As congress finally takes on health care reform in the coming weeks, we will see and hear many viewpoints based on emotion and not rational thought. This is totally understandable because the decisions our leaders make will affect the care of our children, our parents, our spouses and us. There are a number of reasons why people are currently upset with our broken system: ever rising insurance premiums, rising numbers of uninsured people, and the financial devastation that a health crisis can cause a family, to name a few. Policy changes at a high level require decision makers to understand the consequences of their actions. Like other stakeholders, The National Association of Health Underwriters (insurance brokers) strongly supports reform to healthcare financing, but we also believe that prudence is needed as we proceed.
Since Single Payer initiatives are off the table right now, the administration and congressional leaders are proposing a public program that citizens could opt into. The thinking is that the government administered plan would initially compete against private plans which would win over the populace with similar benefits and lower premiums than private insurance. Employers will stop offering benefits and millions of people will gravitate to the new government run plan. Lower costs would be achieved because the government plan will reimburse doctors and hospitals at Medicare rates which are 20% lower than reimbursement rates from private insurers for hospitals and 30% lower for doctors.
Currently, hospitals and doctors offset low governmental reimbursement by shifting the costs to those with private insurance. Hospitals must accept Medicare reimbursement rates and many doctors choose to as well because it’s the right thing to do. However, once people migrate to the public plan, there will be a much smaller private insurance pool to shift the costs to, and we will have a new middleclass entitlement program demanding to be funded. Deficits will result. Deficits are unavoidable unless delivery costs are controlled or healthcare is rationed. Older doctors will retire rather than accept a reduced income, and medical students will hesitate to take on student loans of $150,000 or more if they aren’t able to make a reasonable income to offset that debt. Many doctors will refuse to accept the low reimbursements and instead will offer their services at market rates to those who can afford to pay for the best available care and who refuse to wait in line for an MRI or hip replacement. The USA will effectively have a two tier delivery system, one for those with expendable income and another for everyone else.
If we assume that government will not want this plan to become a huge drain on the economy, the real gorilla in the room must be faced: The rising cost of healthcare. Higher costs are the result of a number of factors such as improved technology, better and more expensive medicines, improved procedures that save the lives of many who would not have been saved even a decade ago, inefficiencies in our system that result in emergency rooms being the primary source of medical treatment for many, and (most significantly) our lifestyle choices. These choices we make (diet, exercise, smoking, drinking, chronic stress, and wearing seatbelts.) are a big reason that we are less healthy as a nation than most others in the industrialized world. While it is easy and fashionable to blame all our woes on insurance companies and the profit motive, it is just not that simple. The big driver in the escalation of the cost of health insurance is the cost of healthcare.
The National Association of Health Underwriters believes that a less radical approach to healthcare reform, which deals with the cost of care, retains our privilege to choose a plan design that best fits our needs, and which includes coverage for all Americans at affordable prices, would serve all of us better than heading down a road that we offers no place for a U-turn.
Front Range Association of Health Underwriters (Boulder, Broomfield and Adams Counties)