Do you really need health insurance? Let’s face it, healthcare insurance companies are in the gambling business. They play the odds that they are going to make more money from you than they will give back in services. This is a pretty sure bet!

Starting with a good dose of scare-tactics, the insurance companies soon have you freaking out that a major medical catastrophe could happen at any time. Anxious, you want to get coverage immediately… only to find out that there is only a small, self-serving window of time for you to sign up – it’s called open enrollment. Eventually, when you do sign up, you give them total control of your healthcare needs and start paying big money. Yet, you soon realize that the fees you are paying could be in vain as health plans and insurance companies often have an allegiance only to their shareholders. They are not worried about you or your current health situation. Instead, they are more concerned about improving their profits and bottom line.

The business of health insurance

Obviously, health insurance is a great business. These insurance companies have what seems like an open budget for marketing, the lobbying of congressmen (who write the laws benefiting health insurance companies) and paying for brokers. Equally impressive is the money spent on generating the tsunami of online material designed to frighten everyone into buying health insurance.

The costs of health insurance plans vary. But ultimately, most people know that the less you pay, the less you get. This prescription has worked well for the many companies profiting from the health insurance business. For example, Medicare Advantage and All-in-One are types of Medicare health plans offered by private contracted companies to “manage” your care. With the help of tricky marketing, you get the impression that “everything” is paid for and “better” than a conventional Medicare plan. In fact, the truth is that you are often left very disadvantaged. Money received from the government to “manage” your care allow these companies to subtract their profit margin and overhead costs. After restrictions and limitations, you are left with a very watered-down Medicare plan totally under their control.

Health plans – Their risks and endless limitations

Health insurance plans have a track record of penalizing the individual. They lack cost-transparency and have endless rules, restrictions, limitations and exclusions, which help to ensure profitability. Also, most plans come with non-covered items and pre-existing condition clauses that simply add to your out-of-pocket costs.

Healthcare plans are complex and confusing by design. Different plans also come with different conflicts-of-interest. Comprehensive plans, HMOs and PPOs can put the insured in jeopardy of high fees that are generated by unnecessary testing and treatments. In contrast, capitation plans can put people at risk by potentially exposing them to delayed or withheld care. This happens because the provider has already been paid by the insurance company for the care of patients under that plan. Care may then be delayed or withheld because the money for testing and treatment comes out of the doctor’s pocket.  

Medicare plans are also highly susceptible to fraud. There are multiple ways to siphon off healthcare dollars from government sponsored programs. In fact, it is estimated that one in ten dollars delivered is fraudulent because of intentionally incorrect coding, unnecessary services, double billing or the use of fictitious names.

In addition to the endless rules and restrictions, health insurance plans commonly limit access and choice of clinicians. Often, you see only those providers and facilities that are in the plan’s network. Of course, staying “in-network” doesn’t guarantee convenient care. In reality, you often need pre-authorization and authorization on top of authorization before moving forward. You may also be asked to provide copies of medical records before any test or treatment is performed. Going “out-of-network” simply ensures that you will be surprised with medical expenses that you didn’t see coming.

Shamefully, there’s more. Another ploy invented by those in the health insurance business is to have primary care doctors and non-medical insurance staff act as “gatekeepers” for denying or approving referrals and authorizations for medicines, testing, treatments and visits to specialists. To make things more difficult, health plans routinely demand that everything they authorize be backed by an increasingly burdensome and complicated diagnostic coding system.

Health plans limit what they cover

What does your health insurance plan pay for? That depends. More than likely you agreed to the plan’s fine print rules when you enrolled. Invariably, you start with a co-pay. Then, you pay everything up to your deductible before your insurance plan kicks in. Consequently, because insurance plans cover only 70 – 80 percent of the cost of care, you wind up paying the remaining 20 – 30 percent.

Furthermore, there can be non-covered services and or pre-existing conditions claimed by the insurance company. You end up paying for those too – and, you continue to pay for the “privilege” of having the insurance plan. You soon realize that despite the insurance company’s clever marketing about covering hospitalization your 20-30 percent portion of those costs is going to break the bank, whether you have health insurance or not. 

After finally receiving your healthcare services, you will receive a summary of payments made to providers on your behalf. In addition to letting you know what they think should be an “allowable” cost for a service, they underscore what you’ve “saved”. This is a misrepresentation. Not only has your healthcare plan worked you over for payments, they have squeezed all the clinicians providing services to “accept” lower payments. These so-called savings simply go to the plan’s bottom line. 

Health plans and the business model

Health insurance plans began around the 1930s and initially covered only catastrophic care. Health insurers quickly realized that the fear-mongering business was a profitable game and soon plans evolved to cover day-to-day healthcare needs. The insurance business convinced the public into believing that even routine care should be covered and “controlled” by them. As a result of this belief, healthcare costs sky rocketed and healthcare providers became increasingly shackled to the whims of these insurance companies. It didn’t take long before employers were added to the mix. In turn, they were made to feel responsible for covering all or part of their employee’s health needs.
Many employers cannot afford the ever-increasing costs of these health insurance plans. Even if they could, their employees are often unable to shoulder their portion of the cost and go without insurance. The cost of health insurance is even harder to bear for small business owners and the self-employed since they are offered only plans that are more expensive than those offered to companies with a large employee base. Furthermore, because of these inflated costs, part-time workers and independent contractors routinely go without health insurance benefits. 

Do you really need health insurance? 

Believe it or not, most healthcare needs can be delivered affordably through doctors’ offices and outpatient clinics without the need for health insurance. Using direct pay solutions, patients can bypass the endless insurance rules, restrictions and profiteering middlemen. Also, consider that the probability of healthy young people, with good lifestyle choices, needing comprehensive health insurance to cover a catastrophic event is quite low. 

A prescription for treating healthcare

The current healthcare process is totally inconvenient, very costly, grossly inefficient and benefits mostly the insurance company. There are many reasons for this situation but much of it is attributed to the minefield of State and Federal Laws favoring the health insurance industry. In order to make delivery of care much more cost effective there is an urgent need to reform the current laws dictating healthcare. Ironically, in its present form, the health insurance business is mostly a disruptive process. It runs on the pretext of “protecting” your care while it wastes vast amounts of precious healthcare dollars on non-medical care, contributes to physician burnout and fails to make people healthier. 

One of the ways to control runaway healthcare costs is to return to consumer-directed choice for healthcare. This process works well for most, if not all cosmetic, weight-loss and infertility care services and because customers pay for these services, providers are strongly incentivized to offer competitive prices. For the most part, this prescription has resulted in a dramatic reduction in care costs. If cost-transparency and market forces were used in the delivery of routine as-needed, non-emergency care, their costs would also likely be driven down. With a realignment of health insurance plans to cover only childbirth and catastrophic events, healthcare consumption would return to being driven mainly by patient need and demand.

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  1. Brill., America’s Bitter Pill

Written by HEALTHdrum