

In sharp contrast, an insurer owned by the public, such as Medicare, has
a mission of serving patients. That is, our own public stewards are
there to help us get the care we need. They are not there to try to
produce a profit for the government; after all, its our own tax dollars.

We are close to the threshold wherein the public will no longer tolerate
private insurers shifting ever more costs onto patients with health care
needs, while taking away our choice of our health care professionals.

What is our way out? Improve Medicare and expand it to include everyone.

Len Charlap
Princeton, NJ

Some conservative commenters have pointed to Switzerland as a country
which only uses private insurance companies and appears to have a system
that works.

1. The Swiss government writes a basic policy that all companies are
required to offer with no change. Thus all the chicanery reported in the
article is avoided. The policy is accepted by all doctors. People know
exactly what they are getting. Everyone must have the basic policy.

2. The private insurance companies may make no profit on the basic policy.

3. The health care results of Switzerland are about average among the 10
or 12 wealthiest countries which is to say they are considerable better
than we get.

4. If the cost of insurance is more than 8% of a family's income. they
receive a subsidy from the government. About 40% receive such subsidies.

5. We pay about 50% more for health care than the Swiss, but the Swiss
pay almost 50% more than the other wealthy countries most of which use a
variation of single payer.

6. The Swiss government and insurance companies pay careful attention to
the practices of its physicians wrt to poor practice, unnecessary tests,
and overcharges. A suspected doctor will receive a dreaded "blue letter"
from the insurance company requiring him to justify his practice.

If we can't have an efficient single payer system like the UK or Canada,
for example, I would settle for something like the Swiss system. It
would do away with most of the scams illustrated in Rosenthal's great

Don McCanne
San Juan Capistrano, CA 23

In Reply to Len Charlap

The Swiss health care system is certainly superior to what we have in
the United States, precisely because of the reasons cited by Dr.
Charlap. However, a comprehensive report by OECD and WHO of the Swiss
system was released in 2011, and, if you read it carefully, you will
also find these features of the Swiss system - features they share with us:

* Highly inefficient and fragmented
* Profound administrative waste
* Inequitably funded
* Regressive financing
* Wide variations in premiums
* Highest out-of-pocket costs
* Increasing managed care intrusions
* Insurers game the system

Because of the inadequacies of the Affordable Care Act we need to return
to the negotiating table to fix our health care system. But when we do,
let's not start from a position of compromise, thereby allowing private
insurers to continue to inflict these abuses on us. Let's begin with a
bona fide single payer system - an improved version of Medicare that
covers everyone.


Comment by Don McCanne

This may be the most important article in Elisabeth Rosenthal's
outstanding series on health care costs and pricing in the United
States. She shows that the Affordable Care Act failed to prevent private
insurers from reducing their own risks by shifting much more of the
costs onto patients, while reducing patient choice by further limiting
their networks of approved providers.

Both access and affordability are worse now than they were with typical
plans available a generation ago. The nation expanded the numbers
covered by insurance, but at a cost of of leaving too many patients
broke and without adequate access to care.

In my first posted response to her article, I repeated our oft-expressed
view that it makes a difference on whether we finance health care
through private insurers structured to optimize their business success
or though public insurance designed specifically to serve patients.
Elisabeth Rosenthal shows that what is good for insurers is bad for

Some may wonder why I included two responses on the Swiss health care
system when this article is on the poor quality of private health plans
in America.

First I want to say that Len Charlap is one of the more astute and
ethically-driven commentators in the readers' response sections of The
New York Times. His highly appropriate response to this article explains
that our private insurance products could be greatly improved if we
adopted the policies that the Swiss have in their country to regulate
and control the excesses of the private insurance industry. Such a
system theoretically would be more politically feasible in the United
States since it is supported by a few prominent conservatives such as
Harvard Professor Regina Herzlinger.

We definitely do need to return to the negotiating tables since the ACA
reforms are intolerably flawed. Although I certainly agree with Len
Charlap that the Swiss system definitely would be superior to what we
have, I do have a problem supporting a Swiss-style private insurance
model as our opening position on renegotiating reform. Imagine having to
compromise with those on the far right who would insist that patients
have greater financial exposure to the health care that they receive.
They would perpetuate and make even worse the very problems that
Elisabeth Rosenthal discusses in her article.

The reason that I am reposting our responses here is that Len Charlap's
comment received very high exposure since it was selected and displayed
as a "NYT Picks" and at the top of the list of "Readers' Picks." On the
other hand, my response to him was held until some time after the
comments section was closed, and then, when it was posted, it was buried
under 300 plus responses, and thus had virtually no visibility.

My response to him listed findings from a OECD/WHO report that revealed
that the Swiss private insurance plans, though certainly better than
ours, still had many serious deficiencies that we should reject as we go
back to the tables to fix our sick system. Many NYT readers may assume
from Len Charlap's comment that the Swiss system is the answer, or at
least a reasonable compromise with broad political support (except that
the current Republican proposals move even further away from the highly
regulated Swiss system).

So the point of discussing these comments on the Swiss system is found
in my concluding remark in my second post above:

"Because of the inadequacies of the Affordable Care Act we need to
return to the negotiating table to fix our health care system. But when
we do, let's not start from a position of compromise, thereby allowing
private insurers to continue to inflict these abuses on us. Let's begin
with a bona fide single payer system - an improved version of Medicare
that covers everyone."

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