Countries that have mandatory health insurance also have NO DEDUCTIBLES [View All]

[Lydia Leftcoast]

Affluent people may not understand what's wrong with deductibles. They may think that deductibles are "necessary" to keep the hypochondriacs from living in the doctors' offices (as if this includes vast numbers of people).

But here's my situation, which illustrates the problem with deductibles.

As many of you know, I dropped my health insurance this past spring.

Why?

Here's why. When I moved to Minneapolis in 2003, I enrolled in an affordable health insurance policy that had a $1000 deductible and a 20% copay for the next $5000 for a total of $2000 in out-of-pocket costs.

This was a worse deal than I'd had in Portland, $250 a month with no deductible and a $25 copay for all office visits and tests at the local branch of Kaiser-Permanente, but I could live with it.

However, the premiums continued to rise by at least 10% per year, with an additional quantum leap when I reached one of those milestone birthdays (one that ends in "0" or "5.")

I was forced to raise my deductible twice so that I could keep affording the premiums.

By the beginning of 2010, I had a $5000 deductible with a 20% copay on the next $10,000 (the next $25,000 for out-of-network treatment), for a total out-of-pocket cost of $10,000.

I did not go to the doctor, except for one urgent care visit when I sprained my ankle in 2009, because my monthly premiums, withdrawn automatically from my checking account (it was either that or pay a whole year's premiums in advance) cost more than an office visit.

When I looked at the proposed insurance and subsidy levels under the Obama administration's plan, I saw that they continued two evils of the current system: age-based premiums and deductibles. I argued about that frequently on this board.

Anyway, in January 2010, I slipped on a patch of black ice during the twilight hours and broke my elbow.

The total bill for my treatment came to a little over $1100. I was offered physical therapy and refused it, partly because of the cost, but partly because I felt that I hadn't suffered any loss of function.

After 6 years of faithfully paying premiums adding up to about $18,000, what did I get from the insurance company?

Letters explaining in bureaucratic detail why my injury wasn't covered. Which I already knew.

My finances were at their lowest point in 15 years early in 2010. I was barely able to pay for food, rent, and utilities, and that useless insurance company was still pulling money out of my bank account on the 5th of each month.

Then, in April, I received a letter telling me how much they "cared" about my health and how my premiums were going up another 20%, 10% for my new age bracket and 10%, well, "just because," I guess.

Business was starting to come back by that point, but I had debts from the bad months, not including the medical bills, and I saw no way of repaying them AND continuing to have the vultures deduct hundreds of dollars a month from my checking account.

I also realized that if I had put that $18,000 in the bank, I could have easily written checks for the treatment of my broken elbow, and I could have had those physicals and age-appropriate tests that I have not had. A little more math convinced me that if I ever actually had to pay that $10000 out of pocket, I would be bankrupt anyway, so why not save bankruptcy, if it became necessary, for something BIG?

So I took a deep breath and dropped my insurance.

It feels great. It feels liberating. Yes, I might develop a serious illness, but like a lot of self-employed people, I've been through bankruptcy before, and it's unpleasant and a real hassle, but it is survivable.

(Some of you are going to start telling me how wonderful HSAs are. I looked into them, and my insurance policy didn't qualify, because the deductible was too high. :wtf: If I had wanted to start over with a qualifying policy, which would have a much higher monthly premium, I would have had to apply all over again TO THE SAME INSURANCE COMPANY, even though they had all my health records for the past 16 years. Furthermore, all an HSA really does is prepay your deductible, and so it would have meant 1) Paying a higher premium than the one I was already struggling with, and 2) Paying an extra $200 per month. HSAs are great tax shelters for affluent people, for me, not so much.)

Getting back to the title of this post, I cannot support any health care bill that retains deductibles (otherwise known as "the insurance companies' license to print money").

I know of other countries that have modest copays (Japan, Germany) and others that provide medical care free at the point of service (Canada, the UK, despite their very different systems). I have not been able to find ANY country that charges deductibles.

Two other features of other countries' health care systems that are worth noting:

1. Premiums, if charged, are based on INCOME, not on age or pre-existing conditions.

2. If there are copays, they are capped. In Japan, you apply for a refund from the government if the copays exceed a certain amount, and certain chronic or catastrophic conditions are fully covered from the first yen. In Germany, you simply don't have to pay the copay if you have already paid a certain amount that year.

I think that some of the provisions in the current legislation are great, but tacking on a requirement for private insurance with no public option, very few restrictions on the companies, and a millionaire Senator's notion of what is "affordable" turns the legislation into an abominable bit of corporate welfare that is going to cause real hardship for people on the margins, the ones who are too well-off to qualify for subsidies and too poor to really afford the insurance. (I would be one of those. The deals available to me would be WORSE than the one I dropped.)

Fortunately, by the time the insurance mandate takes effect, I will be close enough to qualifying for Medicare that I will just pay the fine and cross my fingers.

We all ought to do the math and not just accept the idea that we MUST have private health insurance, especially when we are in a position that makes it extremely difficult to pay for. A person may have ongoing medical expenses, but are they really more expensive than the out-of-pocket costs of insurance? That is something that each of us has to decide for ourselves.

Insurance companies are only part of the problem with the American health care non-system. Drug companies gouge us because we're the only Western country that doesn't either regulate or negotiate prescription drug prices. Our fee-for-service model encourages the less scrupulous practitioners to prescribe unnecessary tests and surgery and to rush as many patients through their offices in a day as possible. The expense of medical education and the grueling life of a resident make doctors feel entitled to lavish compensation. Hospitals have overpaid administrators and wards understaffed with nurses, who are also required to complete picky paperwork after each interaction with a patient.

If a foreign power tried to impose this system on us, we'd consider it an act of war. If non-participation in insurance causes this horrid system to collapse, I say "It's about time!" I hope that all of you who have single-payer advocacy groups in your state are supporting those groups and lobbying your legislators.

With the Obama administration and Congress co-opted by corporate interests, state-by-state action is our only hope for a humane, universal, lower-cost medical system in this country: one with required participation but with premiums geared to income rather than age or state of health, truly affordable caps on out-of-pocket expenses, and NO DEDUCTIBLES.