Fixing Healthcare, Part II

Indianapolis-based Wellpoint is in hot water for raising premiums on individual policy holders by nearly 40%. Except, they’re not really in hot water because no one that can do anything about it got screwed:

WellPoint, in its year-end earnings report, said its medical costs rose 8.9 percent in 2009. And Binns said reform must address the main drivers of rising health-care costs, such as price increases from hospitals and doctors.

Still, some of Anthem’s individual customers in Indiana are left wondering how their rates could jump so much more than that in a single year.

Strickland, 60, the bread distributor, said his premium is about to rise from $301 to $401 a month for a plan that carries a $5,000 deductible.

“It doesn’t bother me that they’re making money,” Herchenroeder, 53, said. “I just don’t see how anyone can justify a 31 percent increase in a year.”

He said that’s how much his WellPoint premiums increased in December — giving him a $941.78 a month premium for a family plan with a $6,000 deductible.

$941.78 a month is more than my mortgage, and almost as much as my mortgage and car combined. That’s $12,000 a year in some cases, or about a third of the average Hoosier’s income. Plus a high deductible! That’s a third of your income that, in most cases, doesn’t even go towards anything!

I’m wondering when our healthcare debate is going to refocus attention on doctors and hospitals instead of insurance companies. It doesn’t bother me that insurance companies make money, either. Most of them don’t make more than a 2% profit each year which isn’t much when you consider any good person or company or government should have 10% of their operating budget in savings.

The insurance companies, or our government, can’t be expected to just lose money on these things. They at least have to break-even, otherwise it’s just an unsustainable mess. Yet, for reasons no one seems to understand the cost of healthcare keeps going up because somehow, hospitals have to keep raising their rates.

For that reason, I’m left to believe that hospitals are seeing expenses go up because of increased demands from something. I doubt it’s doctor and nurse salaries; most of them only make a respectable amount. I doubt it’s equipment – you buy an MRI machine once and you pay it off and it should be good-to-go for a while. I doubt it’s malpractice – that doesn’t seem to add up to much nationally. I doubt it’s drugs because that market is too competitive and generics are always in the pipeline.

Or, it could be that hospitals are so overwhelmed with uninsured people that can’t afford health coverage that hospitals are forced to eat the costs because you can’t let a guy bleed to death and you can’t bleed that turnip, either. That, in turn, leaves the hospital to raise the cost of other services on insured people to help them break even. That translates to higher premiums for those with insurance. It’s a vicious chain right up to the top. The poor person comes in and his expenses keep defying gravity and keep getting dumped up the chain until it reaches the insurance companies, and then you.

If only there were some sort of national healthcare system where people could afford coverage based on their incomes from larger pools of people with competition across state lines…

Unemployment Trauma

The NY Times has an interesting piece on the trauma of unemployment:

Nearly half of the adults surveyed admitted to feeling embarrassed or ashamed most of the time or sometimes as a result of being out of work. Perhaps unsurprisingly, given the traditional image of men as breadwinners, men were significantly more likely than women to report feeling ashamed most of the time.

There was a pervasive sense from the poll that the American dream had been upended for many. Nearly half of those polled said they felt in danger of falling out of their social class, with those out of work six months or more feeling especially vulnerable. Working-class respondents felt at risk in the greatest numbers.

Nearly half of respondents said they did not have health insurance, with the vast majority citing job loss as a reason, a notable finding given the tug of war in Congress over a health care overhaul. The poll offered a glimpse of the potential ripple effect of having no coverage. More than half characterized the cost of basic medical care as a hardship.

Many in the ranks of the unemployed appear to be rethinking their career and life choices. Just over 40 percent said they had moved or considered moving to another part of the state or country where there were more jobs. More than two-thirds of respondents had considered changing their career or field, and 44 percent of those surveyed had pursued job retraining or other educational opportunities.

My Dad and I were discussing his nearly two-year unemployment stint earlier today. I’ve tried for years to get him to go to school and study harder than he thinks he can. My Dad, I believe, is a good benchmark for most other average Americans. Frankly, I think a lot of people looking for work are just looking for something to plop in their hometown and refuse to do much else. Dad does not believe anyone is capable of going to school and working at the same time because he “has to have time to sleep.”

I respected John McCain on the campaign trail last year for telling people their factory jobs aren’t coming back to America. He was right about that and people like my Dad are dragging their feet in adapting to this brave new world. Dad said just today that rather than “helping people go to school or get a degree, the state should just be ‘creating jobs’.” That’s a dangerous kind of reliance on the government that demands the easiest solution for the populous. Not to mention the fact that government doesn’t just “make jobs”. No need to learn something when you can just show up and move boxes for $20 an hour.

For many others, what kind of a boom would we have if healthcare were granted to everyone? The people trapped in their dead-end cubicle jobs could finally be freed to develop new businesses and industries because they wouldn’t be shackled to someplace just for the health insurance. I think businesses know that and want to keep that Ace up their sleeve.

It’s a brave new world.