Some (personal) Medical Insurance Facts

While the country is swirling with monumental discussion, facts, statistics, opinions, lies and myths about the medical care and medical insurance issues, I thought I would share some of my personal facts regarding my wife’s and my medical coverage; anecdotal though it may be.

Medical Insurance:

When we retired in 2006, our group (state public employee) medical insurance premium for our joint coverage began billing us $893.76 per month. Prior to retiring our employer paid for this coverage. Today our premium is $1,157.46 – a 29.5% increase in premium costs over 6 years. The current rate of inflation is 2%.

Last year our monthly health care premium actually went down from $1,159.52, to $1,157.45 this year – a $2.07 per-month decrease. However, the plan has changed whereby we now must pay $500 out-of-pocket before anything is covered. So essentially, our medical costs have actually increased 3.5% over last year.

This year, our insurance provider is requiring all customers to participate in a mandatory “Health Engagement Model (HEM) program”. A surcharge (penalty) of $17.50 per person will be added to our monthly premium if we do not comply with the HEM requirements, which consists of watching online training videos. Between my wife and me, we have spent six hours on this process. Emphasis for those of you who decry government interference regarding your health care, note that these are private company hoops we are having to jump through – not government.

Over these six years, our group coverage has forced us to change insurance companies four times. As a result, we have had to change from medical providers and facilities with whom we have established doctor-patient relationships over years. Emphasis again, for those of you who decry government making decisions about your health care, note that these are private companies, making choices for us who we will be allowed to see – not government.

Pharmaceuticals:

One prescription my wife takes cost $543.78 for a 3-month supply in 2007. This same prescription charges the insurance company $912.58 today. This is a 68% increase in the cost of this drug over five years. Our co-pay for this prescription was $15, it is now $75.

… researchers’ estimate is based on the systematic collection of data directly from the industry and doctors during 2004, which shows the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion. [1]

Dental insurance:

We discontinued dental insurance as the premium amount plus the out-of-pocket costs for non-covered expenses was more than simply paying for services directly.

Final thoughts:

Our medical insurance premium, deductibles and co-pays consume one-third of our disposable income. I often wonder how many Conservative local business owners would much rather I spend that $19,800 a year in their local restaurants and businesses than send this money to out-of-town insurance companies? Multiply my $19,800 by the thousands of people like me – this amounts to millions of dollars denied the local economy.

Consider that for every car you buy, every bag of groceries, every movie ticket, every magazine, every gallon of gasoline… the cost of employee medical care premiums is factored into the price of what we pay for those goods and services. Why wouldn’t Conservatives rather want to either A) reduce the cost of their goods by that factor and increase sales, or B) pocket the additional profit from the reduced overhead, by having their employee insurance costs picked up by a single payer government plan? A single-payer plan seems like a win-win for every business in the county except medical insurance companies. Our business leaders must be the laughing stock of the remainder of the developed industrial world.

My final thought on the ACA (aka: ObamaCare)

It appears to focus of this law is directed entirely on insurance coverage but little on containing the rise in medical costs and the demise of medical outcomes. But hey… it’s a start.

References:

1. Big Pharma Spends More On Advertising Than ResearchAnd Development, Study Finds, ScienceDaily.com, January 5, 2008.

 

What exactly is "Obamacare"?

I ran across this fairly concise yet thorough overview of what exactly the provisions of the Affordable Care Act (affectionately known as ObamaCare) at the web site Reddit.com

Rather than completely republish the article, I will merely link to it below. It is presented in simple information points. I encourage you to browse the key points; whoever did prepared this did an excellent job.

What exactly is Obamacare and what did it change?

The underlying opposition to the Affordable Care Act come primarily from those who claim they don't want government making medical decisions about their health care. But just under half our population is already currently receiving government managed health through Medicare and Medicaid with few complaints and at administrative costs far under that of private sector insurance companies which have a profit incentive to reduce costs. Employees of government medical insurance providers do not earn multi-million dollar bonuses and salaries.

It is an established fact that the USA has the highest medical costs with the lowest outcomes of any developed country. The facts speak for themselves. If you don't like the Affordable Care act, what is your alternative in a system where these costs increase far greater then inflation every year? Opponents, I'm listening.

Death By A Thousand Cuts

Death By A Thousand Cuts can refer to:

- Creeping normalcy, the way a major negative change, which happens slowly in many unnoticed increments, is not perceived as objectionable

- Slow slicing, a form of torture and execution originating from Imperial China
~ Source: Wikipedia

Pictured above are two spent cardboard toilet paper tubes; you will notice that one is a bit smaller than the other. My wife is an avid recycler; she retrieves these tubes from our bathroom trash were I toss them and adds them to our household recycling. She noticed that the latest batch of toilet tissue was now being produced in a smaller width. The same number of plies, the same number of rolls per package, and at the SAME PRICE… everything the same with the exception that the customer now get 12% LESS product for their money.

This is not a new tactic in the never ending assault of commercial interests to tap a much of our dwindling consumer dollars as feasible. For example, cereal boxes on the grocery shelf appear to have the same height and width, but the packaging is not as deep; a nuance not readily visible as one browses the grocery aisle. Plastic containers have been redesigned to increase the size of the bottom “dimple” lowering the volume of products by 2 or 3 ounces though the container appears to remain the familiar size. A 6 ounce can of tuna today contains 5 ounces of product.

However this marketing tactic is not reserved only for consumer products. Our health insurance premiums had been increasing steadily at the rate of 11 to 15% each year over the previous years. So we were pleasantly surprised (initially) to find that our cost of our health insurance, which had been $1,150 per month last year, would remain this same amount again this year. Instead the insurance company has increased the costs of deductibles, co-payments and fees for special surgical procedures. We will now be required to pick up the first $1050 in medical expenses before the insurance company pays a cent of our medical bills. The premium has remained unchanged but the additional cost in the not-so-obvious charges essentially results in a 7.6% increase in our costs for insurance over last year.

The trend is clear, we consumers will be expected to pay more for less at every turn… and a great majority of the population will never even notice. I confess that I certainly would not have noticed how we are being gypped on toilet tissue had not my diligent little recycler lady noticed the change.

More than ever the rule of Caveat emptor applies– the trend toward redistribution of the wealth will continue, but not quite in the manner in which the Republicans like to frame the issue.

Health Care Regulatory Malpractice

Back in mid March I went through Aortic Valve replacement surgery. I’m one of the “lucky” ones who have group medical insurance through my former employer. It’s not free though. Here is how the stats for my procedure break down:

Days in the hospital: 23
Doctors and PAs involved in my treatment: 28
Gross charges billed to insurance: $265,136.49
Amount paid by insurance: $246,013.49
Out of cost paid by me: $915.00
Monthly insurance premium: $1,159.52

These are not the final costs; bills continue to “trickle” in. Of the 28 physicians I can recall actually seeing maybe ten.

When President Obama took office, he pushed through an initiative to revamp the medical insurance industry. To my thinking less than half the job has been addressed by this legislation; he focused on the insurance side of the overall health care issue, leaving the medical delivery system relatively untouched. This is like having the fire department trying to save your burning two-story home by trying to put out the fire on the ground level only – the whole upstairs is still a conflagration.

Each of the 28 doctors billed insurance separately, and multiple times for each time they looked at my chart. That means 28 separate financial transactions, not including the labs, hospital, et al. Heck, if a couple of these doctors just wanted to pick up some side revenue, they could have falsely claimed they provided treatment – the insurance company would have no way of knowing. Nor would I.

Pharmaceutical companies charge outrageous prices for their products. True many likely had high product development costs. But they also par with auto companies in the amount of time and money they spend on prime-time television advertising. I have seen as many as three pharmaceutical ads during one spate of commercial breaks. Who pays for that? I can guess.

The two largest medical providers in town share common real estate and parking lots. But they do not share patient medical data between them via their independent computer systems. Yesterday my cardiologist faxed a blood draw request to the lab in the next building. Yes, in the 21st century – FAXED!

I know people love to gripe about government, and Big government at that. But the city doesn’t have two water departments, there is only one DMV in town, people can apply for Food Stamps and Unemployment insurance compensation in one building. More importantly, NONE of these government agencies have CEO’s who draw million dollar annual bonuses.

It all kind-a makes me sick.

Pondering People and Pigs

It has been four weeks since my aortic valve replacement surgery; three weeks of being out of 23 days in the hospital. My life is currently weeks of multiple medical appointments and visits to the Infusion Clinic where my IV antibiotic pump connected to me 24/7 is serviced and my Coumadin levels checked and adjusted. I have good days and times when I feel extremely vulnerable; still I am lucky to be alive.

Constantly wearing this IV pump is a hassle; it is heavy and wearing it on a strap over my shoulder makes my already aching and healing chest ache even more. Yet this experience has also given me an appreciation of what others with more serious health issues must go through. I drop into the Infusion Clinic where my IV pump is quickly serviced and dressings changed. Most of the other patients there are required to hang out, enduring hours of infusion therapy, primarily for chemotherapy treatment. Again, I feel extremely lucky.

In the years prior to my mother-in-law’s, Wanda, death, her life completely revolved around hospitals and clinics. I now have some appreciation as to how difficult a time she was having. She suffered a cardiac amyloid condition; a condition similar to Alzheimers however affecting her heart rather than the brain. Her prognosis was that she would eventually decline, slipping into congestive heart failure. She was never going to get better, only worse. It was not unusual for her to have two or three doctor’s appointments every week, made even more difficult as she was by then wheelchair bound.

When Wanda was told that her condition had deteriorated to the point where she would require kidney dialysis, she decided that she had had enough dealing with needles, procedures and medications. Knowing that without dialysis she would die, she accepted that as the most humane way she could go. She died at home of kidney failure surrounded by her family.

My Coumadin treatments will eventually end in a month or two; likewise I should be free of my IV pump in a few weeks. I am in otherwise good physical condition and expected to make a full recovery. Eventually I will be able to do the things I enjoy; building and remodeling, yard work, riding my bike. I’m told I can expect to feel better than I before getting my new “pig” valve.

But my situation has reminded me of the countless others whose lives currently revolve around simply staying alive, who live within the restricted world of hospitals, clinics, therapies and procedures; many often painful or causing great sickness. My thoughts, at this moment, are for their difficult fight for life.

Did I mention how really lucky I am feeling right now?

Medical Insurance Legislation - A Job-Killer?

Former Massachusetts governor Mitt Romney spoke to his (anything but) like-minded Republican stalwarts and assorted Tea Party rabble at the Conservative Political Action Conference (CPAC) meeting in Washington this week. The consistent theme appeared to be get rid of President Obama who, as Romney claimed “… wants to look toward Europe” for solutions to the country’s ills – primarily medical insurance reform. [Room fills with laughter].

I’m thinking, Yeah – A European plan sounds OK to me! Let’s look at some simple statistics (Conservatives prefer things “simple”): The number of Europeans who suffer from lack of access to affordable medical care – Europe: 0, USA: 57,000,000. The number of Europeans forced to declare bankruptcy due to excessive medical bills – Europe: 0, USA, well medical bills are the second leading cause of bankruptcy in the country.

Fortunately the numbers of bankruptcies are down though, but not for reasons you might think. Yielding to lobbying efforts of the credit card industry, the Bush Administration and Republican congress changed the laws making it much more difficult for individuals (not companies, of course) to declare bankruptcy.

Recently House Speaker, John Boehner, rallied his minions to attempt to repeal the “Job Killing” medical reforms passed last year under the disgusting term, Obamacare. I am puzzled about what exactly in this bill, which expands medical access to millions of Americans, makes it a “job killer”? I can cite personal examples were I find instead, the LACK of affordable medical coverage is the real Job Killer.

Take, for example, my very bright son-in-law; an electrical engineer with several invention patents to his name, was mulling the possibly jumping from his current employer (in perpetual downsizing mode for most of the last decade), to a new technology start-up. This small tech start-up company is an example of one of these breed of “American Innovators” that this nation so prides itself on. In a country were we have been hemorrhaging manufacturing jobs, the bright hope for our future has always been our near mythical reputation as the innovator of the Next Big Thing. So here is a young bright mind poised to step in and be part of America’s big innovator comeback dream.

Well, no. You see this jewel of American daring-do apparently does not offer any employee medical benefits – none, zero, zilch! This bright young engineer is also smart enough to know not to risk the his health and that of his his wife and children by abandoning an employer who currently offers medical benefits.

Now let this point sink in – the LACK of available health care was the Job Killer here, and I can assume, in countless other cases. Innovation is stifled by the inability of this country to provide support for American innovation because we value the profit motive of for-profit medical insurance companies instead – our “innovative spirit” is stuck in the muck of the status-quo.

But the “job killing” examples from our lack of available medical insurance doesn’t stop there. In a country where highly qualified and motivated citizens are clamoring for work; millions of others who would like to retire, instead continue to work, thereby locking up those jobs which could be taken by younger and unemployed workers. These older workers hold onto their jobs because they would lose their paid or subsidized employee medical care if they retired. I can name several personal friends who are holding onto their jobs in State service because they cannot afford to pick up the $1,200 cost of their medical premium on a reduced pension income.

The “job killing” effects from the lack of a national health care system don’t even end there. Conservatives are always touting how Small Business is the backbone of the American economy. My daughter runs a small retail and internet business. But she cannot afford to provide medical insurance to her three employees; one of whom just quit to take a job that does offer employee medical her family needs.

The economic downturn has driven a lot of small businesses out of existence. Here in my own town, each month I see yet another empty building where a business has closed. Restaurants and stores that have been in this town for decades are now gone.

My wife and I no longer go out to dinner or shop to the extent we used to – we can no longer afford it. With paying a medical insurance premium of $1,200 a month, $14,400 a year, most of my disposable income is paid to an out-of-town medical insurance company. Multiply that figure by the thousands of other people in town in my situation and you can imagine the amount of lost consumer dollars that could instead support the local economy.

True, European style medical systems are not free, and their citizens are taxed to pay for these and other benefits. But I have a very strong suspicion that Europeans don’t pay $1,200 a month in taxes for their state medical care alone.

Our lack of a coherent, universal and cost-effective public medical system is what is stifling or innovative spirit and economic revival - THIS is the true Job Killer. Not Obamacare.

~~~

My personal retiree factoid:
Just to give an example of how medical premium increases have outstripped income, in 2006 our group medical plan premium was $894 – in six years it has risen just under 30% to where now in 2011 our premium is $1,160. In that same time our retirement income has increased only 6.6%. The growth in cost of our insurance has outstripped our income by 4.5 times. After deducting the insurance premium, my wife's remaining net retirement check is less than $600.

Actually our premium this year would have been $100 higher had we not opted for the lower cost plan version. Unfortunately under the new plan, we have to change doctors; the physicians we’ve used for those past decades are not on this plan. Government private insurance company bureaucrats have now come between us and our physicians.

In six years of group insurance coverage we have been forced to accept four different medical insurance carriers. We had no practical choice in selecting other insurance plans.

Our medical insurance premium is now higher than was the mortgage payment on our house.

~~~

Further Reading: Experts doubt claims that health care law is a 'job killer', Pittsburgh Post-Gazette, February 13, 2011.

Bag your Tea, switch to Coffee

Well the Tea Baggers have won and Massachusetts voters have spoken and voted in a Republican to replace Ted Kennedy. So now the message is clear: “If you have your own employer paid health insurance, we don’t give a rat’s-ass if you die for lack of medical care, or go bankrupt over medical bills”. This country is increasing all about - “I got mine – go get your own”.

The Republicans can now block any health care reform proposed by the Democrats. This will be a slam-dunk as keeping Democrats on the same page is like trying to herd cats. Republicans, on the other hand, are like The Borg – They think in unison like the collective. Independent thinking is frowned on in the GOP.

Republican mouthpiece, Senator John Andrew Boehner is continually parroting “Americans don’t want Washington-Run health care.” I really want to ask him; ” …you mean like the Washington Run health care YOU enjoy, John?” Really, I think there is an opportunity here for the Republicans to make a clear statement about what the American people want really want – Republicans should all give up their government “Washington Run” health care and self-pay their own insurance. That way we Americans could be confident that the Republicans are not just mouthing support for the insurance industry and really believe their own rhetoric. I’m waiting!

The same thing for these dumb-ass Tea Baggers who don’t want “Obama Care” or “Socialized” medicine; let’s put all their names into a database so that when they turn age 65 they are denied Medicare. Well hey; we don’t want you guys compromising your ethics. Uh, just be aware that private insurance companies do want customers of Medicare age except under “supplemental” policies. So be sure to save your pennies to cover that that coronary bypass surgery because you sure as hell don’t want “Washington Run” Government to be involved in your health care.

I’m going to go out on a limb here and speculate, but I am guessing roughly around 100% of these Tea Baggers have completely subsidized medial insurance through an employer or other patron. We Americans never get charged up about an issue until it affects us personally. As much as I admire Candice Lightner, founder of Mothers Against Drunk Driving (MADD), she didn’t become an activist until her daughter was killed by one.

When my daughters were young, they asked me what the difference was between a Republican and a Democrat. I responded that a Republican wants America to be a place of opportunity for their family, their friends and other deserving people like them. A Democrat wants the same thing… but for everyone.

Medical (Insurance) Malpractice

I have gotten pretty tired of watching that Republican numb-skull Senator John Boehner yammer the party Mind-Speak in opposition to any type of medical insurance reform in this country. I was pretty much ambivalent regarding the increasing cost of health care until a recent incident with Regents Blue Cross Blue Shield pushed me over the edge.

To back up a bit – My wife and I are responsible for paying for our own group coverage through our retirement. Clearly, the health insurance industry as a whole needs to get an an eye exam; they seem to be rather blind regarding recognizing the parallels between what happened to the Housing Bubble and the ever expanding Medical Insurance Bubble.

Let me bring it more in focus with a very personal example -- Our own personal medical insurance premium costs:

• 2009 1,122.11 13.7% increase
• 2008 987.98 10.4% increase
• 2007 894.65
  

The annual percentage increase rate for medial insurance premiums is roughly what it was for the housing market. We all KNOW what happened when the housing bubble burst. As it stands now, just our medical insurance monthly premiums (not the additional co-pay and uncovered expenses), consumes 36% of our GROSS joint retirement income. And this is for coverage that covers less and less every year – I am paying a higher share of my co-pay for office visits as well as paying more for the insurance itself.

I pay more each year to get less coverage.

Do the CEO’s of Regents and other medical insurance companies really think this trend is sustainable? They’re not stupid – they are only looking out for their self-interest. They will unfurl their Golden Parachutes and bail when this bubble pops.

Recently Regents notified me that I can no longer take Lipitor to lower my cholesterol. I switched to the generic alternative which caused me to experience… uh, well symptoms akin to having eaten a Tijuana Taco. My request to go back to Lipitor (which had worked well for me for a decade) was refused. The ONLY reason Regents wants me to switch to the generic is to save THEM money! In turn they will charge me MORE in premiums and cover LESS of my visits and procedures.

In the mean time I watch Republican Senator John Boehner (yes, I will pronounce it “boner”) asking at a press conference “do Americans really want Washington-Run Medical?” YES, John – we do! We want the same Washington Run medical care that YOU get.

I am now personally motivated to do whatever I can to completely disassemble the current private medical care system in this country.