Consider what it would be like to
have a health insurance plan that
capped annual benefits at $2,000.
For any medical care costing more
than that, you would have to pay
out of pocket.
Examples of care that costs more
than $2,000 — and often a lot
more — include virtually any
cancer treatment, any heart
surgery, a year’s worth of diabetes
treatment and care for many
broken bones. Even a single M.R.I.
exam can cost more than $2,000. A
typical hospital stay runs thousands
of dollars more.
So does this insurance plan sound
like part of the solution for the
country ’s health care system — or
part of the problem?
A $2,000 plan happens to be one of
the main plans that McDonald’s
offers its employees. It became big
news last week, when The Wall
Street Journal reported that the
company was worried the plan
would run afoul of a provision in
the new health care law. In
response to the provision,
McDonald ’s threatened to drop the
coverage altogether, until the
Obama administration signaled it
would grant some exemptions.
This episode was only the latest
disruption that the health law
seems to be causing. Also last
week, the Principal Financial Group
said it was getting out of the health
insurance business, while other
insurers have said they might stop
offering certain types of coverage.
With each new disruption come
loud claims — some from insurance
executives — that the health
overhaul is damaging American
health care.
On the surface, these claims can
sound credible. But when you dig a
little deeper, you often discover the
same lesson that the McDonald ’s
case provides: the real problem
was the status quo.
American families spend almost
twice as much on health care —
through premiums, paycheck
deductions and out-of-pocket
expenses — as families in any
other country. In exchange, we
receive top-notch specialty care in
many areas. Yet on the whole, we
do not get much better care than
countries that spend far less.
We don’t live as long as people in
Canada, Japan, most of Western
Europe or even relatively poor
Jordan. Misdiagnosis is common.
Medical errors occur more often
than in some other countries.
Unique to the developed world,
millions of people have no health
insurance, and millions more, like
many fast-food workers, are
underinsured.
In choosing their health reform
plan, President Obama and the
Democrats eschewed radical
changes, for better or worse, and
instead tried to minimize the
disruptions to the current system.
Sometimes, Mr. Obama went so far
as to suggest there would be no
disruptions, saying that people
could keep their current plan if they
liked it. But that’s not quite right. It
is not possible to change a system
as huge, and as hugely flawed, as
ours without some disruptions.
•
McDonald’s offers its hourly
workers two different health care
plans, which are known as “mini-
med” plans. In one, workers can
pay about $730 a year for benefits
of up to $2,000. In the other, they
can pay about $1,660 a year for
benefits of up to $10,000, The
Journal reported.
In a memo to federal regulators,
McDonald ’s executives argued that
their version of health insurance
“ positively impacts” the almost
30,000 workers who are covered.
And that ’s true. A plan with a
$2,000 or $10,000 cap can cover
some modest health problems and
is better than being uninsured.
But should the litmus test for
American health care really be
better than nothing?
Mini-med plans force people to
drain their savings accounts for
dozens of common medical
problems. They also force hospitals
to let some bills go unpaid, which
drives up costs for everyone else.
Senator Charles Grassley,
Republican of Iowa, has previously
criticized AARP for marketing
similarly limited plans to its
members. “It’s not better than
nothing,” Mr. Grassley argued, “to
encourage people to buy
something described as ‘health
security’ when there’s no basic
protection against high medical
costs. ”
Dr. Aaron Carroll, an Indiana
University pediatrics professor who
studies health policy, says of mini-
med plans: “They’re great if you’re
healthy, because you feel like
you ’re covered. But if you ever
need them, they’re so skimpy,
they provide very little.” Gary
Claxton of the Kaiser Family
Foundation adds, “They really just
shouldn’t be considered health
insurance.”
The plans’ skimpiness is the main
reason they ran into legal jeopardy.
Under the new law, most plans
must spend at least 85 percent of
their revenue on medical care,
rather than administrative
overhead. The McDonald ’s plans
aren’t generous enough to clear the
hurdle.
At the same time, it’s probably
unrealistic to expect McDonald’s to
give workers decent health
insurance. Many of those workers
make less than $20,000 a year. A
typical family insurance plan would
raise their total compensation by
more than half, destroying the
McDonald ’s business model.
The workers, for their part, cannot
afford to buy insurance in the so-
called individual market. Plans are
even more expensive in that
market, because it is dominated by
people who desperately need
insurance — which is to say, sick
people.
This is where health reform comes
in. It tried to solve the problem by
creating what policy experts call a
three-legged stool.
First, people will be required to buy
insurance, to spread costs among
the sick and the healthy. Second,
insurers will be prohibited from
cherry-picking only the healthiest
customers, again to spread costs.
Finally, the government will give
subsidies to people, like McDonald’s
workers, who can’t afford insurance
on their own.
Germany, the Netherlands and
Switzerland all use a system along
these lines to cover everyone,
largely through the private sector,
for less money per person than this
country spends.
The recent disruptions in our health
insurance market are partly a
result of the fact that the stool ’s
three legs were not built on the
same timetable. Some of the
insurance regulations, like the one
on overhead costs, are starting to
take effect. But the new markets
for health insurance, known as
exchanges, won’t be up and
running until 2014. This timetable
has its problems, and the Obama
administration will probably need
to grant some more temporary
exemptions.
In 2014, however, the choice for
McDonald ’s workers will no longer
be between a bad policy and no
policy. Through the exchanges,
they will be able to buy a real
health insurance plan — one that
covers cancer, heart attacks,
surgeries, M.R.I. ’s and hospital stays.
Dr. Carroll notes that many families
will end up paying less than they
are now paying out of pocket and
will get more access to care, too.
For insurance companies, these
changes won ’t be quite so positive.
They will no longer be able to sell
plans that devote 30 percent of
revenue to salaries for their
workers. They will not be allowed
to compete over which company
can come up with the most
ingenious ways to say no to the
sick. Their benefits and prices will
become more public, thanks to the
exchanges.
The health care overhaul that
passed Congress is far from ideal,
as I have written many times in
this space. But it does represent
progress.
The fact that it is beginning to
disrupt the status quo — that some
insurance policies will eventually be
eliminated and some inefficient
insurers will have to leave the
market altogether — is all the
proof we need.
No comments:
Post a Comment