Health Insurance in the USA

By david / September 8, 2010

Skeptical About Any Real Change in the Health Insurance System of the USA

The date of this post is September 9, 2010. I put this here because supposedly everything is going to change in a few months. However, I’m very skeptical about any real changes coming to the American health insurance system.

The reason why I’m skeptical is because the democrats are probably going to lose their majority soon. And it is likely that much of the health insurance ‘reform’ that has been written into law is likely to get reversed.

In addition to the majority to be lost by the dems, the health insurance lobby is very strong and will lobby to reverse or at least alter much of what was attempted to be put into law. All of this means that it is likely that there will not be much change 5 years from now, compared to five years ago in the health insurance system of the United States!

Preexisting Conditions

This is a big problem in the USA health insurance system – perhaps one of the biggest. Anytime you sign up for an individual health insurance plan, the insurance company is going to ask you a bunch of questions about your past health problems. If you have had any, then they know they will either ask you to pay MORE for your premium than originally quoted or they will put a ‘rider’ on your policy that states you will NOT be covered for the particular health problem you have been treated for in the past. This rider can be temporary or permanent.

You may think this is “no big deal”, but actually, it is a BIG deal. I will give you an example in real life. My health insurance agent told me just yesterday morning that he pays $2500 dollars per month for health insurance! This is because his wife is not well. So you see, in the American health care system, you can end up paying a LOT of money. You are penalized for being unwell in the present and also for your past.

The Problem For Health Insurance Consumers

Basically, health insurance companies want to pay the least amount possible. And they will try every possible clever way they can think of to reduce what they pay which thereby increases what the individual pays. That is my opinion from observing the situation for a while. The above example serves as proof (in my mind) that I am correct about this.

Most people cannot afford to pay as much as the man in the example above for their health insurance.

Contrast the above story with a country in Europe. For example, let us look at Germany because I have a little bit of information about that system. In Germany, the public health insurance system does NOT allow insurance companies to avoid paying for preexisting conditions. They are also not allowed to set limits on lifetime payments!

Lifetime Payment Limitations

Health insurance companies in America all set lifetime limits on what they will pay. After that limit is reached, guess what happens? They CUT you off.

Now think about the purpose of insurance: To protect you in case of disaster! These insurance companies have it all in their favor. They will gladly collect money from a healthy person who will not cost them anything. But they seek to limit their liability to pay for someone who has paid into their company but becomes very sick and needs benefits. For example, think of a child born with special needs. The cost for treatment and care for such a child could amount to millions over a lifetime. The parents paid their premiums in good faith with the intention to protect their family against health care disasters like this one! Instead of taking care of the child, the insurance company will seek to limit how much they have to pay.

Guess what happens next! The child is dumped after that ‘lifetime’ threshold is reached. Leaving the parents with nowhere to turn but to the government. So the insurance companies have limited their liability and dumped the rest of the burden on the American taxpayer through the Medicare / Medicaid system.

Deductibles and Co Pays

In addition to the methods listed above. You will find that American health insurance companies also set deductibles for basic health care needs as well as co pays to further reduce what they need to pay out while keeping as much as they can for themselves and their shareholders.

So, if I go to the doctor for a simple cold, I may be faced with paying 20% or more of the cost of the visit. Of course, this is in addition to my monthly health insurance payment.

If I need a prescription, and the likelihood of that is high because doctors only have two real tools: drugs and surgery, then I may need to get a prescription filled at my local pharmacy. Well guess what? There may be ANOTHER deductible waiting for me there too!

The plan I looked at yesterday had a $500 per year deductible for prescription meds. What does that mean? It means that any prescriptions I need in any particular year are NOT covered by insurance until I shell out $500 bucks for my prescription. Many people will never go beyond that $500 in a single year. That means the insurance company collected their FAT premium and then put the burden of paying for a prescription on me! Now to be fair, not all plans work the same way, this is just an example of a plan that we looked at yesterday!

In a country like Germany, if you are in the public health care system, these costs are covered by the public insurance system, not by the recipient of that insurance!

Do you see how the American health insurance consumer will pay an awful lot more for his individual health care needs over a lifetime? And then there is that wretched limit where they stop paying for your health care even though you may have paid them premiums for 20 years!

What a sweet deal the Health Insurance companies have in the United States! Do you think it is going to change drastically in the future? I seriously doubt it for the reasons I stated in the first couple of paragraphs. How do you feel about this topic?

 

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david