State Mandates for Health Insurance: I'm Paying For WHAT?!

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shellyroche's picture
shellyroche
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State Mandates for Health Insurance: I'm Paying For WHAT?!

Find out your state's mandates here

shellyroche's picture
shellyroche
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Re: State Mandates for Health Insurance: I'm Paying For ...

ao's picture
ao
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Re: State Mandates for Health Insurance: I'm Paying For ...

Considering this information, why hasn't some entrepreneurial insurance company come along that offers low premium coverage to low risk customers not interested in these services.  If I knew anything about the insurance business, I'd open one myself. 

I recall having NJ Manufacturers Insurance in the past that had excellent coverage, low cost, great service (you could actually quickly get a human on the phone), AND ... they returned dividends to their customers based on their profitability for the year.  Their insurance was only available to individuals in certain employments pools, however, IIRC. 

http://www.njm.com/

How about screening prospective customers for physical and mental health risks including such things as using an MMPI test to screen out neurotic health service overutilizers.  Let the in vitro fertilized, overweight, cosmetically surgerized, hair transplanted, smokers, drinkers, druggies, coach potatoes, and neurotics have their own insurance and pay the higher premiums they deserve to pay.  

Anyone out there know the insurance business who could comment on this? 

Davos's picture
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Re: State Mandates for Health Insurance: I'm Paying For ...

Hello Shelly:

GOOD question!

Take care

PS Great research, nice to see how things really work in LobbyLand Congress.

Farmer Brown's picture
Farmer Brown
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Re: State Mandates for Health Insurance: I'm Paying For ...

 ao,

I think what you're suggesting is precisely prohibited against by State mandates.  In other words, each State mandates the minimum coverage insurance companies must provide if they wish to provide insurance in that State.

Same old story of government intervention that is meant to solve something almost always  creates a bigger (and more expensive) problem.

beez123's picture
beez123
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Re: State Mandates for Health Insurance: I'm Paying For ...

 I think people that complain about having to pay for "all those other people's problems" are kind of missing the point of insurance. If I understand insurance, it's when an individual pays into a fund, with lots of other people, and when a small percentage of them perhaps gets sick, the sick people are then able to use funds from the pool to pay for medical care.

Disclaimer - if people are just concerned with paying for other people's hair pieces and liposuctions, then by all means, complain away. I don't think these things should be covered under large umbrella general insurance plans. If people want to pay into specialty cosmetic funds, then that's their prerogative. But I've heard from hundreds of people that don't want to pay for anybody else's treatment, no matter what it is. But they still want their personal issue to be covered by insurance. I really don't think they understand the basic concept of insurance.

What makes it work is the large collective bargaining power of the huge group of people paying into the fund. No one knows if they are going to get sick next year. Did my dad know he was going to get leukemia? Did my mom know she was going to get cancer? No, they did not.

They were pretty darn healthy individuals for most of their lives. But they paid into an insurance fund for years and years. Now, did I ever hear mom or dad complain abut paying for all those "other people" that were using the insurance fund money to pay for "their procedures" or "their medicine?"  No. Because mom and dad knew, at some point, they might need to tap into the fund themselves. It's called empathy.

If you don't want to pay for all those "other people's" medicines or procedures, then guess what? You have some choices.

1. You can find another insurance plan that you like. Maybe there is one that only covers cancer. Or one that only covers heart disease. If you are only concerned with those issues, then maybe you should seek out a fund tailored to your issues. Good luck. Most people are satisfied paying into a general coverage fund because... maybe they don't have a crystal ball.

2. You can opt out of paying insurance, for now. If insurance is mandated by Federal Law, then yes, I guess you will just have to suck it up and pay the least amount possible. But if you can opt out paying insurance - then be prepared to deal with the consequences. You might get sick, because it's true, the human body is fallible. Even if you seem perfectly healthy now, you never know what the future will bring. And then you are stuck with possibly going into bankruptcy, losing every bit of money you have - all to pay for that medical treatment that would have been covered under insurance (hopefully). But you didn't feel like paying into the system to help out all those "other people." Well, guess what? Now the rest of us have to help YOU out. Because one way or the other, the treatment you required will have to be paid for in some form. 

But here's the kicker, if you opted out of insurance because you didn't want to pay for all those other people and their weird illnesses and strange medicines that you know you would never need... And now let's say you get sick, really sick. Are you going to expect to be treated for your illness? (Oops, you didn't save up the 50k needed for that procedure?) Are you going to lay down and die? What about others that thought exactly like you? They don't want to pay for you. They would just be following your logic after all. Why should they worry about your disease or treatment?

I think this country suffers from a severe lack of empathy. Is there a cure for that?

Let's now skip past non-empathetic people who, at least it sounds like to me, really don't want anything to do with insurance or the concept of collective bargaining power, period. Let's now address the real issue with health insurance. (If you want a more lengthy explanation watch the Bill Moyers interview with Wendell Potter. Davos posted this excellent piece a few days ago. http://www.pbs.org/moyers/journal/07102009/watch2.html)

Even if you have been paying into a decent insurance fund for years and years that insurance company will fight you tooth and nail to NOT pay for your medical treatment should you need it. Their business model depends on denying care to as many people as possible. Each time they grant someone coverage for treatment - they LOSE MONEY and profits shrink. That is the long and short of it my friends. It is a business. There are very cold and calculating people running it. They don't give a hoot about your grandmother, your sister, your father, or anyone else. Deny, deny, deny is the battlecry of insurance companies. If you don't know the score by now, if you don't know anyone who has had a battle with insurance companies for payments owed them, then you don't know many people.

What Obama... you know what - forget Obama. His is a name and personage that incites too many people to argumentative behavior. Let's just acknowledge that there is a large group of citizens in this country, around 75% by some counts, that want health insurance reform. A lot of those, a majority, would like a single payer system. But, let's even leave single-payer aside for now. All these people in favor of reform want - is some form of competition to go up against the private insurance companies and corporations. The private companies are motivated by profit. What a government-run plan could do is deliver an insurance plan that does not depend on profit to survive and thrive. The government-run plan would also be a HUGE pool of people using their collective bargaining power to lower costs of treatments, drugs, etc. The private insurance companies are scared to death of this because their businesses will most likely lose billions in profit due to having to compete with a more cost-effective government run plan. This is why they are resorting to the same old scare tactics to misinform people, buying out congressmen, sponsoring pseudo-grassroots movements and protests, etc.

The "bill" in it's current form might be a total mess, but the idea of government-run health insurance is good (single-payer would be even better). If the bill is messed up, maybe there's a reason for it. Could it have something to do with all the health insurance lobbyists buying congressional influence? Could congress be writing such a mess of a bill and causing such confusion and anger so that the bill doesn't pass, and we are stuck with a bunch of greedy profit-driven private health insurers for a few more decades? Think that might sound good to them?

What we need is a clean bill. One without lobbyist influence. A bill that is clear and concise and simple within reason. A bill that is transparent.  I'm scared Congress is too corrupt to allow that. Call up your Congress-person and complain today. And while you're at it, ask them what health insurance plan they are on? Oh yeah, that's right, a government-run health insurance plan. Huh, how about that? If government-run plans are so scary, why don't they switch to a private health insurance plan?

 

Ready's picture
Ready
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Re: State Mandates for Health Insurance: I'm Paying For ...

As an employer who has several folks covered under my policy, it would seem to this observer that these types of things are built in, at least in my plan.

I have a 21 YO male, non-smoker, basically the insurance company's dream who pays $160 /mo. On the other end, I have folks with medical issues, older, smokers, etc who pay appreciably more.

It's still a pool plan, and sure the 21 YO could get cancer, and he would be covered. His premiums would then go up at the next enrollment.

What am I missing here? Seems to me costs are placed where they are likely to be funded out...

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Re: State Mandates for Health Insurance: I'm Paying For ...

In some respects, beez, you're right on target. But let me correct a couple of important points.

beez123 wrote:

Disclaimer - if people are just concerned with paying for other people's hair pieces and liposuctions, then by all means, complain away. I don't think these things should be covered under large umbrella general insurance plans.

Right. Definitely.  But the point of the original post was the "hairpieces and liposuctions" that are mandated- that is, they're required by law.

beez123 wrote:

What makes it work is the large collective bargaining power of the huge group of people paying into the fund. No one knows if they are going to get sick next year.

Now here's a huge part of problem. You've made an enormous jump here. In fact, you've jumped right over one of the two or three most crippling problems in the health system right now.
The problem is, some people DO know when they're going to get sick. In fact, many people suggest that the majority, a large majority even, of patients in hospitals today are there for the direct and the indirect effects of just two things: smoking and obesity.
And neither smoking nor obesity happens to you by surprise. They're not accidents. And the resulting cancer, diabetes, COPD, blindness, etc, etc, etc, aren't accidents either. They're not a surprise. You know they're coming.

Can you write an insurance policy to cover costs that AREN'T a surprise? Nope. Because then the people who buy the coverage are only the people who need it, and anybody who doesn't need it doesn't buy it. If every policyholder makes a claim every year, then the policy has to cost each of them the entire cost of the procedure. The principle is called "adverse selection."

So I submit that one of the deepest flaws of the current "healthcare" system is that we're all trying to insure something that's uninsurable. You can't insure against dangers that you KNOW are going to happen. Insurance is a process where RISKS are shared among participants. If you know from the outset who is going to suffer the loss, that's not sharing risk. That's taking money from some people to pay others and nobody participates in that without coercion...

 

beez123 wrote:

If you don't want to pay for all those "other people's" medicines or procedures, then guess what? You have some choices.

1. You can find another insurance plan that you like.

...Which brings us handily to the next point.

No, you can't.

You can't find an insurance plan that you like, and that's precisely the point of the original post. The law constrains the insurance company- it's illegal for them to write an insurance policy that doesn't include "hair pieces and liposuctions." Or, an even better example, I think, is childbirth coverage for men. I'm a man. I know I'm absolutely not ever, not if I live to be a million years old, ever going to give birth to a baby. Not ever. But I carry insurance coverage against the "risk" that I might incur the great big expenses of giving birth in a hospital. I can't buy an insurance policy that doesn't cover it, because the State of Michigan won't let an insurance company write me that policy.

You can't get an insurance policy that you like. That's the meaning of a mandate.

beez123 wrote:

2. You can opt out of paying insurance, for now.

True, and thank goodness for it. Unfortunately, the price of medicine is way out of line, because of the constant threat of litigation, and the delay, fraud, and waste that is mostly inevitible when patients don't give a darn what it costs. Why would a doctor make any effort to keep costs low?

beez123 wrote:

Their business model depends on denying care to as many people as possible. Each time they grant someone coverage for treatment - they LOSE MONEY and profits shrink.

This is oversimplified enough to be false.

I'm an adjuster for a homeowners insurance company. Nobody's ever suggested to me to do anything but pay for exactly what the policy says is covered and deny exactly what the policy says is excluded. There's two reasons for that:
First, customer service. Word gets around town whose adjusters are the nicest, fastest, and fairest, and agencies sell policies with that company and not others. Customer service is good for business.
Second, litigation. Denying a $10,000 claim and getting a $150,000 lawsuit is bad for business.
So we, at least, treat claims fairly and try to earn a good reputation doing it.
Now, I'm not suggesting anything about any other company, especially health insurance companies. I know there are snakes out there, maybe even EVERY SINGLE health insurance company. But it should be pointed out that there's a whole lot more to the story than denial=good.

beez123 wrote:

The "bill" in it's current form might be a total mess, but the idea of government-run health insurance is good (single-payer would be even better).

Doctors are doctors to make a living. They're not there for fun or philanthropy, they're there to work. And they work for the person paying them. Right now, they work for insurance companies. And things are broken. They do what insurers pay them to do. Too many tests, nothing simple or easy, the most expensive ways possible, because that's what makes them the best living. They don't have any reason at all to be nice to patients, or to save money, or (ha!) advertise why they're better and/or cheaper than any other doctor in town. They do what gets them paid.
If they're employed by the federal government, they'll do what THAT boss says to do. The rules to the game will change, and doctors will adapt. They'll do whatever gets them paid the most by the federal government. Is that going to be what's good for the patient? Is that going to be cheap, straightforward, effective, service with a smile? Exactly the treatment you need and nothing else? Don't get your hopes up.
Government-run care, might, maybe, possible, conceivably, not be worse then private insurance, IF somebody in DC gets some sense and the healthcare bill gets fixed. But better? Nuh-uh.

Mike

shellyroche's picture
shellyroche
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Re: State Mandates for Health Insurance: I'm Paying For ...

to beez:

My point is that insurance premiums are artificially inflated by these mandates, which are essentially special interest favors.   If we removed these mandates and had the freedom to buy insurance across state lines, we'd have far more effective "reform" and many more people able to afford insurance (without spending trillions of dollars).

And personally, I have zero faith that we're going to get a healthcare bill out of congress that is NOT fraught with special interest favors and the usual junk.  Nor do I believe for a second that there will be any sort of "competition" between a gov't run plan and private insurance companies - how can two entities compete when one entity is making all the rules about the competition?  

Just my devalued 2 cents ;)

Farmer Brown's picture
Farmer Brown
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Re: State Mandates for Health Insurance: I'm Paying For ...

Mike,

You made all the points (and then some) I was thinking of writing about but got too lazy to do.  The most important IMO is the common error many make in assuming or demanding that insurance pay for everything.  As you eloquently point out, insurance is there to protect against RISK of the UNKNOWN.  Obviously, something that is KNOWN or which is an elective procedure (hair implants for crying out loud!!) is not RISK coverage.  It is, as you say, merely a way of spreading the cost around, i.e., socialism.

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