You Do Not Have Health Insurance
by: James Kwak
The Baseline Scenario: August 5, 2009
Right now, it appears that the biggest barrier to health care reform is
people who think that it will hurt them. According to a New York Times poll,
"69 percent of respondents in the poll said they were concerned that the
quality of their own care would decline if the government created a program
that covers everyone." Since most Americans currently have health insurance,
they see reform as a poverty program - something that helps poor people and
hurts them. If that's what you think, then this post is for you.
You do not have health insurance. Let me repeat that. You do not have
health insurance. (Unless you are over 65, in which case you do have health
insurance. I'll come back to that later.)
The point of insurance is to protect you against unlikely but damaging
events. You are generally happy to pay premiums in all the years that
nothing goes wrong (your house doesn't burn down), because in exchange your
insurer promises to be there in the one year that things do go wrong (your
house burns down). That's why, when shopping for insurance, you are supposed
to look for a company that is financially sound - so they will be there when
you need them.
If, like most people, your health coverage is through your employer or
your spouse's employer, that is not what you have. At some point in the
future, you will get sick and need expensive health care. What are some of
the things that could happen between now and then?
a.. Your company could drop its health plan. According to the U.S. Census
Bureau (see Table HIA-1), the percentage of the population covered by
employer-based health insurance has fallen every year since 2000, from 64.2%
to 59.3%. *
a.. You could lose your job. I don't think I need to tell anyone what the
unemployment rate is these days.**
a.. You could voluntarily leave your job, for example because you have to
move to take care of an elderly relative.
a.. You could get divorced from the spouse you depend on for health
coverage.
For all of these reasons, you can't count on your health insurer being
there when you need it. That's not insurance; that's employer-subsidized
health care for the duration of your employment.
Once you lose your employer-based coverage, for whatever reason, you're
in the individual market, where, you may be surprised to find, you have no
right to affordable health insurance. An insurer can refuse to insure you or
can charge you a premium you can't afford because of your medical history.
That's the way a free market works: an insurer would be crazy to charge you
less than the expected cost of your medical care (unless they can make it up
on their healthy customers, which they can't in the individual market).
In honor of the financial crisis, let's also point out that all of these
risks are correlated: being sick increases your chances of losing your job
(and, probably, getting divorced); losing your job reduces your ability to
afford health insurance, either through COBRA or in the individual market;
if your employer drops its health plan, that's either because health care is
getting more expensive (meaning harder for you to afford individually) or
the economy is in bad shape (making it harder for you to get a job that does
offer health coverage).
In addition, there is the problem that even if you are nominally covered
when you do get sick, your insurer could rescind your policy, or you may
find out, as Karen Tumulty's brother did, that your insurance doesn't cover
the treatment you need. But while important, this is a second-order problem.
The first-order problem is that as long as your health insurance depends on
your job, your health is only insured insofar as your job is insured - and
your job isn't insured.
The basic solution is very simple. In Paul Krugman's words: "regulation
of insurers, so that they can't cherry-pick only the healthy, and subsidies,
so that all Americans can afford insurance." I know that there are lots of
details that consume people who know health care better than I do, and I
know those details are important. But as an individual who is worried about
his or her own health insurance (and that is the point of this post), that's
what you want. You want to know that if you lose your job, you won't be shut
out because you're too sick,*** and you won't be shut out because you're too
poor.
But we won't get there as long as people remain convinced that health
care reform is for poor people. It's for everyone - everyone, that is, who
isn't independently wealthy or over the age of 65. Because all of us could
lose our jobs. (Have I repeated that point enough?)
Now, I admit that if you are over 65, health care reform is not for you,
because you are in the one group in our society that enjoys true health
insurance - insurance that you cannot lose, that is paid for by taxes, and
that is effectively guaranteed by the government. So maybe there's nothing
in it for you, except perhaps an improvement to the prescription drug
component of Medicare. But I cannot believe that, as the only people who
have reliable health insurance, you would oppose health care reform that
would provide reliable insurance for the rest of us.
* This doesn't necessarily mean that all those people lost
employer-based health coverage because their employers dropped their plans;
some of it could be that the employee contributions were increased to the
point where they couldn't afford it anymore. 1.1 percentage points of the
shift is due to people becoming eligible for Medicare or military health
plans.
** If you lose your job, or you get divorced from a spouse through whom
you get health coverage, you are eligible for continued coverage under
COBRA. However: (a) this only necessarily applies if your employer has 20 or
more employees; (b) you have to pay the full, unsubsidized cost of your
health plan, which can be particularly difficult after losing your job; and
(c) it only lasts for eighteen months.
*** I said earlier that insurers can't charge premiums that are less
than the expected cost of your care unless they can make it up on the
healthy customers, and they can't in the individual market. But if all
insurers are prohibited from doing medical underwriting (pricing based on
healthiness), then they will all have to overcharge the healthy customers,
and the system could work. This is still a tricky issue - and single-payer
(like Medicare) would be much simpler - but it can be made to work even in a
competitive market.
Update: A couple of small things. and one big thing:
First, I called rescission a "second-order" problem, which was probably
surprising, given that my post on it got over 100,000 page views (thanks to
the Huffington Post). I meant "second-order" not to mean that it isn't
important, but that it is logically subsequent to the question of whether
you have health insurance in the first place, and this post is about whether
you can count on having health insurance in the first place.
Second, J.D. points out in the comments that there is a problem with
COBRA I didn't mention: If you relocate to an area where your employer
doesn't have a plan, then you can't count on it at all.
Third, a few people said that it was the fault of the administration (or
the Democrats generally) that health care reform is framed as a "poverty
program." There's something to that point, but I don't think it's quite
right (and I didn't put it right in the first paragraph above). I think it
is a poverty program - but the vast majority of us are, actually, poor. The
combination of job loss and serious illness could wipe out almost anyone
(under the age of 65 - actually, anyone over 65 as well, since Medicare
doesn't cover extended nursing home care), and we all suffer serious
economic insecurity because of it. The political problem is that the median
American doesn't identify as poor (although he probably thinks he needs more
money) and thinks that poverty programs are for "other people." I think that
middle-class and upper-class people should support poverty programs for
other people, but that's an unnecessary discussion. My point here is that
the vast majority of us are poor, when it comes to health care, and
therefore we should get behind reform out of self-interest.
***
From: naomi browar
Sent: Sunday, August 09, 2009 12:09 PM
Subject: turning into a fascist country: take action!
Jam those phone lines, writes letters, send Durbin's internet server
crashing- write write write-demonstrate-go to town meetings- they're
waiting to hear from us.......the letter below isn't great but it's the best
I could do now- I just couldn't sit by any longer while the Republicans
laugh there way back into the majority.....
N
Dear Senator Durbin:
As a clinical social worker who visits senior citizens in their homes, a
mother of 3 children, with a husband who is a therapist and professor, I am
appalled at the lack of moral integrity shown by the party I have voted for
my entire life. I just read in the Huffington Post that you are now wavering
also, on the public option. We are watching Obama's presidency and all his
minions and all his promises turn from strength to weakness as he caves into
money...that is what it boils down to....money.
As a social worker, I understand that sometimes I am negotiator and
sometimes I take sides and advocate for my client. I also understand that
as a citizen I am able to understand the difference between my professional
and private life. There are times, I must make a decision and be partisan.
Trying to be bipartisan, is ridiculous. Metaphorically speaking, community
organizing is fine when the opposition isn't using guns and when there
aren't millions of people dying, mentally and/or physically, from health
care related issues. The opposition will stop at nothing to get what they
want or don't want, based on ignorance, fear and greed.
You have a responsibility to the American people to help them, and not place
obstacles in front of every move we make.
My relatives in Switzerland and friends in France, who are middle class,
laugh at us...they say Americans live to work, and when they work, it is in
stress and anxiety (the average case load for a social worker in a non
profit agency is between 70 and 100 people)!! My salary is $40,000 a year
and I pay $1,000 a month for health insurance. I called four gynecologists
and dermatologists to schedule a regular check up and each was a 3-month
wait. These are minor issues compared to what millions have gone through,
so AETNA and CIGNA CEO's can have their 4 mansions and private jets! It's
disgusting- how can you let this happen? And you do let it happen if you
vote against single payer or a strong public option. It is plain murder.
The conservative right wing has funded organizers to go out and silence
debate, and cast fear into every politician and citizen. They have used
swastika's and painted Obama as Hitler. In psychological terms this is a
projection. They are the fascists. And you politicians are the "good
Germans" who remain silent, cave in and state "we were just following
orders."
Please do not cave in. Find the courage and do the job you were elected to
do in a supposedly "democratic" country.
Yours truly,
Naomi Browar
No comments:
Post a Comment