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12/9/2009 – Editorials

By Richard Peterson

I had an individual ask me to explain why we need health care reform.

The conservatives are fighting against it tooth and nail. They are wrong, as usual. Here’s why:

1. Currently in the US we spend one in every six dollars on health care. If we stay on our current course, we will be spending one in three dollars in the coming decades. That is simply unsustainable.

It’s critical that we rein in skyrocketing cost growth as we expand coverage and protect quality and choice for all Americans.

2. Government programs, such as Medicare and Medicaid, account for about 46% of health care spending. Expenditures in the United States on health care surpassed $2.2 trillion in 2007, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980. Stemming this growth has become a major policy priority, as the government, employers and consumers increasingly struggle to keep up with health care costs. Unless health care costs are brought under control, the federal government will never have a chance of balancing the budget.

3. In 2007 US health care spending was about $7,421 per resident and accounted for 16.2% of the nation’s Gross Domestic Product (GDP); this is among the highest of all industrialized countries. France, for instance, covers everybody and spends about $3,300 (2005) per person, less than half what the US spends. France’s infant death rate is 3.9 per 1,000 live births vs. 7.0 in the US. Life expectancy is two years longer in France than in the US.

3. Health insurance premiums for American families continue to skyrocket. In the past year, the national average annual family premium for employer-sponsored health insurance rose to $13,375 in

2009 — a shocking 5.5 percent increase during a recession when inflation actually fell by 0.7 percent.

The average family premium is projected to rise to over $22,000 in the next decade if there is no health care reform. That’s reason enough to support health care reform. The status quo of rising premiums is simply unsustainable for families, for businesses, for state budgets and for our national economy. In every state, premiums have increased far faster than wages and are consuming increased portions of family budgets. The White House’s analysis found that in the last decade families’ premiums in North Dakota went up 101 percent, outpacing wage growth of just 37 percent.

4. The average bill for an appendectomy is $35,000, according to Nora Johnson, a billing advocate with Medical Billing Advocates of America. For the same procedure, Medicare will typically pay a severely reduced price of roughly $5,000. An HMO may have a contract to pay $7,000 to $8,000 and a commercial insurer, say Aetna or BlueCross BlueShield, may pay $10,000. "But the uninsured will be dragged to court and have their wages garnished until they pay the $35,000," Johnson says. Our health care system is especially harsh on the uninsured: not only do they pay all costs out of pocket, but their bills can be many times higher than those paid by insurance companies. It’s not unusual, if you don’t have insurance, to overpay by 300% to 500%, says Randall Marrs, owner of Medical Audit Recovery Services in Tulsa, Okla.

So what effect does this have on you? After all your insurance company is paying the bill? First, there is the co-pay or deductible amount. If you have a 20 percent co-pay for every $100 overcharge you pay $20. Secondly, on most policies there is what is referred to as a lifetime cap. This is the maximum amount that the policy will pay over the lifetime of the insured. Billing errors reduce the amount of cap or reserve that you might need. Faced with an extended hospital stay or a catastrophic illness, you could find yourself depleting your life’s savings or even filing for bankruptcy.

5. Each year nearly a million people face bankruptcy because of medical expenses. Reform, with an affordable, high-quality public option that can spur competition, is necessary to bring down skyrocketing costs.

6. BlueCross BlueShield is a very good insurance company. I haven’t heard of anyone being denied a medical procedure by BlueCross BlueShield. But, BlueCross BlueShield is very expensive, about $13,000 per year for a family policy. Other insurance companies are not quite so generous. They frequently deny medical procedures they feel are too expensive. In your Internet search engine, just type "insurance companies deny coverage" and you’ll get more than 8 million examples of this practice.

7. Type in the words "health insurance companies deny claims" and you’ll get more than 9 million Web sites dealing with this issue. The health insurance industry has its own death panels and rationing apparatus.

8. All insurance companies, including BlueCross BlueShield deny coverage for pre-existing conditions, leaving many people out in the cold.

In hopes of having a bipartisan health care bill, the Obama Administration fostered the 2,000-page bills passed by the House and the one being considered by the Senate. There has been no bipartisanship at all.

Putting everyone under Medicare would have been a far better strategy. I don’t know of one senior citizen that doesn’t cherish his or her Medicare. They must all be socialists.

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