Editore"s Note
Tilting at Windmills

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July 3, 2008
By: Kevin Drum

UNDERINSURED....Ezra Klein reminds us that we don't merely have lots of people in the United States who lack health insurance completely, we also have lots of people who do have health insurance but don't have enough of it:

The Commonwealth Fund estimates that about 14 percent of the population was underinsured in 2007. That sounds about right, and it's a useful reminder that insurance isn't binary, wherein you have it or you don't. Rather, it exists on a continuum, with some folks being totally insured, some folks being half insured and half uninsured, some folks being totally uninsured but having access to emergency rooms, and so forth.

This is how American rationing actually manifests. Canada might have waiting times for non-essential treatments, but we have cost barriers to all manner of treatments. Some can't afford the care, and so they go into debt, or have to sell their home. Others can't afford the care, and so they never get it. We count that waiting time as zero rather than infinity, but that's just a bad faith numbers trick meant to make us feel better.

But a good faith effort to count real waiting time would conclude that lots of Americans have to wait a long time for medical care. And we can't have that, can we? After all, we have the best healthcare in the world.

Kevin Drum 11:05 AM Permalink | Trackbacks | Comments (13)

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I heard on Bill Moyers' program that 18,000 Americans die each year because of inadequate or non-existent medical care.

Posted by: lynn on July 3, 2008 at 11:13 AM | PERMALINK

Rather, it exists on a continuum, with some folks being totally insured, some folks being half insured and half uninsured, some folks being totally uninsured but having access to emergency rooms, and so forth.

How can Ezra ignore the category of people, per the Bush administration, who have too much insurance?

Posted by: RSA on July 3, 2008 at 11:31 AM | PERMALINK

I wouldn't necessarily consider myself underinsured, as the policy I have through my employer covers all the things one would expect a policy to cover. However, there has been a significant shift of risk to the employees over the years.

About three years ago my employer switched to a high-deductible plan because typical HMO plans were no longer affordable. The plan is complicated, but the gist of it is my out-of-pocket maximum went from $1250/yr (based solely on copays) to $3000.

It would take a hell of a lot of procedures, prescriptions and office visits for $25 copays to add up to $1250, ergo your chances of ever hitting the maximum was small under the old plan. However, of the $3000, I am liable 100% for the first $1500. 80/20 co-insurance, also subject to co-pays, doesn't kick in until $1501. So, if I have medical expenses greater than about $9000 in any given year, I'll be paying the full $3000 out of pocket. And yes, this is all in addition to the premium. If I had a family plan the out-of-pocket max would be $6000/yr.

So, let's say I had a family plan. I know I'm likely to have some expenses every year, so maybe I expect to pay $1000/yr out-of-pocket. Yet, if someone gets sick or injured I'm quickly on the hook for another few thousand dollars. Now, if you have insurance but still can't predict your costs within $5000 for any given year that is failing the basic concept of insuring against risk.

Considering that the median family gross income is under $50K it's not surprising that nominally insured people still get crushed by medical bills. Even middle class families who have property and assets don't often have $5000 in cash savings to pay unexpected expenses.

Posted by: Joe Bob on July 3, 2008 at 11:45 AM | PERMALINK

Five years ago my spouse had to spend 28 days in hospital (25 days without food by mouth), which happened right after I was laid off. Fortunately my spouse was employed and had an excellent health insurance plan that paid 100% of her hospital stay. Several years earlier my spouse had surgery and a hospital stay of a couple of days and was covered under my employer's insurance plan; it cost us several thousands of dollars out of pocket. Had my spouse been covered under the old plan, that long stay in hospital would have cost us well over $50,000, a debt that most Americans could not afford.

One reason why hospital stays are so expensive is that hospitals have become like resort hotels. The hospital my spouse spent so much time in only has single rooms. I went to a seminar at a Mayo Clinic, which was open to the public, and not only was treated to a free lunch, but it felt like I was at a four star resort. Large screen LCD TV's were everywhere, broadcasting Mayo propaganda, the conference room had a state of the art video production center and the art installations were exquisite. The medical industry generates income like a chemo patient does diarrhea, and they spend it lavishly for lurxury amenities instead of investments in medical infrastructure to provide more health care to more people at a lower cost.

Posted by: Brojo on July 3, 2008 at 12:36 PM | PERMALINK

Where is this 14% are underinsured come in. Almosy anyone with any commercially bought plan (usually employer provided) could have a serious condition that the plan doesn't cover. Even if it is covered, they will find plenty of things on the bill, that they will refuse to pay (or will pay only a fraction of the billed amount). Almost everyone in this country is either underinsured, or uninsured.

Posted by: bigTom on July 3, 2008 at 12:48 PM | PERMALINK

Politically speaking, the only thing that matters is that the most sought out segment of the electorate; wealthy and middle class retirees (in other words, Medicare recipients) face less waiting and rationing than any large demographic anywhere on earth. Any reform Kevin favors will inevitably mean more waiting and rationing for people whose votes are the most competed for, and who have been trained for 4-plus decades, by the Democratic Party, and to a lesser extent, the Republican Party, that long waiting times and other forms of rationing are mostly for other people. Thus there will be very little in the way of significant reform, because all the other interest groups which oppose such reform, from insurance companies to doctors to pharmaceutical companies, any anyone else, will make sure that this segment of the population will be well educated as to how such reform will put them on the same plane as the rest of the electorate.

Posted by: Will Allen on July 3, 2008 at 1:39 PM | PERMALINK

I would consider the Mayo Clinic a significant outlier. There aren't many private non-profit hospital/clinic systems sitting on a $4billion endowment.

Posted by: Joe Bob on July 3, 2008 at 1:47 PM | PERMALINK

Kevin: "we also have lots of people who do have health insurance but don't have enough of it"

I'd phrase that differently. We have people with insurance or HMOs that think they are covered, well or minimally. But whatever coverage they may /think/ they have, they really have no real assurance whatsoever of what coverage, if any, they will get when they have an accident, fall ill, etc.

The insurance companies and HMOs primary devotion is to profit, not service, and they will deny/limit coverage, deny diagnosis or treatment, etc, etc.
You have a contract with the vaguest performance guarantees and no recourse. You think you have some level of protection/coverage; you do not.

Example: I have had chronic Lyme Disease. The insurance companies, not surprisingly, have taken the stance, as have some doctors, that a simple 3 week course of doxycycline will cure all Lyme Disease, and that is the end of their responsibility. If you have chronic Lyme that doesn't respond, you are out of luck and considerably out of pocket...to say nothing of being deathly ill and getting worse. Oh, and then the insurance comapnies will witch-hunt the doctors that /will/ treat you.
Profit is king.

Posted by: Stewart Dean on July 3, 2008 at 2:13 PM | PERMALINK

Can we PLEASE be spared reference to waiting lists for non-essential procedures?! Have you ever tried to find a primary care physician under the American system or get an appointment with a specialist??? Waiting times of 18 months are not at all unusual in my area and I live less than an hour drive from Boston, arguably the capital of the medical world. I can only imagine what wait times people in rural areas must have to endure!

Americans pay top dollar for health insurance, face lengthy waiting times, denial of benefits by insurers AND receive sub-standard care when compared to health care outcomes in other systems.

Canadians - and Canadian employers - enjoy universal health insurance paid for by (progressive) taxes and face wait times for non-essential procedures no longer than Americans do and in many cases briefer.

Posted by: Chesire11 on July 3, 2008 at 2:37 PM | PERMALINK

We not only have the best health care in the world, we have the best of everything. Because We ARE the BEST!

(USA, USA)

We have the best Chinese food in the world (tho Pat Nixon said that the best Chinese food she ever had was in China. Traitor!)

We have the best champagne (oops, sparkling wine) in the world.

We have the best TV in the world.

We have the best broadband in the world (just not very much of it).

We have the best cars in the world (tho they come from Japan and/or Germany).

We have the best baseball in the world.

We have the best economy in the world (no one else can trickle down like we can).

You name it, we got the best in the world.

Cuz NO ONE is better at ANYTHING than we are.

And if you don't agree, you are a traitor.

Posted by: Cal Gal on July 4, 2008 at 1:49 AM | PERMALINK


People in the U.S. propagate the "We're the greatest country in the world" meme because it let's them avoid getting informed, taking action, and working to improve their country.

Why do we need to improve health care, the environment, employment, etc. -- we're already the best country in the world!

Killing that meme is going to take even higher levels of poverty, homelessness, hunger, disease and death. And here it all comes!

Posted by: Cassandra on July 4, 2008 at 2:14 AM | PERMALINK

Even if you have what is considered really good insurance (subsidized corporate retiree policy in my case and Medicare in my wife's), and are basically healthy, the carrying costs of this insurance can easily run $10,000-12,000 per year per family. Premiums, copays, Medigap, etc. all add up to what is a huge fraction of a typical American family income.

Posted by: bob h on July 4, 2008 at 5:54 AM | PERMALINK

Toyota decided to build their newest plant in Canada in spite of extreme efforts by many cities and states in the US. Their primary reason for the decision was that Canada offered health care to it's citizens which amounted to a huge savings over any location in the US. They chose not to be a health care provider that made cars on the side like GM and Ford domestic plants that spend more on health care than for steel. This makes it a bit hard to sell single payer health care as "too expensive" for America. It would seem that it has become "too expensive" to continue to enable the status quo of corporate insurance profiteering at the expense of the sick and poor.

Posted by: Keith on July 6, 2008 at 11:55 PM | PERMALINK




 

 

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