Here is an interesting anecdote of how the private health insurance market is killing itself:
Our health insurance costs (premiums + deductibles) for the plan we offer to employees have risen over 20% each year for the past five years. Some years our costs have risen as much as 45% when we were forced into the high-deductible product line.
There has been no accompanying increase in reimbursement rates for occupational therapy or physical therapy, by the way.
Aside from that, I was interested when I was informed three months ago that our current plan was being discontinued because the letter that we were sent said very specifically:
" In the short term, the impact of these changes will not be seen in premiums. Encouraging preventive care and providing new products and programs to empower members to take a greater role in their health care and will help address rising costs. Rest assured that XXX Health Insurance Company knows that the current pace at which health care costs are rising is unsustainable. We are working on a number of initiatives and programs to deliver better care to the community, as well as the country."
Well anyone reading that might expect that costs would not change! Of course they held off on telling us the new plan and the new rates, citing federal mandates for mental health parity - which actually don't apply to our company and a great many other employers because of the '50 employee rule' but that fact seems to be lost on the insurance companies. Undoubtedly, they model their price structure on total costs they incur and don't try to separately pool small from large employers. In this way the fact that there is an exemption for very small businesses really doesn't matter because the costs get applied in the global model anyway!
For the record (and as a provider) I believe that mental health parity should be a given - and I understand how that could increase costs. The problem is that insurance companies are using this as a smoke shield for ratcheting up premiums across the board, again - and that the whole model that burdens small businesses with these costs does not work. There has to be a better way!
OK well I received the new plan and rates today and they amount to ANOTHER 20% increase in premiums and deductibles with accompanying increases in co-pays and prescription costs - so of course I call the XXX Health Insurance Company and am given the run around that the increases are due to the mental health parity law (which we were supposed to be exempt from). After I point out the illogical statements being made I then referenced the letter that I was sent on June 30th and asked him to read from it. This is what he read:
"Rest assured that XXX Health Insurance Company knows that the current pace at which health care costs are rising is unsustainable. We are working on a number of initiatives and programs to deliver better care to the community, as well as the country."
In other words, the insurance company is now claiming that 'their' version of the letter doesn't make a statement about costs not increasing. They asked me to fax them a copy of the letter that I got - which I did - but I won't be holding my breath for that to change anything. I can't believe that they are trying to lie about what their own letter said.
I am a free market capitalist and I think that people have the right to make as much money as they can - but there is something wrong with our health insurance system that has so much profiteering in it, with such restriction of benefits to people, and with such restrictive reimbursements to most providers. The money and benefits need to flow to the patients and their health care providers (with some reasonable opportunities for profit but NOT price gouging). Again, this could all be solved with open market competition.
End game: we are competitive shopping for health insurance - again - and costs would most certainly be easier to manage if there was cross-state competition as there is in other insurance markets. I am terrified about handling health insurance over to the government because I have very little faith that the government will run a fair and competitive product (again, costs will simply be shifted via other taxes to the whole population and the risks of rationing as in other socialized systems are just not acceptable).
The current system is broken, and the public option is a very broken alternative that is subject to the same power-broking and manipulation as our current system. There is a need for leadership on this issue that includes open private competition and tort reform as the first step at repairing the system. I do not have confidence that we will see it.