Damaged health care system wounds us all
The statement just came. It’s going to cost $153 per stitch. Six little stitches to my 11-year old daughter’s face on the Saturday before Easter Sunday has taught me one thing:
There are two kinds of uninsured families in the US of A – the uninsured uninsured and the insured uninsured. When critics of the U.S. system of health care delivery bemoan the fact that there are some 38.5 million uninsured Americans, they are talking about the uninsured uninsured. However, this excludes a large portion of America’s uninsured, namely, the insured uninsured. My daughter’s stitches taught me that our family is sewed up in this latter group.
First off, let me say that we are talking about those millions of American families that have insurance with a deductible amount. In our case, we have a $2,000 deductible policy. Because I am self-employed, we can only afford to pay approximately $5,000 per year for insurance premiums. We have the insurance to cover the catastrophic events. We willingly accept that the deductible portion is our financial responsibility. I have no problem paying for my daughter’s stitches. The deductible is what allows the insurance company to make “affordable” coverage available to us.
So let’s be clear. Suppose my family incurs $1,000 of medical expenses (I am rounding off the numbers for simplicity’s sake, but the percentages mentioned below accurately reflect the real numbers.). If we pay the bills out of our own pocket, and this amount is subtracted from our deductible, then I consider this to have been an “insured” medical expense. The policy is working the way it was intended to work. I agreed to this in order to have insurance at all. It does not matter that I pay the bill, because my insurance coverage is working as long as the insurance company acknowledges this medical expense and that amount is subtracted from the deductible for the year.
However, what if my family incurs $1,000 of medical expenses at an emergency room hundreds of miles away from home, and the insurance company recognizes only $200 of those medical expenses? This is basically what happened to my family.
How could this happen? Well, it seems to be generally true that all hospitals and doctors invariably charge more for a given procedure than insurance companies will recognize. In my admittedly limited experience, I have never seen it the other way around, namely, that the insurance company is willing to allow more for a procedure than the doctor actually bills. I doubt that I am alone in this observation.
Moreover, the hospital that my daughter went to (which was 45 minutes away from the cabin where she was spending her vacation) was a preferred hospital that had agreed to keep within the insurance company’s price guidelines, but the emergency room and/or the emergency room doctors (it is still unclear which) were not signed on to the insurance company’s preferred plan, and so felt free to charge more than the insurance company allows for those services. The insurance company does not recognize any of those expenses.
Obviously, this is a major issue between insurance companies and hospitals, but to me, it means that our family was uninsured for $800 of medical expenses we have to pay out of pocket. This is what I mean by the insured uninsured.
You can look at this situation in a variety of ways:
1. We are only 20-percent insured on our deductible. (In all the years we have had health insurance, we have exceeded the deductible only once.)
2. We will have to incur $10,000 of out-of- pocket medical expenses in order to meet our $2,000 deductible. (For illustrative purposes, I am keeping this simple. You can dream up much bigger numbers when you have two family members each requiring medical services close to but not exceeding the $2,000 deductible, etc.)
3. The battle between doctors and insurance companies over compensation for medical services is partially, but significantly, underwritten by the insured uninsured. We are the collateral damage of a nation that cannot agree on how to deliver health care.
I do not know what the national statistics are on the number of families having health insurance policies with deductibles. The Census Bureau says that there were 200 million Americans with private health insurance in the year 2000, but it says nothing about the number of insured with deductibles. I assume that the number is at least in the tens of millions.
When you multiply out even a few hundred dollars per year for these insured uninsured, you are talking about billions of dollars annually that the insurance companies can simply ignore and refuse to cover.
I am delighted and grateful that there are good health services available to stitch up my daughter’s wounds. Nonetheless, there is a jagged wound in the U.S. health care system that is still gaping open. What it is silently hemorrhaging is the hard-earned money of the insured uninsured.
Roger Rapp lives in Camptonville.
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