By Ken Feltman
The trick to forgetting the big picture is to look at everything close up
– Chuck Palahniuk
Third of a series
One of the great myths of healthcare financing in the United States is that the uninsured are responsible for driving up private premiums by shifting costs. Get the uninsured into a government plan, some experts say, and part of the complex puzzle will be solved. Not quite: Uncompensated care shifts some costs to private payers but these costs are manageable, akin to what retailers lose through shoplifting.
The major cost shifting is from government programs – primarily Medicare and Medicaid – to private plans. Surprised? You should not be if you have an elderly relative who skips follow-up medical appointments or ignores prescribed dosages to save money. Sadly, the people feeling the squeeze are often retired after long years of faithfully paying into government plans. They are covered by government plans. The plans, however, do not cover all their needs.
Young and indestructible
The people opting not to pay for medical insurance are often young. They believe in the myth of youthful indestructability. The law of averages says that enough of them will avoid a catastrophic accident or illness to make the bet pay off in the aggregate. The unlucky few are left destitute or denied the level of care they would have received under private plans. For the young, choice sometimes has consequences. Others who opt out are on the fringe of society – illegal immigrants, criminals, misfits and the chronically unemployed. They cannot afford the cost. They get care, but at a lower level of technology and timeliness.
If we add up all the costs for all the people who do not pay into a medical insurance program of some sort, the costs are not enough to skew the financing to the point that the overall system needs radical repair. The reality is that to eliminate the uninsured, we are being asked to create a new system of universal insurance, backed by the government. But when costs are the issue, the uninsured are not the problem.
Being insured, however, is not the same as receiving treatment, as too many seniors can attest. So to remedy the failure of the current government plans to cover the costs for the current participants in those government plans, the government promises that creating a bigger plan with more extensive benefits is the solution.
What we have in the clamor for universal coverage is a bit of a public relations ploy: Americans are a generous people. In survey after survey, Americans agree that in reforming our system, we have an obligation to people in other countries who rely on the U.S. for medical equipment and treatment. We understand that if we curtail research and procedures in our own country, we may limit or deny state-of-the-art diagnostic equipment and treatment to people elsewhere. An inconvenience for Americans could mean the denial of treatment in other countries.
Confusion makes the sale easier for Uncle Sam
The planners know that an appeal that confuses lack of treatment with lack of insurance is more likely to succeed than simply telling Americans the truth: The current government medical insurance programs are being maintained only by shifting more and more costs to private plans, usually employer-sponsored plans. As costs are shifted, many employers cannot afford to continue their insurance for employees.
More and more employees cannot afford their higher share of the premiums, the deductibles and co-payments. This becomes a self- fulfilling prophesy. As Uncle Sam forces employers to pay more, fewer and fewer working people can afford their insurance and conclude that maybe Uncle Sam should pay. But wait a minute: We are Uncle Sam.
Uncle Sam now pays doctors and other healthcare practitioners to treat Medicare and Medicaid patients. The rates Uncle Sam pays, on average, are less than the cost of providing care to the patients. The result? Medicaid patients (and increasingly, Medicare patients) struggle to find doctors. Putting more people into government programs may destabilize what remains of the private system. When there is no one left to pass the costs to, we will try to pass the cost on to our children and grandchildren. When we cannot do that, we will call for medical price and wage controls.
What will Americans tolerate?
Will Americans tolerate this? Remember our managed-care experiment in the 1990s? It succeeded in its main goal of controlling costs without an overall reduction in health quality. But asking Americans to limit their choices prompted a bipartisan act of Congress: The Patients’ Bill of Rights. Now the President proposes what would really be a giant HMO, regulated by a federal bureaucracy determining the allowable benefits and payments.
Let’s see. We are being asked to take a problem and enlarge it: That will solve the problem, right?