Comments on: Driving a Point about Health Care Reform

By: Craig

Craig — Fri, 17 Feb 2012 16:29:58 +0000

I’d much rather have the choice between a cheaper and a safer car, with appropriate insurance (except liability) limitations. My choice is my risk.

By: Ken

Ken — Wed, 18 Aug 2010 02:32:50 +0000

Video gone – TOS violation.

By: Mark

Mark — Sun, 21 Feb 2010 09:54:19 +0000

Damn, that’s the coolest car ever!

By: Bruce

Bruce — Mon, 28 Sep 2009 05:14:18 +0000

Health insurance isn’t like other consumer purchases. About 60% of Americans are covered by insurance provided by their employer. About 40% of group health is self-insured, with the insurance company acting as administrator by processing payments and managing provider networks. The real customer for health insurance is the employer, not the employee. A generous employer may offer two or three plans (HMO, preferred provider network, etc.). The choice the consumer has is based on what the employer offers as benefits. Less than 9% of the health insurance market are individual policies.

The overriding determining factor in choosing a health plan (by employers and by consumers) is premium price, and to a lesser degree the provider network. Rarely do health insurance companies tout the speed of claims processing, customer satisfaction or other competitive factors. It’s all about the price. And for good reason, since premiums are increasing about 20% annually. Health care costs have doubled since 2000, and are expected to double again within 10 years. So money is very, very important.

As with the auto companies, nothing prevents a health insurer from being a good corporate citizen and doing the right thing. At any time, any health insurer could break away from the pack and announce that they will no longer exclude pre-existing conditions or engage in rescission — the practice of dropping people when they get sick. The company that does this will have to raise its premiums by necessity and put itself at a severe competitive disadvantage. I just don’t see companies and consumers flocking to a health insurer that acts morally and ethically, but is more expensive. When the chief executives of three large health insurers testified before Congress last June, each one of them refused to voluntarily commit to ceasing rescission (http://tinyurl.com/yaenwtj).

Government regulation is needed when there is no financial or other incentive for a corporation to do the right thing. A corporation won’t be browbeaten into cleaning up its emissions or ceasing deceptive advertising, for example. Imposing basic ground rules that apply to all insurers, prohibiting exclusions and rescission, etc., levels the playing field and allows companies to compete on price. In short, this is one of those things that health insurers won’t do on their own. Occasionally, some things have to be forced because it’s the right thing to do.

By: david kadow

david kadow — Sun, 27 Sep 2009 19:10:21 +0000

Bruce. Great correlation here. The tipping point being when “a” company realizes and markets the value of compliance relative to its peers. Once that point is attained, then it becomes a horse-race for all companies in the market to out-do each other in “quality of compliance”. That’s the point at which we consumers start seeing real benefit.
I think such tipping points would come sooner in our various regulated or semi-regulated markets if customers had a greater attention span, and if they actually sought out contrary assessments to their own, in order to make informed decisions and to apply pressure to manufacturers. Instead it seems that most folks fall for the meme, and simply parrot this sound-byte rather than digging-in to research the truth behind the bytes. In the case of our current Health Care debate, those who love Glen Beck only parrot his spew. And the same is true on “our side”…we all would benefit from deeper exploration of positions opposite our own, and exploration of facts rather than marketing. But since there are only so many hours in the day, we consumers rely on responsible journalism to cut through the weeds and reveal the truths. And finding sources for that can be a bit of a chore too.