Health insurance

ok then....
Health insurance is something to defray the astronomical cost of health care in this day and age.
Commonly offered as a benefit of employment, it is managed by a health insurance provider, who deducts a nominal fee from your paychecks (in most cases) and in turn pays the majority of the costs for visits to the doctor and hospital stays/procedures/tests/prescription medications.
Being sick now a days can be a cause of financial ruin and/or death without the help of health insurance.
Providers usually have a tome of rules limitations and such governing what kind of procedures are covered.

OK, our fair queen of the slipstream has been complaining (bitching? Can a Queen bitch?) about this being empty for neigh onto 40 days and 40 nights, if my flood level gauge is working correctly. I shall now attempt to tell you what health insurance is. Be forewarned, my only experience is in the confines of America. So you folks living under Socialism (and that would be pretty much everywhere else) may find fault with my brief synopsis. My words for you would be the same as when Jerrold Nadler hears voices from the cheese croissants: "Eat me, you fool!"

Once upon a time, there was no such idea as Health Insurance. Much of this had to do with the fact that when you got sick, you died. Life was much easier then. However, as lifespans began to increase (like Nadler's belt size), medical costs began to go up.

The first forms of health insurance in America began as "Sick and Accident" policies. The upper echelon of these policies were called "Hospital Indemnity." The S/A policies paid workers a set amount for each week that they were out of work due to illness. They typically cost a nickel or a dime a week, and would pay $5 or $10 a week as a benefit. Doesn't sound like much? Well, it was back then. This was a form of insurance that got lumped into what is known as industrial insurance because it was primarily sold to working class families. (Think of Ralph and Norton in The Honeymooners.)

The HI policies actually paid a set amount for room and board in the hospital and came with a surgical benefit. These were more expensive policies, and were usually purchased by the middle class and upper class. The cost depended on what the insurance company would pay in case of hospitalization.

Please note that none of these policies paid for doctor's visits and routine checkups and stuff like that. "Oh, my God, dannye, what did people do back then in these most horrid of times? I'm suffering just thinking about it!"

Well, they did what all good people should do. They counted on their families, their churches, their communities, and their thrifty savings to get by. Mind you, this was many years before Oprah and the whining of America, where a politician could bring a sick child up and thrust him into the camera, a tear running down his cheek, screaming, "Think of the children!"

As time went on and medical costs skyrocketed, due to the advances of science, a more comprehensive health insurance was developed. (I started to say, "needed." That's wrong.) It was generally referred to as Comprehensive Major Medical (CMM) insurance, or just Major Medical. Since bureaucrats put us in the mess to need this type of insurance, it was necessarily built on the bureaucratic model. That is, so freaking complicated that no normal person could understand it. It came with deductibles (the amount you are out of pocket before the insurance kicks in), co-insurance (the amount you have to pay after the deductible is met in order to get 100% coverage), and limits (what's the max the insurance will pay, in worst-case-scenario).

Most folks in America now get this form of coverage from their employer. Oh, wait, I'm having a stroke laughing my ass off here... No, most folks in America are paying for this form of insurance as part of the cost of employing them. They just think the employer is paying for it. How do you think those folks back then afforded the doctor bill? They weren't being screwed out of money they earned by bogus schemes such as Group Health Coverage.

OK, I'm bitter, aren't I? Well, I didn't get real bitter until Medicare came along. This is the evil monster that has caused the situation to cross over from a bad deal to a death wish for any form of medical care that you'd care to have.

Have you seen the number of family physicians who have said, "Fuck it," due to all this government involvement? You blame the HMO? Hell, blame Medicare.

OK, back to basics. If you get CMM coverage from your employer, you better damn well find out what happens when you leave the "group" rate if you change jobs. If you want to buy CMM coverage on the open market, good luck. The ambulance chasers have sued the physicians down to the point where no one can afford it, except the very wealthy.

JP, is that enough, or do I have to do more? My fingers are tired.

At the beginning of the 20th century, Americans were served mostly by “country” doctors. The doctors accepted cash and barter for their services, but except for very large towns and cities, they traveled. Sick people might have to wait months or travel very long distances to see a doctor. The average life expectancy in 1920 was 59.

In 1929 at Baylor Hospital, a list of unpaid accounts was sent to the new administrator – who happened to be the former local school superintendent. He recognized the names of many teachers on the list, and knowing they would never be able to pay with the meager teacher’s salary, developed the “Baylor Plan”. Teachers paid 50 cents a month and were guaranteed 21 days of medical care at Baylor Hospital. Hospitals around the country scrambled to develop plans of their own. This was the start of what became known as the Blue Cross plans. The first Blue Shield plan, offering pre-paid physician coverage, was established in California in 1939.

In the early 1940s, group health insurance coverage became popular. It was attractive to employers because it was a fringe benefit, exempt from wage controls. When the federal government ruled that revenues used to pay a worker’s health insurance premium were not subject to income taxes, a huge explosion of commercial health insurance companies happened.

Now we jump ahead to the 1970s, because this is where problems and abuse of the system began. The HMO (see below for a definition) had been around since Kaiser began in 1947. HMOs were growing in popularity because they kept costs down by combining the insurance company with the hospital/physician service. Before 1973 most states kept tight controls on these networks, but then the 1973 Health Maintenance Organization Act was passed. The act had some great ideas in it (provided grants for HMOs on Indian Reservations and required employers to offer HMOs to all employees) but it also contained some nasty riders. No more restrictions on pricing for medical goods (think $20 Tylenol), services, and profits. This created an immediate conflict of interest on the HMO’s part (Do we give the patient an MRI or do cheaper but more dangerous exploratory surgery and pay ourselves the difference?).

But the Nixon Administration wasn’t finished with their Health Insurance revamp yet – in 1974 the Employment Retirement Income Security Act (ERISA) was passed. This law specified that a published summary plan must be distributed to participants within 120 days after adoption of the plan and within 90 days after an employee becomes a participant. Sounds peachy – but this law carried the most damaging bit of legislation in US healthcare:

(b) The provisions of this subchapter shall not apply to any employee benefit plan if-- (1) such plan is a governmental plan (2) such plan is a church plan (3) such plan is maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws The provisions of part 7 of subtitle B shall not apply to a health insurance issuer solely by reason of health insurance coverage provided by such issuer in connection with a group health plan if the provisions of this subchapter do not apply to such group health plan.

To translate: if you try to sue your insurance company for medical malpractice, wrongful death, fraud, etc. your case will be dismissed unless you work for the government, work for a church, or are an employer following the law that you must carry coverage.

You may sue for a denied benefit, but you must show that the plan administrator’s decision Arbitrary and Capricious, a very difficult standard to meet. Even if you win, ERISA limits damages to delivery of the benefit, but remember, you have been in court battling a corporation – it will be months later. If you die or experience further injury because of the denial of care, neither you nor your survivors will be compensated, nor will the HMO be punished in any way.

As if this weren’t bad enough, the 1980s brought arbitration into the picture. Suddenly, enrollment packages included an agreement to arbitrate any disagreements between you and the insurance company instead of going to court. When you sign an arbitration agreement you are signing away your 7th Amendment right to a civil suit in front of a jury to settle disputes. You do not have to sign this form and most attorneys recommend you do not. So far the only Insurance Company to deny coverage for not signing an arbitration agreement is Cigna and there is a case currently pending in California to decide the legality of this.

At the dawn of our new century, there are calls from all over for Insurance Reform. To some, this is a call for National Healthcare. For others, it is the lifting of Federal restrictions on State’s rights to regulate standards and administrative protocols.

This small glossary listing is from The Cystic Fibrosis Foundation at http://www.cff.org/default.htm.

Kinds of Insurance

Individual Insurance: Policies that provide protection to the policyholder and/or his or her family. Individual and family policies are available through: an insurance agent or broker, the conversion of a group policy, or an open enrollment period at some Blue Cross/Blue Shield companies.

Group Contract: Health insurance provided through an employer or other entity that covers a group of persons as a single unit. Group policies are often available through large organizations such as employers, fraternal or trade organizations.
Some group policies can be extended for a short term when the individual leaves the group through the Consolidated Omnibus Budget Reconciliation Act (COBRA), and may later be converted to an individual policy.

Blanket Contract: Health insurance that covers a class of persons not individually identified. It is used for groups such as athletic teams and for employee travel policies. This type of insurance usually only covers dismemberment and accidental death.

Different Types of Coverage

Indemnity Insurance: Insurance policies through which benefits are paid in a predetermined amount for a covered loss. Usually, the insured person receives services and submits a claim to the insurer, and providers are paid fees for the services rendered.

Major Medical Expense Insurance: A form of health insurance that provides benefits for most types of medical expenses (surgical, hospital) up to a high maximum benefit. Such contracts may contain internal limits and usually are subject to deductibles and co-insurance costs.

Specific Disease Insurance: Insurance providing a benefit, subject to maximum amount, for expenses incurred in connection with the treatment of specified diseases, such as cancer. These policies are designed to supplement major medical policies.

Prepaid Group Practice Plan: A plan under which specific health services are provided by participating physicians to an enrolled group of persons, with a fixed periodic payment made in advance by or on behalf of each person or family.

Health Maintenance Organization (HMO): A plan that offers a variety of services including physical exams. education, and preventive medicine programs, in exchange for a fixed-monthly premium. An HMO may be an independent company, or it may be sponsored by an employer, insurance company, hospital, union or government agency. Members either select or are assigned a primary care physician who is responsible for all referrals regarding this case.

Independent Practice Association (IPA): Plans that contract with individual practitioners who work at their own offices. Unlike salaried HMO staff, IPA physicians are allowed to treat patients from other health care plans, along with their own fee-for-service patients.

Preferred Provider Organization (PPO): A network of physicians and hospitals that provides an insurance company or employer with discounts for its services. Consumers covered by a PPO are allowed to use providers outside the PPO network, including specialists whenever they choose, for an additional expense.

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ERISA in the United States Code: http://www.benefitslink.com/erisa/crossreference.shtml
The Cystic Fibrosis Foundation at http://www.cff.org/default.htm
The Constitution of the United States of America: http://www.access.gpo.gov/congress/senate/constitution/amdt7.html
Life Expectancy Tables: http://www.efmoody.com/estate/lifeexpectancy.html
Blue Cross/ Blue Shield of Texas: http://about.bcbstx.com/company/history.htm
"For our Children" by Christopher E. Angelo

There has been a lot written about health insurance. Here, and elsewhere. It would seem that the topic of discussion was exhausted, but I do have one simple point that I feel is not mentioned enough. Health insurance is not insurance.

The basic idea of insurance is that it is a risk pool. Many people pay a little money for a single, expensive event that is not expected to happen to any of them. People buy home insurance, but a house fire is not an expected event. People buy auto insurance, not expecting their car to be totaled. And some medical insurance, such as catastrophic plans, does cover very rare events. In that sense, it is insurance, because it is meant to cover rare but expensive events. But much of what health insurance covers are expected costs: if you make two doctor's visits a year, that is not within the meaning of "insurance". It would be comparable to purchasing auto insurance and expecting it to pay for oil changes and car washes. Or expecting home owner's insurance to include cleaning gutters and carpet cleaning. The term "health insurance", then, is a misnomer.

This might seem like a technical point, but there are two different debates in health care: the economics and morality of distributing rare and expensive costs (which fits the definition of "insurance"), and the economics and morality of distributing common, and slightly less expensive costs (which is not truly "insurance"). Calling both of these topics "insurance" confuses the issue.