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Health Insurance Frustrations Emerging As Campaign Issue

Insurance premiums are poised to spike just before the election.

As health insurance companies set rates for 2019, the country is about to be reminded of one of President Trump’s biggest failures, the failure to repeal or reform Obamacare. Republicans made several attempts in 2017 to reform the Affordable Care Act, but failed to garner even the simple majority required to pass the measure under budget reconciliation rules. Now their inability to fix the law is coming home to roost in the form of higher insurance premiums for many Americans.

If you listened to President Trump last December, you might think that Obamacare was repealed. In reality, Republicans repealed the law’s individual mandate, but left most of the ACA intact. Repeal of the mandate without fixing the rest of the law might actually worsen the problem of rising premiums as young, healthy insureds flee from the expensive policies still mandated by Obamacare.

In March, the Wall Street Journal forecast that health insurance premiums would be an election issue after Congress failed to agree on a stabilization (i.e. subsidy) bill to shore up the individual health insurance markets. Now that forecast is starting to come to fruition as the first announcements of premium increases are being heard. Maryland, one of the first states for which information about the new insurance rates has become available, has insurers proposing an average increase of 32 percent. The proposed increases range from 18 to 91 percent.

Announcements of rate hikes, along with news of insurers withdrawing from Obamacare marketplaces, have become an annual tradition in the years since Obamacare was implemented, but rising health insurance costs don’t just affect those Americans on individual plans. Marketwatch recently reported on a study that showed that rising health insurance costs contribute to slower wage growth among the nation’s workers, many of whom are covered by group plans purchased by their employer. Group health insurance premiums were forecast to increase by about four percent for 2018.

Americans are getting less coverage despite paying higher premiums. Spending on deductibles and coinsurance, the patient’s share of medical bills, has increased in recent years as copayments have covered less. Whether you have an Obamacare plan or an employer-based plan, you are probably paying more out of your own pocket for health care than you were just a few years ago.

There are also hidden limitations that you only find out about when you have a claim. As an example, my wife had to go to the hospital in an ambulance last year. Six months after her hospital stay, we received a bill from the ambulance service asking us to pay more than $4,000 for a 30-minute ride. When I followed up with Blue Cross Blue Shield of Texas, our insurance company, I was told that the ambulance service was out-of-network. When I pressed further, I found that Blue Cross did not have any ambulance providers in their network in the entire state of Texas. As a result, Blue Cross paid less than $1,000 on a total claim of more than $5,000.

In the United States, the way that we buy health care is totally disconnected from markets and economic reality. If you have any idea what you will owe a doctor for something as simple as an office visit, you are in a minority of consumers. The problem is even worse if you go to the hospital for tests or surgery where several billing entities from the doctor to the anesthesiologist to pharmacies and labs and the hospital itself are involved. Prices are not known until after the service is provided. In many cases, the patient doesn’t even know what services are being provided or by whom.

In another personal experience, I went for a colonoscopy a few years ago. I discussed the cost of the procedure with the doctor and the hospital before I was admitted, but when the bills came later, it was more than three times what I had been told to expect. After months of running between the hospital, the doctor and the insurance company, I traced the problem to an error in the diagnostic code. It took many more hours on the phone to get this code corrected. Many patients probably simply pay incorrect medical bills without questioning whether they are correct or taking the time to investigate.

An accounts receivable representative for the ambulance service that we used told me that, because Blue Cross is hesitant to pay ambulance bills, they often send shockingly large bills to the patient. Part of the goal is to get the patient to put pressure on the insurance company to pay up. The provider doesn’t necessarily care where the money comes from as long as they get paid and the insurance company is happy if patients pay the bills and let them off the hook.

Because of the lack of competition in the healthcare system, Americans are left without options when health insurance companies misbehave. The majority of Americans who get their health insurance through an employer have no input into the choice of a health insurance provider. You can only decide whether to participate in or drop an employer health plan during open enrollment. If you decide to buy insurance from a company other than your group health provider, you lose the employer contribution to the premium. This means that you end up paying far more to buy your own health insurance that you would if you participated in the group plan.

The problem is similar for workers who like their company’s group health plan, but who leave their job. Coverage may not start at a new company for several weeks. In the meantime, health insurance premiums for your old plan may from a few hundred dollars to more than thousand.

Frustration with the existing health insurance system is probably a major reason why a majority of Americans now favor a single-payer system (i.e. government-run universal healthcare). Several recent polls have shown growing support for more government involvement in health care. In April, a Washington Post – Kaiser poll found that 51 percent of Americans favored single-payer. Gallup and Pew found similar results last year. The increasing costs and decreasing value of private health insurance is undoubtedly leading many Americans to embrace this radical idea.

Republicans have damaged themselves on the issue. The Republican health bills of 2017 were so unpopular that they turned public opinion around on Obamacare. After years of favoring repeal of the ACA, more Americans now oppose repeal than support it. CNN polling from March shows Democrats with a 20-point lead over Republicans when voters are asked which party would do a better job on health care, the largest gap of any issue.

At this point, there are no signs that Republicans are interested in fixing the health insurance problem. President Trump is basking in recent foreign policy successes, but Republicans may be hurt in the midterms if attention shifts to domestic issues like healthcare. Korean détente may mean that voters focus more on pocketbook issues instead of national security. If health insurance prices spike in October and November as Obamacare exchanges and employers hold open enrollment for 2019 health plans, it could provide Democrats with a much-needed issue with which to hammer Republicans.

Do you have a health insurance horror story?

I'm not sure how this will play out politically, but the lack of a fix for healthcare dysfunction is obvious. Trump gets this in part by pushing for drug cost reform. Whether he is successful on that or on premiums generally, he can at least say that he feels your pain. Sometimes that's enough. Ask Bill Clinton.

The core problem I see in healthcare is that ultimately we do not want a free market based around health.

What is the fair market price for a pill that saves your life? Is it your expected life income from that point forward?

It seems Americans do not want the invisible hand to work at setting prices and costing insurance.

Nor do Americans want ro pay the real cost of healthcare. Their companies have for years and now that employee benefits are slipping they want the government to pick up the tab.

Really the only way the American public will be happy is price control, transparency with health care costs, and the government paying for everything.

Dems are evil, the GOP incomptent: what could go wrong!

I'm not sure what the difference is between Democrats and Republicans. They all vote for bigger government with more control over the public. They continue to get their big salaries, fully paid health insurance and job security while the rest of us live with smaller salaries, high insurance premium/costs and no job security.

@BenjaminD - whether it is true or not that the US population at large does not want “the invisible hand” to set prices, I would argue that we have the discussion framed completely wrong. We argue about individual responsibility vs individual rights. Let’s begin looking at it the same way we view public education. Society has an obligation - for the good of the society as a whole - to provide the population with an entry level education. Period. Some blokes end it there and make themselves a success or a failure or in between. Some blokes carry it on to higher education that may or may not pay off for them. But that’s their choice. I would propose that society has an obligation - for the good of the society as a whole - to provide a basic level of health care to the population (and face it that the county health department is inadequate in most cases) while private hospitals and private insurers could court individuals in a free market. Some blokes would accept the minimum level, and some would opt for more.

But the endless bickering with the conversation framed as it is now is worthless.

To raise cost get the government involved. Leave out half the equation dealing with malpractice insurance. Insurance is high enough for the citizen, without covering the illegal. There are no controls on medical administration or drugs. The rate for commissions stays the same. Check on the overlap of coverage in all the medical programs written into law. Planned Parenthood was wrapped into Obamacare. The only part of the Obama that is sticking is the executive order parts of immigration, and the wrecking of our health system. Congress had no backbone, and the courts are too slow.

Great article! I always said the reason we got Obamacare was due to the Republicans lack of interest in reforming healthcare when they were in power during the Bush years. In short Obamacare was the only option on the table. Now with Obama gone and the GOP back in control they blew a chance to rid ourselves of Obamacare because they had no viable alternative. If we one day wind up with single payer and all the problems that brings we can thank this feckless Congress for delivering it.

Know that both parties are big government driven. The Communist Party, nee DOC, wants to socialize medicine at 100 mph and the Grand Old Politburo wants to socialize medicine at 50 mph. What is lost in the discussion is that the federal mafia cannot has not and will not ever manage anything effectively. They have no bottom line and their only product is red tape and bureaucracy. The print and spend mentality is how the political prostitutes work. Obamacare was never about health care. It was about the government taking over one fifth of the US economy on the road to socialist serfdom.

There is a web site where you can look up not only price range (medicare - medicare x 5), but estimated benefit of diagnosing any particular disease or even just a symptom.

browns-almanac.com

this is in development, there is a button on the home page (bottom) for comments.

Every person outside of the United States has single payer universal healthcare so it is in no way a radical idea. The rest of the modern world has had it for many many decades now. It costs them less and they are clearly happier with it.

Free market system isn't going to work and Americans are not going to allow it and support for single payer is just going to continue to go up as our current system prices continue to go up. Maybe just expand Medicare and/or Medicaid for all Americans. Americans with Medicare/Medicaid are pretty happy with it. Or have the government pay private companies to provide insurance like many 1st world nations do. It is not fair that only old and lower income Americans get Medicaid and Medicare. Middle class AMERICANS are the only people on the planet who get screwed over on healthcare like this. Republicans are losing on this issue and if we don't embrace single payer on our terms then the Dems(and probably a few "moderate Republicans") will get it done on their terms and they will get the credit and win the elections. Call it "Trumpcare" and get it done and get the credit and deny the Dems the future win on this while we still can!

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David, WHAT news have you been watching this last year? What blogs you reading?!? It was NOT TRUMP that failed us with rewriting Obamacare, it is flat right on the lap of that ancient fart who now is trying to negate not only Trump but Palin and anyone else that's told him he's a fool. Yeah - McCain - Remember?!? ONE VOTE! One. His. It was not Trump it was the Senate. Period. GOP "Leadership", especially in the Senate, so this can be laid right at the feet of Mitch McConnell, too. If you're trying to lay this on Trump, you aren't much of a reader or a poor reader.

@BiggDoggie

Um, Mitch Miconnel isn't the guy who decided to push for repeal of a 60-vote bill with 52 (Soon to be 51) votes...

That was Trump.

The bill McCain 'killed' was a fig-leaf, not repeal.

@Chris.shmo

Yeah, no thanks...
I'll keep control over my own healthcare, rather than submitting to a system where the government can order the death of your child because they don't want to pay for his care.

I'll retain the ability to choose experimental or unpopular care options, by paying out of pocket for them...

The rest of the world is not America. The rest of the world lives in apartment blocks, walks everywhere & thinks they are better for it...

The rest of the world doesn't have a right to free speech, or a free press, and their freedom of religion is often quite curtailed...

The rest of the world pays $5/gal+ for fuel.

So let's NOT import bad ideas from the rest of the world, thanks much...

Stopping single payer is a hill to die on. Same for regulation of CO2.

Mrb7, we did quite well in education BEFORE the government got involved. We now have a system in total chaos; students graduate HS unable to pass a college entrance exam and without any skills for the jobs available. College is not better, degrees are passed out regardless of the education provided the student or received by him/her. Degrees that are worthless in the workforce.
Healthcare is not so different. We had a system that delivered quite well for most people. For the majority their employer provided coverage for the basics, or more in some cases. Medical care was affordable and competition made it so. When government intruded into the market with Medicaid and Medicare the market changed. More regulation by government resulted in greater cost for the medical care providers and they raised prices as the result. The government introduced “price control” on the provider. The fee for service had to be increased to offset the additional cost associated with meeting government regulations. Complying with regulations caused more “paper work” and required additional personnel and resultant cost. Doctors needed to see more patients to “pay the bills” and that meant spending less time with each patient. Eventually doctors employed Nurse Practitioners who were paid less than a physician to increase the patients that could be treated. Insurance providers were following by paying out more in claims and increasing premiums as the offset.
All the above has created more interest in a single payer system; which is popular with democrats and other socialists’ advocates. GOP is slowly moving in that direction and once we are there, there is no return. We saw that with the attempt to repeal the ACA. Legislators on both sides do not know how to go back to what we had! The “average” citizen doesn’t understand the complexity of the situation; they just want healthcare at a price they can afford. They demand the government “fix” the problem, which will result in more government involvement. When the system crashes, as it surely will, the fix will be single payer system!

Socialized, single-payer, government-controlled healthcare will eventually become excellent healthcare for the wealthy and mediocre care for everyone else. Period. Anytime the government gets involved in an industry (and yes, healthcare IS an industry), quality goes down and cost goes up. Bureaucrats have no incentive to do any task economically or fair. Their main concern is to keep their job (forever) which usually involves getting enough funding to have in order to spend enough to keep the public happy so they can keep their job. Rinse and repeat.
Anyone really interested in solving this problem should study the various Christian healthshare ministries programs - it’s a system that works for most people and participation has increased astronomically since Obamacare passed. It could be paired with a welfare-type, high-risk program run by states or feds for those who don’t qualify. The massive regulations are going to have to go away too.

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