Health Insurance Should Be Illegal

By
Industry Observer
http://actvra.in/ydv

The current debate on health care reform is not actually about health care, but rather about health insurance.  Health insurance companies do not provide health care, they facilitate the overcharges made by real health care providers.  They are only the villains insofar as they are following the instructions of their policyholders, "Pay the providers whatever they want." 

Prior to the widespread availability of major medical insurance coverage, doctors, drug companies, laboratories, hospitals, charged what an average patient could pay.  In the "60's, it cost about three weeks pay for an average low level, clock punching worker to pay the doctor and hospital for the birth of a child.  How many months pay would a comparable wage earner need to come up with today?  I don't know exactly, but the existence of insurance facilitates the overcharge.  Consumers look at a huge medical bill paid by insurance as our just reward for high premiums.  It's not a reward, it's the reason for the high premiums.

The current direction being taken in Washington is fixing only the health care providers' desire to overcharge everyone in America.  They are losing a chance to gouge forty million or so Americans, and we are going to fix that.  We are going in exactly the wrong direction.  Health insurance should be illegal.  Providers should be forced to collect for their services on their own.  The free market will fix the prices if we all actually have to pay them.   Competition will work in our favor if we just get rid of insurance. 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Christine, health insurance companies' executives may be overpaid, but, even if insurance spent 100% of every dollar on paying the providers, health care would still cost too much.  The most ardent critics of health insurance claim that the insurer keeps 27% of the premium.  Decrease the cost of care by 27%, and it still costs way too much.

Dec 21, 2009 10:02 AM #3
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Geoff, do you really think that an insurance company can be entrusted with that responsibility?  Would they act in your best interest?  There is certainly a difference in quality of care that is not reflected in price. 

Dec 21, 2009 10:04 AM #4
Rainmaker
416,545
The Scott Loper Team Lansdale & Harleysville PA Homes
Keller Williams Real Estate - Montgomeryville - Lansdale, PA

While I agree that Washington is heading in the wrong direction with the current health care bill (and just about everything they're doing as our "representatives"), the notion of abolishing health insurance is a bit too extreme for me.  What if that birth of a child resulted in a premature baby that needed to remain in the hospital for 6 weeks.  Or what if a family member gets cancer and needs specialized and extended care and treatment.  These are the situations that can bankrupt a family without insurance (even if you bring today's ridiculous health care prices back down to reality).

I tend to agree with Geoff that removing the competitive restrictions on buying health insurance across state lines would be a big step in the right direction.  I also believe that tort reforms/limits would be another big step in the right direction.

-Scott

Dec 21, 2009 10:19 AM #5
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Scott, expanding the profit potential of health insurance companies will do absolutely nothing to lower health care costs.  What do you suppose happened when there were complications of a child birth prior to the advent of major medical insurance?  Cancer has certainly existed a lot longer than insurance.  Before insurance, providers still provided care, and they worked the cost out with the patient.  Insurance just made it more profitable.

Dec 21, 2009 10:27 AM #6
Rainmaker
64,764
Raine Carraway
Lenoir, NC

Mike, I totally agree. The insurance system is ridiculous, and making it mandatory is only going to contribute to the problem.

I have insurance now, through the largest provider in my state, and the co-pays are outrageous, for very little actual coverage [this is through my husband's employer's plan - if we had bought it privately, just to cover the two of us with maternity coverage for myself would cost the equivalent of the average salary for our home county]. I am still paying almost $3,000 out of pocket for maternity care, with no complications, in addition to the regular co-pay for doctor's visits.

The irony is that I went through leukemia treatment several years ago [mostly handled with medication, only a few chemo sessions, but many specialist visits & lots of lab work] , without insurance or medicaid. In that case, the hospital worked with me by offering a payment plan [with no interest as long as payments were current], and my oncologist charged a lower fee for patients with no insurance. Even though it was more expensive overall, my monthly cost for cancer treatment with no insurance [which lasted 3= years] was lower than my current out of pocket monthly cost to cover normal maternity care.

 

 

Dec 21, 2009 10:37 AM #7
Rainer
40,897
Suzy Morris
Keller Williams Realty - Carlsbad, CA

I would trust a private company over government any day.  It is apparent by the payoffs this weekend to secure votes.

Dec 21, 2009 10:47 AM #8
Rainmaker
416,545
The Scott Loper Team Lansdale & Harleysville PA Homes
Keller Williams Real Estate - Montgomeryville - Lansdale, PA

Mike,

Prior to the advent of major medical insurance, I believe that complications with a birth or cases of cancer often resulted in a quick death for the patient (which is obviously a much less expensive but undesirable outcome).  This was not due to a lack of insurance, but because medicine and technology were just not as advanced as they are now.  Even before major medical insurance (when costs were much lower), families could not always get out from under the costs of hospital and doctor's bills due to care from a catastrophic health issue (I saw this within my own extended family).  I don't deny that the insurance companies are a large part of the problem with the costs right now and reforms there are needed, but eliminating health insurance altogether would be a huge mistake in my opinion.  If eliminating health insurance and having the patient always pay the costs out pocket was the answer to this problem, I have to ask - why have any insurance at all (homeowner's, auto, life, disabililty).  It's not to protect against those everyday occurances, but the really big problems that we all hope never come our way.

-Scott

Dec 21, 2009 11:01 AM #9
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.
Scott, other types of insurance do not facilitate buying of the insured product. To put it in perspective, if we had "home insurance," we would pay a premium to a company and they would provide us with a house which would conform to the specs in the insurance policy. That would be a dream situation for the builders, wouldn't it? Do you think that might raise the price of houses? Without medical insurance, maybe hospitals would find it unrealistic to charge ten dollars for an aspirin, or maybe they would have to compete with each other for room rates, etc. How many folks have catastrophic medical events that don't wipe out all their resources? I suspect, not very many. With health insurance, you can still lose your home and life savings, but the health care providers get their ridiculously high bill paid. Great system.
Dec 21, 2009 11:15 AM #10
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Raine, exactly my point.  There is no price competition as long as there is insurance.  

Dec 21, 2009 11:22 AM #11
Rainer
241,202
Douglas Fischer
East Oahu Realty - Selling Honolulu, Hawaii Condos - Honolulu, HI

Way too much money is being made by the insurers, and unfortunately it's all coming out of our pockets.

Dec 21, 2009 02:22 PM #12
Rainer
13,891
Stephanie Jarman
Realty Executives - Paola, KS
Realtor Kansas City Homes and Land for Sale

Such a fascinating idea. I had my daughter on a self-pay program thru a local hospital because I became pregnant before my husband's insurance would cover the pregnancy. Even with a brief ICU stay for us both, it was STILL CHEAPER to pay out of pocket with the payment program the hospital offered me that my portion alone would have been WITH insurance. That was an "aha" moment for me! Thanks!

Dec 21, 2009 06:30 PM #13
Rainmaker
1,411,345
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

Very thought provoking post no doubt Mike, I hadn't really thought about it that way and Stephanie has a really good point.

Dec 26, 2009 10:23 PM #14
Rainmaker
1,108,649
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

The problem with health insurance is that someone long ago thought that simple checkups and body maintenance visits to the doctor should be covered by insurance.

Insurance is for catastrophic events!

My auto insurance company doesn't pay for my oil changes, or tire rotations, or windshield wiper replacements.

My home insurance company doesn't pay to replace the filter in the heating/cooling system, or the replace the screen door that I walked through last night.

Why should health insurance companies pay for my annual physical? Or my run to the doctor with an incessant cough or the sniffles? Or my sprained ankle? Or even my broken ankle for what it's worth?

Life happens, and part of life is taking care of yourself, and sometimes getting banged up. Insurance should be for when one has to spend a month in the hospital, or have heart surgery, or cancer treatments for the rest of one's life.

Let's put an end to abuse of health insurance!

Happy New Year!

Dec 27, 2009 07:40 PM #15
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Jim, if you had a catastrophic health event, do you think the health care providers would charge more or less when you had insurance?  What should be covered by insurance is answered by just which procedures you would like the provider to overcharge. Insurance benefits the providers a lot more than the policyholders.

Dec 28, 2009 08:09 AM #16
Rainer
25,777
Bo Bromhal
Fonville Morisey - Raleigh, NC

Saying Health Insurance should be Illegal, and then placing the blame on the PROVIDERS, that is - the doctors - doesn't seem right and no one seems to have picked up on it. Or maybe that's not what you meant.  But you quickly said:

they facilitate the overcharges made by real health care providers.  They are only the villains insofar as they are following the instructions of their policyholders, "Pay the providers whatever they want." 

You give us an example (presumably your figure is correct) of 3 weeks wages for a birth, then you just fail to care what it may cost today.  Before inferring that a)doctors make a lot more today than they used to and b) they're overpaid for what they do (hmmm, ring a bell?) please provide something of a factual basis in comparing to reach your conclusion.

And for any fellow Realtors/licensed agents who have their own health policies, I would urge you to consider an HSA - the differences in cost for a "healthy" family are ridiculous.

 

 

Jan 03, 2010 08:20 PM #17
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Bo, why do you think health care costs so much more today, relative to costs for everything else on this planet?  The most ardent critics of health insurance claim that the insurance is responsible for 27% of each dollar spent on health care.  Even if we could eliminate that 27%, the cost of health care would still have risen way more than any other, including energy.  No, I don't blame doctors alone, although the AMA's attempts to limit their numbers in the US seems plausible.  There is a fair gap between doctor fees charged by clinics and the amount of dollars going to the doctor.  I don't know if doctors get paid too much or too little, but I do know that the fees charged for doctors' services seem too high.  That said, there are others in the provider stream who are more easily identified as overcharging.  Look at any itemized bill from a hospital and you'll see what they charge for things we understand like an aspirin or a band aid.  Then we have the illustrious drug manufacturers.  Try to defend their practice of charging US residents more than anyone else in the world.

If it were not for insurance companies willing to pay whatever the providers charge, the charges would be scrutinized carefully by consumers before they wrote out a check.  These charges are not the fault of insurance companies not doing a good job.  To the contrary, they are exemplary in the performance of their tasks -- collect the ransom for the providers.

Bo. in your criticism of my example, I'm not sure what you want me to provide.  I have a hospital bill from 1969 for services and four days stay for $205.  That represents about sixty hours pay for an average wage earner that year.  I have a statement from the physician who provided pre and post natal care and obstetrics for $150.  That represents about forty-five hours pay for an average wage earner that year.  Average entry level pay was about 25% less than that.  That's the basis for my three weeks wages statement.  Today, anerage pay is about six times the 1969 amount.  If we factor that into the 1969 bill, we get something around a couple thousand dollars.  Is that about what it would cost today?  Don't think so. 

Jan 04, 2010 08:44 AM #18
Rainer
120,167
Brenda Carus
Century 21 Zwygart Real Estate - Monroe, WI

Health care is a real hot topic, isn't it?  The misuse of the system by so many people is shocking.  Really, do we need to go in for every cold, fever and cough like many people I know do?  People are unwilling and sometimes unable (due to lack of common sense and first aid knowledge) to take care of every day illnesses and injuries.  Personal responsibility is sorely lacking in our health care decisions.

As for the obstetrics information you cite, the costs are amazing, aren't they?  Our oldest was born via c-section 11 years ago, and the bills topped 15K, just for the birth itself, not the pre and post natal care.  Now, an average, uneventful birth can cost that.  Our other three kids were born at home.  Those births cost us about $1500 each for all care (prenatal, birth and postnatal), less than our co-pay for the c-section birth.  Twice our insurance company paid for the homebirths, saving themselves thousands and thousands of dollars.

Jan 07, 2010 11:19 AM #19
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Brenda, thanks for your comments.  I know of one MD in the Chicago area who had his residency terminated by a hospital because he participated in home births.  The yield management tactics of providers is something that needs examining.  More on that topic later.

Jan 08, 2010 04:29 PM #20
Anonymous
Ken

Health insurance should be illegal and replaced with health care pretax savings accounts and emergency care insurance for any major long term health issues. 

By all means we should shop around for procedures, nothing will change as far as regulation and trust me word of mouth is much better then selecting a provider from a list the insurance company provides you with.

I worked in the industry for close to 10 years in provider relations department. Part of my job was to meet and recruit Dr's and trust me the bar is set pretty low. The insurance company in most  cases is the first person a patient calls when they have an issue with a Dr. and they keep a file on him and he has to come close to killing someone on more then one occasion before they remove him/her. 

On some of these HMO plans the provide gets paid a small monthly capitation per member they accept. I had one Dr that had 5k patients per insurance company to earn what her wanted to earn plus pay his expenses. What kind of care do you really think your getting from a DR with 6 HMO insurance contracts 4 PPO contracts plus cash patients who get appointments within 24hrs just because they pay cash

All we need is:

1. Catastrophic coverage

2. Health care savings accounts 

the savings accounts would be pretax dollars and not attached to a job, they belong to you and move with you. Your  employer could match contributions as they do with 401k plans if they would like as, it would be a lot cheaper then paying half of you insurance PREMIUM. 

3. The poor would get a prepaid benefits card to spend on health care only as they wish and the government would pick up on catastrophic coverage ... this is a lot less expensive then what is currently being spent.  

Look you have eye doctors and most of their customers are cash pay. A lot of dentist are walking away from insurance companies because they realize they cant give the same quality of care when they have to accepted 5k patients @ $10 a month just to cover their overhead.

 

Laser Eye surgery, cosmetic plastic surgery, all serious medical procedures that are not covered by health insurance yet they there are no more medical errors or mistakes in these fields then what er consider a standard surgeons practice. But look at the cost look and the creative finance plans, same quality lower price!

Apr 07, 2012 01:23 PM #21
Rainmaker
442,019
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Ken, I think your argument is valid and agree with most of what you have written.  The HMO type issue is as old as Blue Cross and college scholarships.  As long as there are others willing and able to make up the difference, an HMO can get away with paying providers pennies on the dollar of provider cost.  That's how athletic and other scholarships are usually funded, on the backs of the full priced students.

I still believe that the industry would be forced to charge what most patients could afford to pay if there were no health insurance.  If the government feels the need to provide sustenance for the poor, medical care should be treated the same as any other living expense.  With the size of government and the number of people on the dole, there should be no need to involve an insurance company to spread the risk.  Just make a decision to pay or not to pay based on what is reasonable and necessary.

Apr 08, 2012 07:02 AM #22
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Rainmaker
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