Health insurance revisited

I read an article on CNN online and they had an estimate for the money wasted on processing claims.  Keep in mind that at least when you get an unnecessary test you at least get a test.  Claims processing produces nothing!

Health Care, What’s Broke? (Besides me I mean)

We are in the midst of what some call a health care crisis in this county.  The insurance companies say the medical costs are rising too fast.  The employers say the insurance costs are rising too fast.  We just see the cost of our health care rising, in many cases, out of reach.  We seem to pay more and more for less and less.

Is there anything in the system that we can fix?  Hmmm, well let’s take a stroll through the system and see if we can see what’s broke.

We take our child to the doctor, the doctor looks at him and prescribes some treatment.  If we are lucky, it works and our child gets better.  Seems like that part of the system works ok, even though sometimes with a serious illness a doctor is only about one step removed from shaking a rattle.  Still there is an honest effort to make the patient better.  A service is provided

Now in most every doctors office there is a person behind a desk whose whole function is to figure out how to get paid by the patient’s health insurance company.  They submit the bill and sometimes the insurance company pays it.  Or sometimes the insurance company pays some of it, or rejects it.  Then it’s this person’s job to bill you for the balance of the bill, SURPRISE!

In your mailbox you get a bill from the doctor that tells you how much the insurance company paid and how much you need to pay, only wait, this was a covered expense and you already paid the copay so what’s up with this.  So you pick up the phone and call the insurance company, maybe for an hour or more, at work!  Finally you think you have resolution, only to find out someone has dropped the ball and you get another bill, this one overdue.  So on the phone again, at work!

This has gotten so bad that there are companies whose whole function is to deal with your insurance company for you.  Yup, you or maybe if you’re lucky, your company (who is probably tired of all that time on the phone) pays someone to make the insurance company do what you pay them to do.  Kind of like hiring someone to watch the kid you hired to mow your lawn, hey kid you missed a spot.

So let’s see, we have a doctor who provides a service and you who, in a roundabout way, pay for it.  You pay for it with your premium, and with the portion you employer pays, which is really just another form of your wages.  So don’t let anyone say you don’t pay your own health care.  The only advantage you get by having it through your employer is he gets a better deal per person than you can ever get by insuring the whole company.

History Lesson, insurance was invented to spread risk.  If 100 ships go out to sea and in a year 10 are lost, all 100 owners will put a small amount into a fund and whoever happens to own the 10 lost ships splits the fund.  Next year you do it all over again.  If a trusted company holds these funds and invests them or loans them they can make a profit with the money, until they have to pay the owners of the lost ships.  It used to be that way for health insurance until some smart guy realized that if we only insure healthy people, or only insure cheap stuff, we get to keep all the money not just the return on the investment.

Today we have an insurance company who wants to maximize profits.  They collect all your premiums in the form of money deducted from your wages and the wages you never see in the form of EMPLOYER CONTRIBUTION.  Then their goal is to keep as much of this money as possible.

Wait, wait, the doctor performed the service, you got the service, why should the insurance company get to keep all that money, what did they do?  On top of that they are difficult enough to deal with that the doctor has to hire a specialist.  They are difficult enough to deal with that you have to hire a specialist, and for what?  In the end, doctors get paid by all of us.  Sometimes I pay for your child’s ear infection, sometimes you pay for my wife’s heart attack, but WE pay for EVERYTHING!  Insurance companies just skim off all they can and then pass through what they have to.  Insurance companies could evaporate tomorrow and if it was done right, we wouldn’t even know they were gone.

So why does it seem like we so intent on keeping this bloated parasite of an industry intact?  Well, of course there is the obvious answer that they have bought considerable interest in our government but that isn’t the only answer.  Take a look at your retirement fund, I bet it’s pretty heavily invested in health care industry.  HMO’s and insurance companies own a good portion of your retirement, and of grandma’s as well.  If we dismantle the insurance industry we hurt a lot of people in fixed income.

They are kind of like the parasitic worm that causes river blindness, if we leave it alone it destroys our eyes, but if you kill it, it can drive you mad.  So we leave it in place, root hairs wrapped tightly around some of the most economically vulnerable, and in the mean time the industry subverts our government with millions of dollars and pays the high level insiders even more millions in annual salary.

You know what?  I think I’d rather be mad than blind.

Savings, America’s Capital Depreciation Fund

Peter Peterson, the founder of the Blackstone group is lamenting the lack of personal savings in the US. He says this is a bigger problem than the current recession. He may be right when he says that since there is no domestic savings, foreign countries holding our debt can hold our economy hostage.
Unfortunately he blames our attitude of “want it now” for out lack of savings. Here he is dead wrong. If you go and open a savings account these days you will find out two things.

1) You will likely pay a fee for having a savings account.

2) The interest rate you receive on your savings will likely be well below inflation.

Bottom line, when you save, YOU LOSE MONEY.

I don’t know about you but I can’t see why the interest rate on savings shouldn’t be some percentage of the loan rate, AND it should always be better than inflation. The banks are jerking us around, charging fees everywhere they can, keeping savings interest rates low, and now using our tax dollars to pay exec salaries and bonuses. Mr. Peterson has a lotta sand to sit in his fancy suit and talk to us about how bad we are for not saving.

Maybe in our little way by not saving we are telling the MARKET that we want change. But why should they change, if we don’t give them enough at the teller window, they’ll get it from our tax bill.

http://money.cnn.com/video/ft/#/video/fortune/2008/12/02/fortune.500.peterson.saving.fortune

Consumer Confidence

So today the government decided to try to improve consumer spending by investing in the consumer debt market. Treasure Secretary Paulson thinks that by freeing up personal credit we consumers can go on with Christmas as usual. Come on guys, only a moron would go out on a buying spree in this climate. We are cutting Christmas to the bone. The companies we are bailing out are continuiong to increase fees and premiums while holding posh seminars on our dollars.

Now if you really wanted to boost consumer confidence, instead of investing in companies that have already sucked all we can afford out of the economy, why don’t we put a couple of billion into…education.

Yup, if you want to boost MY consumer confidence you could help me be confident of the college education of my kids. With one in college, one starting next year, and the last the year after, if a couple of billion were spent so every child with say a B average gets a free college education, it would go a long way to improve my confidence. I am a firm believer that education improves society so what’s to lose. Sure we need to make sure it’s not just a party, but the VA and most existing scholarships already do this. Instead of keeping some fat cat in his fine house, lets send our kids to school.

If you did this Mr. Paulson, I’d make my Christmas gift list much longer, I’d even send you something nice.

The Choice That’s No Choice

In a political Spam-mail, John McCain is telling me about his health plan. He’s telling me about choices, telling me how I can make all these choices under his plan. It seems to me that the freedom to choose without choices is no freedom at all.

When in the last 20 years have we had any choices in health care that have not been legislated? Oh, we’ve always had to chose between which provider will hurt us the least, which provider will increase the premiums least, or which provider will pay the plan doctors in a timely fashion (so your personal physician won’t drop the plan or make you pre-pay). These choices are little more than a game of choose the rapist.

This plan smells suspiciously like it will be manipulated to benefit the insurance companies before it’s done. These are the companies that we trust to sell us at a fair price, health care for our families. The company I work at is mostly self insured, a couple of years ago my premiums went up 13%. Of that, 4% was due to increased health costs, the other 9% was an increase in the cost of our insurance carrier’s administrative services, the ABYSMAL administrative services.

If you want to read a real Pollyanna analysis of McCains health care program read: Fortunes’s “Why McCain has the Best Health-Care Plan” It Explains how employers will pass their savings on to the employee…because of the competitive labor market- huh? is that why wages have been stagnant since 2002? It also tells how the magical fairies of deregulation will use their wands of competition and bring the evil price beast to it’s knees. Just think of how these selfless little magical beasts have made life better, airlines, phone companies, savings and loans, banks.

So, I ask you Mr. McCain, what choices are you giving me really?

Laissez-Faire

I just finished reading a commentary on CNN by a CEO named Carl Schramm. Carl, bless his heart, is lamenting the threat of a wave of government intervention in our economy. He wrings his hands and seems to say that since there is a danger of bad things happening the government should keep its hands off of the economy. Laissez Faire is the holy grail of economic prosperity.

Well Mr. Schramm, Laissez-Faire is what caused this melt down in the first place; following the buck isn’t always what’s best for society.

I wrote in an earlier post (Banks- or- I wish Adam Smith’s invisible hand would stop touching me there.) about the banking industry charging fees everywhere they can.

Health insurance companies are giving minimum services for whatever the market will bear and cutting off whoever they can who need their services.

We are bailing out the financial industry, all the while being berated for being too greedy, using too much credit, and not being careful about our investment. I must have been hit in the head because I don’t remember all that.

Politicians are telling us how we are going to have to sacrifice. Why? Because we have had so much benefit from this boom? What are the beneficiaries of this recent financial boom going to sacrifice?

I don’t know if anyone has noticed but wages have been stagnant since 2002. Our free market choices have degraded to a game of pick your rapist in banking, health insurance, and retirement. Our political system has long been a system of voting against the most odious candidate but now it has moved onto other parts of our life.

The most frustrating part is, there is no one to pressure for change. Faceless Corporate America is a tough target with no one responsible for its decisions. Not that I would expect a 40 or 60 million dollar a year CEO to take any responsibility.

I could push for change if only I could find a place to push. I feel like Archimedes, I could move the world if only I could fine a place for the lever. Well maybe it’s more like Sisyphus and his rock.

Sacrifice

I am, even as I type, listening to Senator Obama speak for the bailout. He made a statement that has been used time and time again when asking the American People to get in line and cooperate. He said, “we will all have to sacrifice.”

Well, news flash for you Mr. Obama, and you Mr. Bush, We have been sacrificing.

I would ask how are you gentlemen are going to sacrifice? Is there any way that YOUR families are going to have to suffer, give up, sacrifice, for the good of our country? OUR families may have to postpone college, lose jobs, hold down multiple jobs, fail.

What will you personally sacrifice, as an example, so we can, in good conscience, sit at our supper tables and tell our children that they have to sacrifice their future, for the good of our country?

Your Economy, My Economy

President Bush warned, “We are in the midst of a serious financial crisis. Our entire economy is in danger.”

I would say to him that YOUR entire economy is in danger, MINE is already in the tank. With sub-inflation rate raises for the last several years, rising health insurance costs, children in colleges with rising costs and reduced student aid, sky high gasoline and heating prices, my world had been in a pinch for quite a while.

Well Mr. President, now that YOUR economy might feel a pinch and the multimillion dollar CEO’s are hurting, well something must be done. Drop everything and bail’em out.

Some kind of health care reform will have to wait.

Maybe we can afford to educate the next generation, this one will have to fend for itself.

Here’s your sound Bite

I received a bullshit survey from one of the political parties the other day. Which one doesn’t really matter since they are both cut from the same cloth. It was designed for sound bites, not to find out what difficulties I and my family are experiencing. If you really want to find out what I think, hire yourself someone who can write a survey and not leading questions for numbers in your next speech.

You people are out of touch with what is going on out here. Pull your head out of wherever it is and stop worrying about winning, that will take care of itself if you can really address the needs of the people.

I’m only one person, but here’s what I think you would see if you lived in the real world.

I see double digit inflation right around the corner and no salary increases to counter it, assuming you keep your job.

I see my insurance rates last year rising %13 and even though my company is self insured, the insurance company that administers the plan raised their rates 9% so only %4 was due to medical expenses.

I see us becoming huge raw materials exporter, that used to be one of the measures of a third world country, but here we are. Our engineers are in India, our manufacturing is in China, who is going to be able to buy anything here.

So there you are. There’s some of my answers. Call me and I’ll give you more if you like.

Walmart – Always Lower.

So, I’m watching TV and a commercial comes on. This woman is asking this obnoxious sales clerk why his prices on name brand electronic are so high. The sales guy squirms and looks even more slimy but the perky shopper says again, “why are your prices for NAME BRAND electronics so high and WALMART’s so low.” Well obviously since it’s a Walmart commercial he doesn’t answer her, but I will! It’s because they aren’t even the same product. That’s right, a Walmart Sony for instance, isn’t a real Sony, it’s a specially contracted, specially manufactured product made just for Walmart with the Sony name on it and with every possible corner cut to make the price lower. When it fails, Sony might not even be the one’s to service it, or like the Mongoose bike I bought my son, they might have a “special” service section for Walmart bikes. With my son’s bike you find out when you get it home that the manual even says that the bikes sold at Walmart are not the same.

So here’s this Ad, inferring that the only difference in the name brand products sold at Walmart is the price, when in reality, the name brands sold at Walmart, everything from clothing and shoes to televisions, are cut rate look alike products with a fancy name.

I remember when Walmart meant American made, it meant middling quality. Now they stick to the motto, always lower prices, on cut rate products. Why do I shop here, well since they’ve driven nearly every other store out of town I don’t have much choice, but I do go there last so I can see if I can get what I need ANYWHERE else.

Back in Time with the New Subprime

I feel like I’ve gone back in time and I didn’t even get to drive a tricked out Delorian.

Didn’t we have a deal a few years back where we, those of us with jobs and mortgages, bailed out them, the saving and loan executives who sat behind big desks when we got our mortgages and asked us important questions about our worth as human beings in society? We saved their sorry butts and they went back to their McMansions in their gated communities in TEARS. It took days before their friends could get them out of thier houses and get them started in their new life as high paid lobbyists.

Now here we are again, institutions that ran subprime mortgage companies (some of them lived in the COUNTRY and had a lot of TIME) made a lot of money and paid their important exec big bucks. Now the chickens have come home to roost, be butchered, or I don’t know what, and who is going to have to pay? Well the people who benefited most from these risky practices and questionable advertising and misrepresentation, right? I’m sure that with what we learned with the Savings and Loan problems that our governmental representatives have put new measures in place so this time they will march right down and make the people responsible pay. Heck, how hard will it be to garnish their wages since they’re right there lobbying anyway.

No folks, we will pay. We who can’t even get an interest rate on our savings account that matches inflation. And when it’s all over, and we’ve made everything right, you can rest assured that your reward will be another set of rules and regulations that help out the banking business.

Remember bankruptcy reform? Men in fine suits talking about how irresponsible credit use had to be curbed. What he didn’t say was that most revolved credit card debt is:

1) Medical Bills (duh)

2) Car Repairs (gotta get to work)

3) Emergency Travel (Mom died)

How dare they be so irresponsible!!

Now shut up and leave me alone, I gotta fix this flux capacitor so I can get back to the future. I’m gonna look so I can get in on the next big bailout, I hope I can sleep at night though, this darn conscience is a real liability in this business.

Banks- or- I wish Adam Smith’s invisible hand would stop touching me there.

Let’s talk about banks. I remember, back in ancient times when I was in school, being taught that banks pay you interest to keep your money and use your money to make loans and investments. From the loans and investments they make their money. In other words, they pay you to borrow your money, and you pay them to borrow the money that someone else has loaned them. Simple right, but something has happened. I can’t understand why the interest you receive for any kind of deposit doesn’t AT LEAST match the inflation rate. The experts always say Americans don’t save enough but why should we, if you save in a typical saving account you are losing money. If inflation’s 3.5 to 4% and your savings are getting 1.5 to 2%, less fees for EVERYTHING, you are losing a nice little chunk of change. Meanwhile, your full SERVICE bank is charging probably 9 to 15% for non-home loans while charging you for everything.

Not only are they charging for everything, but they are finding ways to develop new profit centers. Take debit cards for instance. When these things started, they were perfect for new young adults, use them like a credit card but when you were out of money they stopped working. No more! The Banks fixed them so they will continue to charge, just like a credit card but with a fee for EACH PURCHASE. Oh, and if a purchase includes a security deposit, like rentals do with credit cards, and the seller doesn’t tell you, like they do with credit cards because it automatically clears before it matters, the money comes out of your account immediately. So if you rent some ski equipment and they put a fee on your care equal to the value of the equipment, then you return the equipment and go have dinner, that deposit will probably still be hanging around, maybe for a couple of days. Now each purchase you make gets wacked with an overdraft fee. You buy some Chapstick, that’s a $35 purchase. I don’t know what the reasoning was behind the change but it probably was something like, save the customer the embarrassment of being refused. Hell, if it’s gonna cost me $35, embarrass me. Sure if it’s a choice of getting arrested for a bad check or the fee I’ll take the fee, but these card systems are more sophisticated than that!

I think that the reason they do it this way is because they can!

GM Strike – A False Sense of Job Security vs. Pensions

The auto industry and the United Auto Workers (the UAW) are trying to work out a new contract.

On one hand you have the Union, champions of the underdog. Anyone who has been laid off can tell you how quickly they can lose interest in you when you are no longer a dues paying worker. Troubled industry? Maybe a pay cut to put the likes of you back to work, ha. They sell labor (that’s us) to industry, that’s their business.

On the other hand you have the Auto Industry, whining about benefit and pension costs. They especially complain about all the retiree’s health care benefits. Benefits that were prepaid out of the workers pay for 30 years. What they don’t mention is that the companies have raped what was called “over funded” pensions and used the money for their own ends and now, gee guys, sorry, your pension fund is broke and we need to cut you off or we’ll all go down.

Here’s the real deal, we don’t have anyone who truly represents us, in the workplace, in the government, in the economy. We are alone! Our parents have been stripped of their pensions and health insurance, our retirement programs are a joke, and there’s virtually nothing we can do.

Maybe it’s time for us to start some of the old CO-OP ideas for health insurance, banking, and retirement. Well it so happens some companies do something kind of like that BUT the health care industry still forces them to work through an insurance company. The company I work for is “Self Insured” this means we pay for our coworkers health care. If someone gets cancer or has a baby, it’s a little higher, if no one gets sick it’s a little lower. Now everyone talks about the rising cost of health care but two years ago our premiums went up 13%, only 4% because of medical costs, 9% were increases in the insurance company’s fee to administer the program, and they are abysmal, slow to pay, slow to respond, losing paperwork.

Anyway, my point is (yes I did have one) is that these two titans, the Auto workers and the UAW, are clashing over power and influence. We are but grist for the mill. If we realize this now, maybe we can break a tooth or two in the bread they make out of us.