Mike the Mad Biologist

Healthcare: It’s the Insurers, Stupid

Posted by Mike on January 23, 2007
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Let’s just say, for sake of argument, that Bush’s proposed tax plan for healthcare would actually lower premiums. There’s something rather obvious that his plan seems to miss.

If insurers make less money through premiums, they will find other ways to recoup their diminished income.

How would they do this? Here are three ways, all of which are happening now, so they can’t be viewed as far-fetched:

1) People with pre-existing conditions won’t be accepted by private plans.

2) More and more procedures will be defined as ‘non-essential’, so they will not be covered (note: this also includes things like discharging patients earlier, making it even harder to receive psychiatric care, and so on).

3) Co-payments will increase.

This plan will do nothing to contain and lower healthcare costs. It doesn’t improve healthcare quality either. It will, however, shift costs, in many cases to those who can’t afford higher costs.

An aside: There is so much wrong with this plan, but here’s one thing that bothers me: the plan attempts to legislate through the tax code. As it stands right now, the Treasury basically writes you a check covering part of your insurance costs–it’s what tax specialists call a “tax expenditure.” Under Bush’s plan, this subsidy would be decreased for some, and increased for others. However, the needy–those in the lowest tax bracket–are the least effected by tax breaks (simply because their income is taxed at a lower rate). Wouldn’t make sense to help those in the lower tax brackets more? If, of course, that’s your real objective….

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Comments

  1. #1 Roy
    January 23, 2007

    The best way for insurers to reduce their costs, and maximize profits, is to keep delaying payments, making the victims — I mean ‘clients’ — jump through endless hoops, until one of two things happens: 1) the victim comes to his senses and quits trying, or 2) the victim dies. At this point, the only costs are clerical and stall tactics: the rest is pure profit.

    Unlike many other businesses, insurance companies are not bound by contracts, or business law, while their victims are.

    Think big here. When Katrina happened, the insurance companies found judges who absolved them of all financial responsibilities. Why did the insurers not insure themselves against catastrophic loss? Because they knew no insurer would ever pay up. It would be stupid business to give away billions.

  2. #2 DMC
    January 24, 2007

    So what? Do you thing the democrats are going to do anything about it?

    No way. Both parties are in bed with the same corpos.

    And when are the dems going to end the war?

  3. #3 Edward
    January 24, 2007

    The whole problem with healthcare in the USA is that it’s run by the insurance companies. Insurance is the wrong model for what is, most of the time, a basic service. Do we pay our phone bills, heating bills, electric bills, or pave our roads via insurance? Putting routine health care into the hands of the insurance companies in the first place was a huge mistake, but now that they have their hand on that revenue stream, they are using the money we all pay them to pay politicians to let them keep it.

    Not all politicians are equal, however. The Democrats were making moves to solve some of the issues when they lost control of congress in Clinton’s first term. The Republican contolled congress between then and now did nothing to solve the problem on a national level, and has done things to make it more difficult for states to enact solutions on their own. Individual Repulicans and Democrats may differ, but as a whole the Democratic party is signifcantly better on health care issues than the Republican party.

  4. #4 Jennifer
    January 25, 2007

    Another aspect to health insurance is mental health coverage. A friend of mine was diagnosed with manic-depressive disorder a few years ago, saw a doctor, and now takes medications that has completely solved her problem. But now, she can’t get any health insurance (she’s self-employed). The funny thing is she’s one of the healthiest people I know, but her pre-existing condition bars her from health insurance. Crazy. Same is true for any mental health condition or pre-existing medical condition (diabetes, for example). So you’re right, only perfectly healthy people can get coverage. If you get sick, start filing claims, your premiums will get jacked sky high and it will be impossible to get coverage if you lose your job or want to be self employed. Our health care system sucks.