I was a long-time employee of a large manufacturing company that has offered insurance to its employees. When I started working there in the late 1970's, that company was self-insured. Today, they offer a plan from Blue Cross and Blue Shield. Why did they change?
Back 30 years ago, I just turned in the payment form from the doctor when I paid the bill after receiving services. After meeting my $100 deductible, they would send me checks as reimbursement for 80% of the cost. The whole program was administered by the human resources department, which was called the personnel department back then. They had a list of "reasonable and customary" charges for the various medical services. If the doctor bill was too high, they wouldn't reimburse me for the full amount, but I never had that scenario happen.
Consumers don't generally pick their doctors based on price. Getting bargain basement health care and putting your family's health at risk is probably not the smartest thing to do. Over time, people had better health insurance that required them to pay a smaller and smaller share of the health care costs. In my opinion, doctors didn't see this situation as billing their patients anymore. They were billing the insurance company. Sometimes, they were even billing the government where Medicare or Medicaid was involved. Consequently, they raised prices and felt no guilt.
Then, our universities began graduating more and more lawyers. These lawyers wanted to earn big salaries, and they could do this through lawsuits seeking damages for torts. Doctors and hospitals could be sued for liability in wrongful death or malpractice cases. This caused expenses for doctors to rise dramatically for malpractice insurance premiums. It also caused the doctors to do many extra tests to rule out every remote possibility. Why not do the tests? You and your insurance company pay for them, and the doctor is protected from liability suits to reduce his or her costs.
Employers were providing insurance as a benefit to their employees in order to be competitive. The cost of providing this insurance was rising rapidly. The insurance companies offered corporations a way to reduce their benefit cost. They would create networks of preferred providers -- PPO's. The providers were only selected to join the network if they agreed to accept the network price for services. When networks were able to get enough people insured, the providers were pressured to accept the lower price or lose a number of patients that had this insurance at their jobs. I guess you could say that the HMO's were shopping and negotiating with your doctor on your behalf. I have had at least four different insurance plans in the past 10 years, and we have never changed a single doctor. They all seem to belong to all company PPO's.
Of course, insurance companies generally can reduce the cost of administering the claims. They can better provide protection against fraudulent claims, too. All of these costs being reduced significantly allows the insurance company to offer the health coverage at a lower price while making a profit.
Are you worried that they make too much profit? Well, the liberals in our federal government will tell you to trust the government to pass laws and regulations that tell these insurance companies how much profit they can make. They believe that the government is in a great position to tell these insurance companies how to run their businesses in order to keep your costs down. President Obama will tell you that the reason our health care costs are so high is because the insurance companies are making a profit. I'll bet that you've heard that the insurance company CEO's make too much money, too. Obama will also tell you that we need the government insuring you, and that will save the cost of that profit and the CEO's salary.
Is that stuff true? I guess it could be. Do you believe that the government will do an effective job administering claims and preventing fraud? Do you believe the government will figure out how to build a PPO and negotiate prices of health care with your providers? Will they get you prices as good as you have now or better, while paying the providers enough to stay in business? Will enough kids be persuaded to go into medicine as a career? Will the doctors keep practicing medicine, or will they be forced to close down their practice because the insurance payments aren't enough to cover the expenses?
If the MessAPolitico would stay out of our business, the free market would take care of itself. Competition would keep the profits reasonable. With insurance companies having to compete, they will always be trying to reduce their costs of administering claims. They will take steps to effectively eliminate fraud. Their prices will be driven down by the competition, because they will need plenty of enrollees in order to gain power over the PPO network. If one company tried to make 25% operating profit while the others only make 10%, their prices would be too high. The enrollees would leave. The corporations would take their employees to a different insurance company to save money.
When the government has taken over the whole health care industry, will there be any competition driving them to get better? NO! How will they reduce costs? They will tell you that you can't have that elective surgery because you're too old or you probably will die anyway. They will tell your doctor that he needs to comply will all of their paperwork and regulations, but he or she will get paid a smaller amount. What will you do for health care when your doctor decides to quit practicing medicine? My daughter's Gynecologist sent out a letter recently saying that he would no longer deliver babies. Is this a sign of things to come?
Congress, please respect the wishes of the people. President Obama, it's time to listen to the citizens of the United States. Repeal this MessAPolitico. Repeal the Patient Lack of Protection and Unaffordable Careless Act. Congress, please don't fund this MessAPolitico. Americans, pay attention to how they vote in Congress and in your state legislature. Remember on election day in 2014.
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