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And So It Begins

The passing of health reform is barely a month old and we’re already getting a sampling of how the health insurance industry plans to respond. I first want to take a moment to pat myself on the back for (a month ago) predicting that things were going to get a whole lot worse over the next four years, before they got even a little bit better. Okay, moving on from my self flagellation.

I want to share a few health insurance stories from my friends over the past month since I’ve already shared my stories of corporate premium increases.

A friend of mine got his renewal options from Blue Cross of California a few weeks ago. I had braced him for a 30% – 60% increase since that’s what I’ve been seeing from Blue Cross for small business rate adjustments. He emailed me to let me know that his rates had gone down by $300 a year. I was naturally immediately suspicious. I had no doubt that the new plan was going to cover far less than the old plan, and that there were likely new stop losses written into the plan to limit Blue Cross’s exposure if my friend had the audacity to use his health coverage. He emailed me the plan summaries for his old plan, the new plan, and two “cheaper” options that Blue Cross offered his small group.

Blue Cross did exactly what I suspected they did. Some of the changes include:

Increasing the annual out of pocket maximum.

Capping the annual coverage for office visits to $750 per year. Think about that one for a second. Blue Cross is only going to pay out $750 per year (unless you experience a hospitalization) on a plan that collects $5,000 a year in premiums.

They included lab work in that $750 a year maximum reimbursement. Lab work routinely costs $500 – $800 for basic blood tests.

Blue Cross is no longer covering the cost of any medical supplies that you may need. So if you end up in an accident and end up needing a wheel chair, oxygen tank, or anything else as part of your rehabilitation, you’re shit out of luck.

Another charming change that they made last year, is that PPO subscribers can no longer go to their own physicians for annual physicals. They must instead, go to a Blue Cross clinic to be seen by one of their physicians. Appointments must be made 60 days in advance. Let me translate what this means. It means that Blue Cross couldn’t get most physicians to agree to administer preventive exams for the low-ball reimbursement rate that they offered. So what they did was to limit their subscribers to only having the option to see the physicians that did agree to their (very likely) absurdly low rate. Why would one doctor agree to do a procedure for a fee that most doctors refused to do it for? Because they’re trying to build up a practice! You no longer have the option of seeing an experienced doctor to do your annual exam if Blue Cross is your insurer.

Remember all of the stories in Sicko about people who had insurance, only to¬† discover that their coverage had huge gaps in it? Remember how all of those people who had paid their premiums their whole lives were forced into bankruptcy because of all of those gaps in coverage? Guess what? Those people are you. And if it’s not you right at this very moment, it’s going to be you as soon as your renewal happens.

A month ago, I predicted that by the time this health reform bill fully kicks in four years from now, that the average premium would be 60% – 100% higher than it is today. I stand behind that prediction because in order for insurance companies to meet wall street expectations, they’re going to have to cap coverage and increase rates.

As our coverage gets worse, we’re most definitely going to hear republicans blame health reform for the deterioration. This is a little bit like blaming a woman for her own rape, because she wore a short skirt. Passing a reform bill hasn’t created unabashed greed from our health insurance executives, it has simply created an urgency to accelerate their current practices.

If you’ve been reading this blog, you know that I’m not a fan of the reform bill that was passed. It simply doesn’t go nearly far enough. If they weren’t going to pass a public option in order to keep the insurance companies honest, they should have regulated the crap out of them immediately. They should have given federal regulators the sole power to make premium increases until the exchanges are set up.

Let me back up for a second to say that I’m not usually a proponent of this much regulation of private industry. For example, Chuck Schumer is proposing passing legislation to ban airlines from charging passengers for carry-on luggage. While I agree that charging passengers to carry on their luggage is obscene, I believe that the market can take care of this practice. As “discount” airlines nickle and dime their customers by adding nearly $100 in carry-on fees to every round trip flight, I believe that consumers will respond in kind by choosing other carriers or traveling by rail for shorter trips.

But health insurance is not a product that you can choose not to purchase. It’s a necessity of life. And we don’t have the option of going to another provider, because through years of mergers and acquisitions, and with no anti-trust laws to stop them insurance companies have created a monopoly. We have a total of seven insurance companies in the whole country. In this one instance, I say that we need to regulate the shit out of insurance companies. If they don’t like it, they can get out of the business of getting between us and our doctors. I for one, won’t miss them at all.

Yes this bill was gutless, in that it doesn’t go far enough. A public option is essential in order for us to control costs. I was never convinced that “medicare for all” would be sustainable in this country because of our steroid riddled food and our incredibly unhealthy lifestyles, but a public option to compete against private insurance companies is a no brainer. So I agree that this bill is wearing a skirt that is too short, and that we’re showing too much leg. But that doesn’t condone the rape that we’re going to continue to see from the health insurance industry. If you think that it does, your anger is horribly misplaced.

Health insurance reform is not your rapist. Your insurance company is.

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