Since late last year, I have read several articles on the Affordable Care Act and where it should go. Also, read several other articles on how to fix it. None of these articles came close to what should really happen. My perspective is a little bit different; because as a broker I meet with future recipients of the ACA and they tell me their concerns.
The number one concern is cost. Cost of the insurance is only part of the issue. The cost of healthcare is the real issue along with too high deductibles and too high maximums out of pocket. These are real concerns for the average citizen and well it should be.
Let’s try to examine why the costs have skyrocketed in the past few years. Things to consider:
- Premiums have continued to rise mainly because most people enrolled have major health issues. The cost of healthcare has never been challenged or fairly reviewed. Why does it cost about $80,000 for a quadruple bypass when the cash price is around $40,000 and the insurance company pays on about $16,000? The reason is simple; the is a law called EMTALA. This law requires hospitals to treat anyone who comes into the emergency room without regard to the cost. If that person cannot afford the bill, they don’t pay, the hospital goes after them but rarely collects. The hospital; whether for-profit or non-profit needs money to keep the doors open. So the person who comes to the hospital without insurance but has the ability to pay to get hit with a bill around $40,000 for the cash price and the hospital uses the difference between the cost of the actual procedure and the amount collected to reduce the outstanding indebtedness from those who can’t pay. Tough to read but not to understand. It’s all about staying open and the costs must be met in order to remain open.
- The monthly premiums along with the deductibles and maximum out of pocket have increased every year, again because of the real cost of healthcare. The deductibles are growing so rapidly that in a few years it will exceed $10,000. Same with the maximum out of pocket. It now sits around $8150 and will exceed $12,000 per year in a few years. The average American cannot afford either the monthly premium nor the deductible or maximum out of pocket. This is like having a 2nd mortgage to pay each month.
- Consider for a moment that the average American cannot afford the cost of insurance because the premiums and deductibles and maximums out of pocket keep increasing annually and that eventually, people cannot afford to pay the monthly insurance premiums so that they will eventually drop the coverage and go without insurance. When it comes to paying the mortgage or the kids’ education; those and other daily expenses come before health insurance premiums. That is until something happens to them medically and they don’t have the coverage or the money to pay for the procedure or expenses related to the illness.
- The actual cost of healthcare is growing faster than inflation. Why is that? I might be because the suppliers, including pharmaceutical companies’ profits, must be maintained. The DME (durable medical equipment manufacturers, distributors, and others re equally guilty)
I don’t have an issue with that premise, but the profits are higher than in any other industry. The industry maintains that they need the money for R & D. Well that makes sense, but does anyone realize that pharmaceutical companies pay little or no federal income tax because they write off the profits against R & D. They can’t have it both ways as it is destroying our healthcare system with excessive costs for prescription medications.
- Pharmaceutical manufacturers sell their medications worldwide, but America pays the highest cost for these drugs. Why is that? There really isn’t a good answer other than greed and they can get away with it.
- Congress is not on the ACA because they have a better plan paid for by all Americans. Why shouldn’t we have the same coverage?
- Lastly, but not all-inclusive is that under the ACA, everyone has to have the same set of benefits even if they don’t need them. Just consider a female over the age of 45. Does she need maternity coverage or a couple in their 50’s need pediatric dental? Well, they don’t but it is included in their plans cost regardless of their need for the benefit. This is because in order to cover the overall increased costs of health insurance under the ACA, these costs need to be spread amongst all participants.
All these factors and many more contribute to the higher costs associated with healthcare and insurance premiums. It’s time we stand up and tell Congress to fix this mess and reduce the cost of health insurance and care in America.
The Barend Agency Inc.