Healthcare Reform: Bending The Cost Curve on The Backs Of Patients

After reading Bob Herbert’s column on how the Senate’s version of the healthcare reform bill is nothing but a tax hike that will adversely affect the middle class, It struck me how really awful this bill is for patients.

Divide and conquer is a time honored technique used to advance an agenda especially when it is unpopular, and the Senate played into our worse instincts.  It sounded great to tax the “fat cats” who have the best health insurance policies to pay for extending coverage to those without health insurance. The way it has been framed, it seems that the wealthy have somehow been gaming the system and denying precious pieces of the health care pie to those who cannot afford insurance.

This argument works until you realize that the average middle income individual is actually the one who has the ‘Cadillac’ policy. When you do the math, you realize that the $23,000 policy for a family is approximately $1900 per month. The $8,000 policy is actually $667 per month. These policies generally represent the PPO products. These are the types of insurance plans which give patients the freedom to see whatever doctor they choose including access to specialists without needing a referral from a primary care doctor. Generally, the health maintenance organization (HMO) and point of service (POS) insurance plans are much more restrictive and less expensive than the PPO products. These plans work by assigning the patient to a primary care physician and restricting the patient to a doctor in network. The primary care physician acts as the gatekeeper (i.e., he or she decides when and if the patient gets a referral for testing or to see a specialist). There are no out of network benefits with the HMO so if the patient decides to go around the primary care physician to see a specialist, the insurance company will not pay any benefits and the patient will have to pay for it out of pocket. The POS product has out of network benefits, but the patient will generally have to pay a significantly higher amount out of pocket.

The Senate bill will effectively take away an individual’s choice because the employers offering these plans and individuals who want them will be priced out – 40% is a steep tax to overcome. In addition, the number of people affected by the projected rise in insurance premiums will put an ever increasing number of people in this tax category. At some point the insurance companies will stop offering the product all together when the market forces exert enough pressure. In the long run this will benefit insurance companies because patients and providers will get so fed up of running in place on the hamster wheel of referrals and waiting to have testing done or to be seen by a specialist that they will eventually get tired and will give up. The insurance companies will essentially offer less covered services for the lower premiums. Either the individual will pay for the services or not have them at all because they can’t afford it.

Having us point the finger at each other is the latest form of distraction being used to push a lousy bill that tries to bend the cost curve on the backs of the people who this reform is supposed to help. Not only will there be fewer providers for patients to see leading to longer waiting times, but the insurance that people will be mandated to carry will effectively ration care by limiting access to available providers and treatments. This reform bill has nothing to do with improving the health of the people in this country – but maybe that’s the point.