-- Posted by Neil H. Buchanan
In my post yesterday, I used some recent personal experiences as the springboard to discuss the complexity and perversity of the current U.S. health care system. Even as a person with stable long-term employment, an upper-middle class income, and relative sophistication when dealing with legal matters, I have found that the current system is so opaque that it can only be even partially understood after a person has an incident that triggers insurance coverage.
I noted, for example, that my most recent experience with an emergency room visit resulted in a total out-of-pocket cost to me of over $1,200, a number that was more than twice as high as it should have been, because of the mere happenstance of the "network status" of the ambulance that took me to the hospital. I should have added, moreover, that there is no way for me to be sure that this is really the total. For all I know, there are other adjustments and costs that are still working their way through the system. Because so many different providers (labs, ER doctors, ambulances, radiologists, hospitals, and so on) bill the patient separately for their services, and because the health insurer applies its bizarre rules to each bill, there is no way for a patient ever to be sure that it really is over.
The perversity of the system, however, is not merely a result of the nearly impossible task of understanding the consequences of whatever choices one has in choosing among health care and insurance options. The insurance companies also do a very good job of creating perverse incentives within their systems, using the cover of "discouraging excessive and useless medical care choices" as a reason to shift ever-greater expenses onto individuals and families.
A reader's two-part comment on yesterday's post described a few of the even more perverse incentives in the world of Medicaid, with its combination of private providers and state and federal funding. Because Medicaid is for poor people, and because it is a big part of states' budgets, the system appears to be set up deliberately to make people worse off (with governors constantly looking for ways to bleed money from the system). Complaining about this, however, seems somewhat inappropriate, given the news earlier this week that states are cutting Medicaid benefits for single, childless people who are working at low-wage jobs. The only thing worse than bad coverage is no coverage at all.
So where are we? The poor are losing coverage entirely. Many working people have no benefits and thus no health insurance. Those who are fortunate enough to have jobs with benefits are losing coverage or, in my case (the least sympathetic, in most ways), bearing ever greater burdens under rules that discourage people from using health care even in situations where it is obviously called for (for example, life-threatening head injuries).
What about the wealthy? The standard response to those who point to the high quality of care that is available at many facilities in the US has been, "Yeah, if you can afford it." If I were seriously ill, and money were no object, I'd rather be in New York than, say, Calgary. If I had to choose where to live purely on the basis of my expected longevity and health, however, any US-based location loses not just to Canada and France and England but even to unlikely places like Malta. Living in a place with cutting-edge medical technology does no good to people who have no access to it.
It turns out, however, that even fewer people can afford it here than we thought. In an op-ed last week, Donna Dubinsky, the co-founder of Palm Computer and Handspring, described her attempts to buy health insurance coverage when she no longer had access to an employer-provided plan. She readily acknowledged that she is financially well-off, and she began the process thinking simply that she would have to be willing to pay the price for insurance in the individual market. She described, moreover, why the health care system in the US makes it important for people to be insured, even if they could afford to pay standard expenses out of pocket: uninsured patients are gouged on prices, and even well-off people can spend down huge fortunes if they are afflicted with the worst kinds of diseases.
Dubinsky found that even the most minor health issues (in her case, a corn on her toe) count as pre-exisiting conditions, sufficient for an insurer to deny coverage. Being denied coverage itself became reason for other companies to deny coverage. Finally able to cobble together different policies to cover her family, her premiums have been growing at 20% per year ever since, even on policies with high deductibles and other costs. Even being truly wealthy, in other words, did not save Dubinsky from being nearly locked out of the current system.
Regular readers of this blog know that I have been harshly critical of President Obama. On deficits, on the environment, on Gitmo, and certainly on health care, he has been a bitter disappointment. The health care bill that has become so controversial was, overall, a tragically lost opportunity. Relying on the notion of creating more competition between insurers is a nice idea; but with each insurer offering the same complicated set of impenetrable options (and ex post surprises), the fundamental premise of the bill is deeply flawed.
Even so, as the new majority in the House spends ridiculous amounts of time trying to repeal what they so snidely and childishly call "Obamacare," it is worth remembering how bad the current system is, and how the new law will improve some important parts of what is wrong. The Affordable Care Act will prevent insurers from denying coverage for pre-existing conditions. It will make it impossible for insurers to drop patients once they become sick. It will make it more likely that people can join (or remain members of) employer-provided plans, and it will at least attempt to make non-employer-provided health insurance more affordable. Moreover, it will provide coverage for the tens of millions of people who have been forced to do without insurance, coming closer than ever to universal coverage.
While it might appear that the one group of people this law does not help is the group that includes me -- people currently with employer-provided coverage that, while increasingly expensive, is at least not leading to bankruptcy -- the reality is that I could lose my coverage tomorrow, if the condition for which I have recently been treated is deemed a reason to drop me from the rolls. Those who benefit from the new law thus include those who currently need its protections, and those who might need its protections some day. In short, nearly everyone.
Professor Dorf has written persuasively (most recently here) that the ongoing constitutional challenges to the new health care law are baseless. As a policy matter, even though the Congress that passed that law refused to enact many better choices, what they passed will make matters better. Our health insurance system is a disaster for many, and a disaster-in-waiting for nearly everyone else. The Affordable Care Act will make it somewhat less so. That is progress.
"We must not let the perfect be the enemy of the good" was the admonition against people like me, who spent last year saying that we must do better. Today, there is an even simpler admonition: "Don't go backward."