Where Has All the Health Insurance Gone?
I want to start going to a fitness center, and since I broached the subject in front of some family members, they helpfully offered the advice that I should double-check what my health insurance offers. It makes some sense, since their point was to prevent me from paying membership fees if they were already included in my policy. Unfortunately, this has become a normal conversation in America, because we have – as a nation – completely lost the true meaning of the phrase “health insurance.” I can’t blame anyone for that, because the language we use to talk about insurance has changed radically over the years.
In spite of being eligible for AARP (by merit of marriage), I’m not yet 50. But, I’m old enough to remember the evolution of how Americans have paid for medical services since the 1970’s, and the terms we’ve used for that.
Medical Insurance – This one is simple, mostly straightforward, and is what we called policies that would usually just cover hospital visits, and emergent care. Some policies would take a small bite out of the costs of routine doctor visits from the start, but most wouldn’t start paying for those regular visits until we had paid a generally high deductible out-of-pocket. My parents would usually eat right through that, since I was a sickly child. “Finally! The insurance kicked in!” was a common statement from my mother by around May or June of each year, when the receptionist in my doctor’s office would tell her those happy words, “No charge for today!” The bottom line for these policies was that people paid premiums to cover primarily extremely expensive services that they couldn’t afford otherwise, and routine care was paid primarily out-of-pocket. Those expensive services were mostly for grave illnesses or injuries.
Health Management/Maintenance Organization (HMO) – Arriving in the early 1980’s at least in our region, the HMO was a godsend in my mother’s eyes – at first. Sure, the paychecks went down more than with the old insurance, since the premiums were so much higher. But, all doctor visits were blessedly low cost! No more writing checks over $50 for just a routine check-up. Before my mother could absolutely declare it paradise, she ended up seeing a pediatrician to remove an in-grown toenail. You didn’t misread that. This was when my mother learned what the “management” part of that acronym really meant – patients will see whoever is cheapest for the organization, so that means the correct specialists might not fit that description. My mother ended up with blood poisoning, a hospital stay to receive IV antibiotics, and a lot of follow-up visits to other (not necessarily correct specialty) doctors to make sure there was no lasting damage to her foot or leg. Needless to say, this was the beginning of the end of people relying entirely on the advice of physicians. It’s great that people have become advocates for their own health, and learn about their medical problems. But, it would have been much better if it hadn’t started out of necessity, because many people were just like my mother – being given the cheapest care their HMO’s could throw at them. The bottom line for HMO’s is to have customers pre-pay for care through high premiums, out-of-pocket expenses are relatively low, but these organizations are focused on saving as much money as possible. They have fallen out of favor because they got a reputation for pushing questionable care – like my mother received – at the expense of patients’ health.
Preferred Provider Organization (PPO) – This is something that started sometime in the 1990’s in Western Pennsylvania at least, and is essentially still an HMO in how it operates. The primary difference is that instead of telling patients who to see, there is a list of providers to choose from within the region. The companies offering these policies negotiate contracts with hospitals, pharmacies, provider groups, and occasionally with health clubs – which is what I theoretically should be checking. Calling PPO’s “Preferred Provider Organizations” is a misnomer, and if there was truth in advertising, they would be called “Pre Paid Office-visits”. The bottom line for PPO’s is again forcing customers to pre-pay for care, which means that the majority of people do not get anything close to their investments back in these programs. Instead of the problems of questionable care seen in HMO’s there are issues with “in-network” versus “out-of-network” providers. Some regions like my own are ruled by medical monopolies, which means that depending on which insurance company is underwriting a PPO policy, customers could be restricted from using certain hospital and health networks entirely. This has become an issue since insurance companies are increasingly becoming directly involved in providing medical care, and hospital systems are starting their own insurance companies.
Right now, there’s yet another “health care” bill being considered, but because it’s not going to change the status quo of the insurance market that is essentially limited to high-premium pre-paid care policies, it’s no better than its predecessors. I understand, it’s been around 40 years since we had “real” health insurance in America, and that many people don’t remember it clearly at all. But, people really do need to think about this, and reconsider how we’re doing things. We don’t have real choices anymore when it comes to health insurance – the differences are just in costs, not in what they really offer. The primary reasons why traditional health insurance of the 1970’s and before fell out of favor was because of restrictions on Health Savings Accounts (HSA’s), and now that we’re finally easing those, perhaps it’s time to demand that government get out of the insurance business. Let the people demand what they really want from insurance companies. I sincerely doubt that I’m the only person in America who would love to return to a system where I have a policy to cover major medical problems, deductibles on routine care, and real pricing on health care – instead of the imaginary pricing created by government and insurance companies.
For now, it’s time to for me to find out if I can get a health club membership discount thanks to my current insurance – not because I “like” the idea, but because I’ve already paid for it!