Fixing Health CareSubmitted by Sue the Libertarian on Thu, 11/22/2007 - 12:37
Published Friday, February 17, 2006 in Omaha World Herald
Midlands Voices: HSAs would produce lower health costs
BY NYDRA KARLEN
The writer, of Bellevue, is licensed to sell health insurance and life insurance in Nebraska.
Froma Harrop's column on the Feb. 14 More Commentary page missed the whole point of the benefits of health savings accounts.
When I owned a medical savings account (a precursor to the HSA), I shopped around. Any costs under $1,250 were my responsibility and paid from my savings account.
When it was time for my mammogram, I asked for three or four competent providers. When I first asked, no one knew what it cost. Later, I found the range of prices to be from $80 to $120.
When I needed an ultrasound, I asked about a cash discount. Guess what? Discounts are available, as providers don't like the waiting and paperwork, either.
It's human nature to shop around, and that hasn't been happening with health care for some time now. The result has been staggering increases in costs.
Why are prices on high-definition televisions dropping and prices for health care escalating? Ronald Reagan was correct when he said, "Our system freed the individual genius of man. We allocate resources not by government decision but by the millions of decisions customers make when they go into the marketplace. If something seems too high-priced, we buy something else. So resources are steered toward those things people want most at the price they are willing to pay."
Health care is no different. Health insurance today is prepaid medical. No self-respecting insurance company of yesteryear would have covered well-baby checkups or childbirth. Insurance is for unexpected losses, not the expected loss like the expense of having children.
When we allow insurance companies to cover expected losses (like our "traditional coverage" today), they not only must pay for the loss (medical expense) from our premium but also include the heating and cooling costs of the insurance building, the costs of the paper and postage of the explanation-of-benefits forms, the salaries of the clerks and the extra employees at the clinic and the agent's commissions, to name a few.
My first child was paid for with five monthly payments. We had great insurance, but childbirth was not covered. If either my child or myself had needed expensive special care after childbirth, that would have been covered. That would have been an unexpected loss.
As more people get HSAs and start to shop around for non-emergency procedures, prices will fall for all. The major medical policies of HSAs have lower costs because they practically eliminate the overhead involved with payment while still protecting into the millions of dollars for truly catastrophic accidents or illnesses.
Sometimes, the difference in premium between what Ms. Harrop calls "traditional coverage" and the HSA high deductible actually funds the savings account, with money left over. Even a Medicaid parent would think twice before heading directly to the emergency ward if he or she were given a savings account for day-to-day expenses and got to keep any remaining funds.
It seems Ms. Harrop is more concerned about deductions and loss of taxes to the government than making sure folks get health care. She seems to have bought into "tax the rich until it hurts," which often means "tax the producer."
Ms. Harrop should investigate the Web site fairtax.org for a better mousetrap with no deductions or exemptions. Current bullet-hole-ridden tax codes are killing our tax system, and that has nothing to do with health care. [Or better yet, Ron Paul campaign to eliminate the Income Tax]
She also said, "Demonically, the Bush proposal would give employers new reasons not to offer traditional health coverage or any medical benefits at all." But HSAs would allow employees between jobs to afford to keep their low-premium insurance, and their premiums could be paid directly from their savings.
Would this be better than allowing only the COBRA health benefits, which generally result in sticker shock for employees? Linking insurance to our employer is a fairly new phenomenon and has wreaked havoc as people change jobs.
If you haven't heard of HSAs as an option from your agent, remember that commissions are based on premiums. If I sell a policy that costs $750 a month and has all the bells and whistles of a prepaid medical, I make about three times more in commission than if I sell an HSA policy that costs $250 a month.
If the family involved opts for a $5,000 deductible, their employer could give them full coverage and still save $1,000 a year for themselves. If prices fell, so would insurance premiums.
An experience in 1993 when Hilllarycare was considered by Congress confirmed my thoughts on competition creating excellence in medicine.
I was diagnosed with an Acoustic Neuroma, not cancerous, but requiring brain surgery, and was referred to my local University teaching hospital in Nebraska where existing hearing was preserved in only 25% of the cases. Mayo clinic wasn't much better at 35%. Facial nerves were severed in 10% of the cases leaving one side of your face permanently disfigured.
Although I had lost much of the hearing on my left side, losing all of it meant no directional hearing so I shopped around.
What I found was House Ear Clinic in LA, more recently made famous by Rush Limbaugh, where hearing was preserved in 70% of surgeries. They had minuscule problems with the facial nerve and no headaches.
My University surgeon phoned to ask why I had picked up my MRI's (to FedEx to House) and I told him I had to go with the numbers. He said that for me it would be 100% or 0%. I asked him about residual debilitating headaches I was concerned about following surgery and he told me there were headaches with all surgical approaches. I had no headaches after my surgery at House.
My insurance had a stop loss of $1700 (preferred providers) or $2000 otherwise so I lost $300 and travel expenses by flying to LA for the surgery. I had the surgery the day of the Northridge earthquake but that is a story for another day.
Some may say I was lucky to be able to afford that procedure (rather than entering the skull in the back and poking into the bony canal that encases the nerves, my House surgeon enters from the side, retracts the brain and chips out the bony canal to provide a clear field of vision). The surgery is also much shorter in length. Intensive care is only one day rather than two, as well. recuperation is shorter.
The 'poor' couldn't afford to go to House. But here's what happened afterwards. My local surgeon assigned a resident to follow up and he phoned me with a questionnaire. I explained my outcome at House and the benefits of their procedure an my local doctor adopted their procedure. Now everyone in my local community has that option.
Under Hillarycare,. House Ear Clinic was not in my Zone. Competition would have been stifled and my outcome in question.
Thirdly, hospitals prior to Medicare were not profit centers. Most were run by churches or universities. When Medicare guaranteed hospital room payments for all elderly (rich or poor), hospitals became profit centers and look at the situation today. Very sad.