More on Massachusetts Health Insurance

I loved this email received at Maggie's Farm:

What are you guys smoking over there? Here I am in Massachusetts,
without health insurance, and with a family of four, and all that has
happened is on top of having to pay full freight for my family's doctor
bills, I get fined $1000.00 for the privelege.

I don't want
your stinking welfare greenstamp department of motor vehicle government
cheese copay paperwork foodstamp prepaid doctor tax charity ward let a
million flowers bloom supervision of my family's medical situation,
thank you very much.

Catastrophic medical insurance is
currently illegal in Massachusetts. All they had to do is allow me to
purchase what I could get if I lived 50 miles west, which is REAL LIVE
INSURANCE, that is, they would pay if something unexpected,
substantial, and expensive happened. And it would cost me a couple
hundred bucks a month. But no, I have to pay full freight for every
lamebrain thing that every knucklehead who has a job with benefits
wants tax free, like gym memberships and aromatherapy and acupuncture
and reiki massage and "mental health," ie, I'm a miserable failure as a
human being and I want to talk to another miserable failure that went
to community college for psychology about it, at great expense. Oh,
yes, let's not forget all middle age men that need free blue pills
because what a mean spirited thing it would be [if] middle age men didn't
wander the earth with extra free hardons.

And so "insurance"
becomes paying in advance for others to get what they don't need or
deserve, to the point where "Insurance" costs 1200 a month and if
something catastrophic did happen, would bankrupt me anyway, because
instead of paying $50 for an office visit for an imaginary ailment, but
having a real catastrophe paid for, the powers that be would prefer
paying $5 dollars copay for an office visit to their yogurt enema
wellness healer, but have to chip in 20% for cancer therapy, which
would bankrupt anybody that has to worry about the cost of health
insurance in the first place.

ROFL. I too am a big believer in catastrophic health insurance.  My home insurance does not cover broken light bulbs and leaky plumbing.  My car insurance does not cover air filters.  Why does my health insurance have to cover routine stuff?  I pay for my own health care and this is exactly how my family handles both dental and medical:  We pay regular visits but have catastrophic coverage for major health breakdowns. 

Jeez, I wish I had written that email and could take credit for it.  The blog does not reveal the emailer's identity, but whoever you are you're welcome to guest blog here any time.

Update: About a year ago, my family of four was quoted about $650 a month for the type of full (not catastrophic) medical insurance that the state of Mass. is requiring.  This is about $8000 a year.  This strikes me as by far the most expensive item that any US government has required its citizens to purchase, and given the average GDP of most nations, may be the most expensive item any government in history has required all of its citizens to purchase.  Up to this point, many municipalities have shied away from requiring purchase of $40 smoke detectors.  The only thing that is even within an order of magnitude of this is perhaps car insurance, but even car insurance is not required of every citizen, just the ones with cars (don't laugh, if car insurance laws followed the same logic as this health insurance bill, not having a car would not be a legal excuse for not having auto insurance.)

Update 2:  I am sure I will get the response, "but the supporters promise that the bill will halve the cost of private health insurance.  Right.  Here is a clue:  Except for the reform plan in California pushed by Gov. Arnold, every single state attempt to "reform" workers comp. has resulted in my premiums going up.  I am sure we are all holding our breath for the price drop in passenger rail service and first class mail. 

This plan removes the last people from the market who are price sensitive shoppers of individual medical services (i.e. those who pay expenses out of pocket rather than having them covered by medical insurance).  If you drive down the marginal cost to all consumers to the level of the copay from the much higher true-cost of the procedure, then you are going to get a lot more use of all medical procedures.  Higher use = higher cost.  Higher cost = higher premiums, even when spread over more people.

I am constantly stunned that this concept has to be explained to people.  Let's consider a test that costs $1000 to administer that can detect a very rare type of cancer that only occurs in 1 in 100,000 people.  Well, if they charged you anywhere near the $1000 cost, few people would choose to pay for a test to identify something so low-risk.  But if you could take the test for a $20 copay?  Sure doc, let's do it!  So the insurance pool has to fork over $1000 for a procedure that you might only value at $20.   Also see this post for more along the same lines.  And here too.

  • http://unrepentantindividual.com/ Brad Warbiany

    Warren,

    On your example of the cancer detection test, let's be fair. Let's say that it can be covered by insurance for a $20 copay. You can be sure that the insurance companies are only paying $350 for that $1000 test. If you're uninsured and you try to get the same test, though, the hospital will charge you $4000 for it.

    Of course, governmental policies make it nearly impossible for individuals to obtain health insurance at reasonable rates, so they're exacerbating the problem. But the insurance companies are able to contract lower-than-market rates for certain procedures as a group, and the hospitals make up the difference on the uninsured (or the government, sometimes)...

  • Ken L.

    Along these lines, I think you'd enjoy reading here about the medicare maze:
    http://docisinblog.com/archives/2006/04/01/maze-pt-1

  • http://accidentalverbosity.com Jay

    Indeed. I pay $738 a month in MA, spend an additional few grand a year out of pocket, and that will be even more when we ever decide the cash is there for the needed dentistry.

  • Don Lloyd

    "...Catastrophic medical insurance is currently illegal in Massachusetts...."

    But this wouldn't solve the problem either because, as alluded to above, providers are forced to raise their prices to the uninsured so that they can stay in business accepting the 50 to 90% discounts that the insurers insist on. A system that forces pre-discount prescription drug prices well above those that a monopoly supplier would charge in a free market is broken.

    Regards, Don

  • http://en.wikipedia.org/wiki/User:Morven Matthew Brown

    Agreed with Don; it's ridiculous that the system is set up so that you're utterly screwed if you don't have prescription drug coverage (or indeed other insurance coverage) because you are billed so much more than the insurance companies.

    So, effectively, one has to have health insurance.

    Somehow, in my view, the US has managed to end up with the worst of all worlds in healthcare; it's expensive, inefficient, effectively unavailable to too many people, and not all that great in terms of quality of service either.

    Even socialised medicine would be better, scarily enough. Having grown up in a country (England) with socialised medicine, I know all too well its downsides, but the current US system does not seem to be any better - just badly done in a different way.

  • Shane

    Maybe things are different here in middle America, but I have found that paying cash for medical treatment has been significantly less than buying insurance.

    In fact, I paid cash for the birth of both of my children, mainly based on the fact that an honest agent told us we'd spend less by saving and paying in cash as opposed to paying the maternity rider premiums. When I registered with the hospital, I signed a contract where I received 35% off their 'billed' rates if I gave them a check within 30 days after discharge.

    I have done the same with dental work as well. I told them I was 'private pay' and would right them a check for services rendered if they could cut me a deal. I had to call a couple different offices, but I easily found one that would deal. It must be that the quick cash in hand is so much better than the beaurocracy of payment from insurance.

    On topic, I'm glad I don't live in Mass. Wow.

  • http://carnalreason.org pwyll

    I have to agree, that email was brilliant. Get that dude a blog.

  • http://www.test-mall.com/herbal/ Herbal girl

    That was good mathematics, but what if it really cost that much? It's work of people and they'd ruther do one for 1000$ then 50 times for 20$.