June 22, 2018
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Don’t pin health care’s high costs on insurers

By Donald Howard, Special to the BDN

Almost daily, the Bangor Daily News publishes letters and guest columns outlining grand, intricate and complex solutions to a problem that is neither intricate nor complex. The biggest problem that most of these authors have is the inability to distinguish between health care costs and health insurance costs. They’re separate is-sues even though one can affect the other. However, it isn’t logical to say the 11 major health insurers are somehow responsible for the increasing costs of health care. They pay the claims. They don’t create them.

It is true that some companies offering individual plans have limited benefits that may not cover some health services and pay nothing on some tests and procedures. Most of these nongroup plans are issued by questionable companies that offer these plans for as low as $199 monthly for one person. Unrealistically low premiums should raise a flag. Yet, people are still buying them. Federal regulation requires basic, bold language to explain benefits and limitations. The simple advice: Read!

To solve the health care cost problem we first have to recognize and isolate the causes:

• People who lack the will to control their eating habits — the seriously obese.

• The noncontributors, who refuse to buy coverage because they intend to use the hospital emergency room for care and neglect to pay the bill.

• The unemployed.

• People with low incomes.

The Centers for Disease Control and Prevention says medical care related to obesity could cost the country $147 billion yearly, with most of the money spent on associated issues like diabetes, hypertension and cholesterol.

With nearly 10 percent unemployed, hundreds of thousands of people can no longer afford coverage and become reluctant noncontributors.

Many low-income workers who depend on their employers for insurance no longer have coverage because, due to high costs, many employers are forced to drop the benefit.

However, a phrase from the late President Ronald Reagan exposes the biggest problem. “Government is not the solution. Government is the problem.” In this case, it is governments both federal and state. On the federal end, there is Medicare and Medicaid. For those over age 65, Medicare pays only about 70 percent of the fee charged to those under 65, which providers are forced to accept. Private insurance pays the balance. Medicaid reimburses providers virtually whenever it likes. Two years is not unusual.

Up until March of this year, MaineCare owed Maine hospitals nearly $400 million. The Legislature and Gov. John Baldacci decided to make a payment of $163 million “within a few weeks.” The money would come from federal stimulus funds. The balance of $210,700,000 would be in the 2010 budget. The governor said, “This is a great day. This fulfills a promise to the hospitals to pay what was owed and help save jobs and create jobs.” Steve Michaud of the Maine Hospital Association said, “Most of the cash would pay all lines of credit that hospitals had to borrow to pay operating expenses. This would help to lower health care costs.”

Gov. Baldacci’s pitiful attempt to cover up the state’s shameful contribution to the health care cost problem by referring to the payment as an answer to unemployment was a gratuitous insult to the people of Maine. If the current balance is paid next year as promised, I hope there is humility rather than more deception.

If we concentrate on the real causes of the high cost of health care, we can solve the problem by concentrating on improving the economy by: putting people back to work and instituting “high risk pools” where the “uninsurable” can obtain coverage at a reasonable cost by spreading the risk among the major insurers. If health companies have a chance to calculate their risk, they can go a long way toward lowering premiums.

However, if we continue to blame the for-profit insurance companies, we should prepare for stifling taxes and socialism. Profit is not evil; profit is responsible for invention and the free enterprise system. Government-run health insurance is not the answer.

Donald Howard is a life and annuity insurance agent in Millinocket.

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