Obama, save us from BlueCross BlueShield of Oregon

The debate over how to fix our country's broken health care system can get pretty darn abstract and complex. But last night my wife and I had a hands-on experience of what's wrong with private medical insurance.

And it made us ever so eager to escape from the clutches of Regence BlueCross BlueShield of Oregon, which is our increasingly costly insurance provider.

After Regence's 40% premium increase on our individual plan over the past two years, we decided to look for a way to get more health care bang for our bucks.

Laurel has a friend, Christy, who is an insurance agent. She said we should look into changing from Blue Selections Plus to Blue Selections Premier, and consider altering our deductible.

First, though, it was necessary to make a big pot of coffee, pray to the health insurance gods, and hope that a mixture of caffeine and supernatural guidance would enable us to decipher the differences between Plus and Premier.

Remember: we were exploring private sector options, not the Obama "socialized medicine" that right-wingers are claiming will ruin the world's best health care system.

Well, after a few hours of trying to navigate Regence's private sector maze, we were damn ready to embrace anything other than the insurance we have now -- if that turns out to be a public plan such as the one members of Congress have, great.

If someone wants to call it socialized medicine, go right ahead. It can't be worse than the horribly confusing and unfair health insurance system we have now.

I worked for ten years in health services research and planning. Laurel was a psychotherapist in private practice for about the same length of time. We know a lot about health insurance.

And we both were scratching our heads last night, trying to weigh the pros and cons of deductibles, copays, annual limits on coverage for certain services, annual coinsurance maximums, plus other arcane (yet important) factors that must confuse most other people even more than they did us.

I kept thinking...

"Come on! Why can't this country simply have an insurance plan that meets the needs of almost everybody? Like how the postal service operates. It does a fine job delivering our mail. And it's a government program. If I want extra service, I can head to Federal Express. But by and large the USPS provides a great product -- for everybody."

After phoning Christy and getting some advice on the best deductible for us, we decided that it made sense to switch to the Premier $2,500 deductible plan, from our current Plus $1,000 deductible.

OK. Optimistic me actually thought that maybe I could just call Regence, talk to someone, and have our contract easily changed from Plus to Premier.

Yeah, right.

As if anything is easy with health insurance these days. Which reminds me: the Regence web site, for some utterly understandable reason, doesn't include "plethora of inefficient private plans" among its reasons for rising health care costs.

A 2005 Science Daily story says:

Billing and insurance paperwork consume at least one out of every five dollars of private insurance health spending in California, according to a new study by health policy researchers.

I can believe it, given how much time we spent last night filling out an application for a Premier contract. Because even though we've been Regence customers for many years, I was told that switching to a different plan entailed applying for coverage just as someone new would have to.

I didn't think the online form would be fun to complete. However, I had no idea that it would be as time-consuming and frustrating as it was.

Whoever designed this monstrosity of a questionnaire probably never filled it out himself or herself. If he or she had, the ridiculousness of asking the same question over and over in different ways would have been obvious.

Yes, one of us had moderately high cholesterol at one point (me). I dutifully check that health problem as I move down a lengthy list of diagnoses, symptoms, and such we've experienced the past five years that Regence wants to know about.

Then the form demands more details. I explain that I was prescribed a low dose statin and my cholesterol is much lower now. Regence wants to know the name, address, and phone number of the doctor who wrote the prescription. I provide it.

Later, after Laurel and I have been working on completing the application for 90 minutes or so, page 967 (roughly speaking) of the form asks for a list of prescription drugs we're currently taking.

"We already told about those in the problem areas," Laurel said. No matter. The online application must be obeyed. We spend more time re-typing in the same info we'd already provided. Now I understand how staff in doctor's offices and hospital billing must feel:

Wanting to strangle the private health insurance bureaucrats who come between patients and their health care providers.

I can't understand how the conservative blowhards I hear on talk radio/TV manage to say, "Americans don't want the government interfering with their current health insurance coverage."

Yes we do!  Please, please, government! Step in and interfere! 

Just save me from ever having to fill out another private health insurance contract application like the one we worked on last night. It was insane, because the clear purpose behind most of the questions was to learn whether we -- gasp! -- might have some health problems.

Gosh, Regence, you got us.

You're right. Laurel and I want health insurance because we're not always healthy. I know that you and other health insurance providers would prefer that your customers never got any medical care, because then you'd make more money.

And there are plenty of horror stories about people being denied coverage by private insurers because they failed to dot some "i" or cross some "t" on a form. So we did our best to be as complete and accurate as possible in filling out the damnably long and complex Premier contract application.

Throughout the process, though, I was struck by how absurd the whole notion was of grilling us about the health problems we have so some Regence employee can decide whether we have too great a need for health insurance.

Then Regence could deny an application for health insurance, because the applicants need health care. Um, don't people need a way of paying for health care because they have health problems?

There's something desperately screwed-up with American medical care. That came home to us last night, even though we already knew it.

Expecting private health insurance plans to be the centerpiece of reforms, given that they are a huge part of the problem, isn't reasonable. This country needs a public option. Bad!

For all their paeans to the power of private enterprise, we know that private insurers simply can't compete with the government, because they offer an inferior service at higher prices. We know this because of the example of Medicare, which operates more efficiently than private insurance (Medicare spends only around 2 percent of its costs on overhead, a fraction of what private plans do) and gets higher satisfaction ratings.

Oh, I can believe it. After suffering through the Regence Premier application form last night, I can sure believe it.

Comments

[Rain]

I want the public options because without that this plan will become an economic bonanza for insurance companies. The dems seem weak on doing it though. Don't kid yourself that it will be the blue plate special the Congress has and it won't be simple probably either. We had an HMO for years through corporate insurance plans and then came Medicare sign-up. ACK! I think of myself as intelligent person but it was so confusing. It's not just Medicare but the drug plan or a supplemental to cover the drugs. You have many plans to pick between and if you go with Part D of Medicare, you have a doughnut hole which may or may not be something that impacts you but each year it'd be different. If you choose supplementals, you have to pick through which one. Then you pay for them separately. It was not simple to say the least. So far it's been okay after almost a year, but I still remember pouring over the different concepts we had to pick between and trying to understand it all. So long as insurance companies are involved, and they are for most people who go onto Medicare as some doctors won't even take Medicare patients, it won't be easy.

[condor]

It is unarguable that the healthcare system is a mess but I don't agree with Brian's 'logic'...

"If someone wants to call it socialized medicine, go right ahead. It can't be worse than the horribly confusing and unfair health insurance system we have now."

Yes it can by prolonging and deepening the recession.

The chickens that were hatched in the stimulus package are coming home to roost in the healthcare proposal. The budget deficit Obama racked up paying for the massive federal spending passed in January is now having a real economic and political impact, which is forcing the president and his congressional allies into hard choices as they face his healthcare legislation.

Of course, the prudent thing to do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House can’t do that. He’s got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program. His demand may be a bridge too far, endangering his popularity with the American people.

First of all, the very fact of a focus on healthcare reform inevitably stirs discussion of the deficit. Americans are allergic to deficit spending and worry the more the deficit grows. As interest rates rise and the government finds it more and more difficult to borrow enough to cover Obama’s massive spending, the economy is likely to show the negative effects. It is a matter of a few months, certainly no more, before voters start to realize that it is the deficit, not the pre-existing conditions Obama inherited, which is causing the prolongation of the recession. Obama's approval ratings have dropped to 56% and this may look good compared to what they might be months down the road.

Already the jump in mortgage rates has slowed the refinancing, which was the only aspect of the Obama economic program that was working well.

But the foreign and domestic focus on the deficit has a harsher political impact: It forces the Democrats to come up with money to fund healthcare reform. In other words, it makes them raise taxes. The Democratic Party is good at fooling itself that tax increases don’t matter and are politically palatable, but they do and they are not.

The massive spending healthcare will require dwarfs the capacity for the rich alone to pay the bill, no matter how confiscatory Obama chooses to become. Only broader taxes will do the job. Obama faces two practical choices: a value added tax or taxing health insurance benefits.

The political harm either way will be enormous. Not only will Obama be breaking his pledge not to tax the middle class, but he will be doing so in a particularly pernicious way. If Obama opts for the value added tax (VAT), Democrats will hope to cloak the increase in the price of the product. They reason that the consumer won’t know how much the tax is since it will be added on throughout the sale and resale of the product rather than at the cash register at the end, as the sales tax is.

But it will work the other way. As inflation sets in, triggered by Obama’s deficit spending, consumers will blame the whole thing on Obama. His VAT will be much magnified in the voters’ minds to include all of the inflation going on. Just as voters blamed Clinton’s gas tax increase of five cents in 1993 for the entire run-up in gasoline prices at the pump, so they will place all the blame for inflation on Obama’s VAT.

Or Obama could tax healthcare benefits, a direct reversal of his campaign pledge. He would be adopting a policy for which he overtly and loudly criticized McCain. And his popularity will wilt as taxpayers suddenly have to add onto their tax liability the money their employer has always paid for their health insurance.

Obama will probably have his own separate line on the 1040 and even on the short form for his new tax. That’s not the way to stay popular.

Obama’s only good option is not to move so quickly on healthcare reform, to give himself some wiggle room. But as the song says, “we’re knee deep in the big muddy but the damn fool says to push on!”

President George H.W. Bush lost the presidency because he broke his 1988 campaign pledge: “read my lips: no new taxes.” Now President Obama is as blatantly poised to disregard his most fundamental campaign promise: “if you make less than $250,000 your taxes will not go up. Not one dime.”

To pay for his health care program, Obama will likely make all health insurance premiums, paid by employers, taxable to the employees. So if your income is $50,000 and your employer pays $10,000 in health insurance premiums for you, your taxable income will be $50,000.

In effect, this means that most taxpayers will have to pay more than a third of their incomes to the federal government.

And Obama’s “cap and trade” legislation is the exact same as Al Gore’s BTU tax which was the centerpiece of Clinton’s 1993 tax program. Eventually, Clinton replaced it with a flat 5 cent gasoline tax. But the idea of taxing utility bills to drive down electricity use is as old as the Clinton Administration. But Obama can’t call it a tax because that would break his pledge. So he calls it cap and trade instead.

Finally, it is obvious that Obama will be unable to restore financial solvency to Social Security and Medicare without big hikes in the payroll tax, coming in 2011!

It is ultimately these tax increases which will drive Obama’s congressional majority from office in the 2010 elections. His stimulus package, raising the deficit damaged the recovery by raising interest rates. Now he will add icing to the cake by raising taxes.

Together, these tax hikes and interest rate increases will choke off any recovery the business cycle would naturally catalyze.

From now on, its Obama’s recession.

[Carla]

The health insurance questionaire you had to fill out is a standard form created by the state of Oregon, required of all health insurers. Each health insurance company just formats it and slaps their logo on it. Complaints should go to the state, not the insurance company.

[Carla]

As far as rescinding coverage, most health insurance companies (including Regence) have less than half a dozen of these cases each year - these are cases of outright fraud and are typically not challenged by the enrollee.

[Carla]

Not sure where your statistics on the percentage of health insurance dollars spent on administrative costs comes from. The Oregon Insurance Division posts administrative costs of all insurance carriers in the state, which range from about 5%-8% of premium. Industry standard is that 92%+ of premium collected goes directly toward claims. That's why health insurance companies aren't at all worried about meeting the loss ratio requirements of 85% as part of the new health reform act.