What Is Healthcare
Let's face it, health care is confusing. But it doesn't have to be. Here is a simple guide to get you through.
Let's face it, health care is boring and complicated. But it's also essential and I wish I didn't wait until I turned 27 and got kicked off my parents plan to figure that out. But seriously, how tf am I supposed to know which candidate's policy to support if I don't even know wtf a deductible is?!
Thankfully, my friend Jerry McCullough does and he chatted with me to give us the rub on health care. Jerry is the President and Founder of Spectrum Insurance Services and has spent over 35 years as a health insurance broker and consultant. In true WTF style, Jerry helps us navigate this outrageous industry with simple, easy to understand facts so we can take "charge of our own health care." I've laid out parts of our conversation in this simple guide.
Anything marked with a * is defined in the vocab section at the bottom
A Brief History:
In the 40s and 50s, all insurance agents had to offer was hospitalization insurance*. But over the years, everything started to get more and more complicated. The insurance industry started to control costs by putting networks* in place, this led to a continuous increase for the cost of health insurance because as PPO's* became more popular, so did lawsuits. Basically, medical malpractice lawsuits became the largest cost to health care and so the insurance to cover doctors continued to get more and more expensive.
Health Care under President Clinton:
Congress stepped in amidst this crazy surge in prices and passed the Kennedy-Kasssebaum Law, aka HIPAA. This was the first step towards health care reform because it reducedthe power of the private, for-profit sector and provided more protections for citizens.
Affordable Care Act under President Obama:
President Obama came in and expanded HIPAA through the Affordable Car Act, aka Obamacare. This expanded the amount of coverages to 10 essential benefits*, eliminated pre-existing conditions*. This led to controversy because people in a higher income bracket who previously were paying less now had to pay more to cover the cost of insurance for the rest and the businesses now have to pay a tax to fund the new health care system.
One of the key aspects to make the ACA possible was the inividual mandate*. Jerry says the need for this is explained by the law of large numbers, basically if all we have are sick people taking out insurance than the cost of the insurance will soar. But if everyone is on it, then we have a lot more money going into the system. The more people that are insured, the lower the risk to the insurer.
The current situation under President Trump:
The Trump administration has not eliminated the ACA, but have taken steps to chip away at it bit by bit. They started by eliminating the individual mandate*, so there is currently no penalty for not having insurance. This meant that more people opted out of health insurance, so insurance companies raised their premiums*. Now, there are pros and cons to this:
Pro: Insurance companies can no offer non-ACA compatible plans. This creates a freer marketplace with more competition.
Con: Competition is bad if you believe that everyone should have access to healthcare. This goes back to the law of large numbers and individual
What Would A Medicare for All System Look Like?
What Bernie Sanders is essentially saying is "hey, it works for people over 65. Why don't we start medicare at birth?" The challenge in doing that is that currently, from the time you are about 16, you start paying 7.5% of everythgn you earn into your social security* and medicare. By the time you reach 65, you've accumulated a pretty large pot of money. But, if you start it at birth, than that bank just isn't there. Where, then, will the money come from? The taxpayers and businesses. (Bernie says his plan will cost $30 trillion over 10 years). Some people say that
Pros: Free, lifetime coverage for every American; All essential benefits included
Cons: Everyone gets the same plan, no private option; there would be limitations on procedures, longer waiting times and an expected overall decrease in quality of care.
Why Is it so difficult to institute universal health care in America?
The US is the only developed, wealthy country in the world wihtout some form of universal health care. People from places like Europe, Canada and Australia often say "why can't you do it like us?" As a Spanish/Australian, I have often wondered that myself. According to Jerry, the biggest thing holding us back is simply that "habits are hard to break." We are used to the luxury that comes with having a privatized health care system, features such as having access to a doctor 24/7, the highest quality hospital with privates rooms and meals, doctors are paid top dollar therefore recruiting talent is much easier, acces to the latest technology and innovations, the list goes on. But Jerry also adds that this might not last forever. Older generations are set in their ways and over all are pretty satisfied with the health care system in place. But younger people are not and as voting demographics change, it is likely that the health care system will change with it. Some form of "universal health care with a private option might be the future, because the young people are there for it."
Some final tips!
- Be pragmatic
- Don't be afraid to ask questions like "do I need this" or "what is this charge?". Knowledge is power.
- Shop around for prescriptions. Different retailers have different prices - from walgreens, to costco, to target. Take the time to search. There are lots of deals out there too
Hospitalization Insurance: Insurance that covers parments for hospital related activity like hospital stays and surgery
Network: A group of doctors and hospitals that accept a certain rate negotiation from the insurance company.
HMO: Health Maintenance Organization; an insurance plan with it's own network of doctors and hospitals. Consumer pays less but has less choices.
PPO: Preferred Provider Organization; an insurance plan where the consumer can choose their doctors and hospitals.
Copay: A fixed amount that you pay for a medical service before receiving the service. Note - your copay is not your final amount. It's just the upfront charge. You can still receive a bill from your insurance after your doctor visit, so make sure you do your homework before. (I've made this mistake too many times.)
Benefits: The health care items or services covered under a health insurance plan.
Pre-Existing Condition: A medical condition that started before a person's health benefits went into effect. Before the Affordable Care Act was passed, some insurance policies would not cover expenses due to pre-existing conditions.
Individual Mandate: A law requiring everyone to have at least a basic level of coverage otherwise they'd be fined.
Premiums:The initial cost to buy health insurance
Social Security: Social security is an insurance fund that American workers pay into over their course of their working life and then are able to withdraw from for retirement and other senior benefits.