THOUGHTS ON SINGLE PAYER HEALTH INSURANCE
Richard Scheerer – Early in my work history, the manager of our personnel department came to me with a moral, ethical, and legal dilemma he was facing. Once a month, the president of the company directed this manager to provide him with a copy of the group medical claim report prepared by our plan administrator. From this report, the president could determine which employees or dependents had medical expenses and the severity of the condition involved. If the conditions had the potential of reoccurring costs, the president would indicate his dissatisfaction to the employee’s superior leading to the employee being terminated or better yet, being forced to resign without unemployment benefits. Even valued employees or company officers did not escape; they would be slowly stripped of responsibilities and would never again qualify for a raise or promotion. What makes this situation so reprehensible and eye opening is that this was an insurance company that sold personal health insurance policies.
This is no longer an isolated situation as employers today continue to eliminate employees for medical reasons to reduce health care costs. The “downsizing” craze of a few years ago was a way to get rid of older long term employees and the higher expenses associated with them – salaries, longer vacations, higher health care costs, higher pension contributions, etc.
I have spent most of my career as an officer of various insurance companies and finished my career as a reinsurance intermediary. My insurance colleagues may look disdainfully upon this writing, but I strongly believe that private health insurance can not, and will not, result in the greater good for our society. I have watched the health insurance industry completely change. At one time, probably 30% of all life insurance companies and a number of casualty companies sold medical insurance. Today we are down to a handful that sell individual medical plans; probably no more that five to ten in any one state including a few national marketers.
The employer group insurance choices are not much better. Although there are a limited number of insurance companies offering group health insurance plans, there are a number of insurance companies and non-insurance administrators that provide claim services for employer self-insurance plans. Self-insured plans have become the trend in recent years as another way to control costs. Even these plans need reinsurance for excess and catastrophic losses, but here again we are down to only a few reinsurers willing to offer such coverage. Have one or two large claims and lose a reinsurer, and your plan is in real trouble.
The real problem with our system of reliance on private insurance, whether individual, group or for that matter employer self-insurance plans, is that no plan wants to pay claims. The primary goal of any private company operating under our capitalistic system is to generate as much profit as possible; as a result, the structure of our private health insurance system operates against good public health policy. Care is not the goal; profit is. The welfare our society is not considered. Greatest profit occurs by charging high premium and eliminating or restricting claims. Underwriting, pre-existing condition clauses and terminations are used to eliminate potential claims by assuring only the healthiest receive coverage. With high deductibles, coinsurance percentages, pre-certification, coverage restricted to certain providers, most plans are designed to reduce claims costs to the insurer and transfer these costs directly to the insured. Additionally, it is becoming common for plans to limit one’s choice of providers and to limit treatment by requiring the provider have prior approval.
We spend 15% of our gross national product, basically twice that of most other developed countries, to insure 80-85% of our population. Are we getting twice the benefit? The answer appears to be no, as we have higher infant mortality, lower life expectancy, 50 million uninsured, and many more underinsured – the latter being the number one cause of bankruptcy. Since our system is not universal and public based, we are probably in the worst position of all developed countries to handle a epidemic or pandemic. Our employers are at a competitive disadvantage due to health care costs.
There are two insurance programs that are directly related to health care that also need discussion. First, almost all medical plans, group or individual, eliminate coverage for occupational accident and sickness. Employers are generally required to carry or furnish occupational sickness and accident coverage under mandatory worker’s compensation laws. The cost of mandated workers compensation alone exceeded the wages in many third world companies; a reason in itself for outsourcing.
The second insurance program not being discussed is medical payment coverage under automobile insurance policies. This should not be confused with liability coverage. Medical coverage is immediate and does not require the assessment of liability. This is duplication of costs, but not a duplication of benefits. Injuries can be collected on only one policy.
There is only one true reform that addresses all – universal single payer health. Anything other than universal single payer will simply be a costly government band-aid to continue a broken system that is destined to fail. A universal single payer system will cover everyone. It could eliminate the need and costs of medical coverage under worker’s compensation, and reduce auto insurance premiums by eliminating redundant medical coverage. Universal single payer health care is not a question of additional cost, but a reallocation of that which we already spend.
Richard Scheerer is President Intermediaries Plus
Article found in Excerpts From Reader Comments at UNDERNEWS