How to Fix Health Insurance

How to Fix Health Insurance

My guess is that you are on one side of the fence or the other about health insurance in the good old United States. Keep Obamacare or get rid of it entirely.  You all have your arguments. Some valid, some simply uninformed, and some wildly wrong. But before you stop reading, at least give my suggestion a good read.

What’s right about Obamacare? That all people can be covered no matter of their economic or medical situation.

What’s wrong? Covering everyone appears to force the insurance companies to charge higher and higher premiums. And since many could never afford those premiums, tax money must be used.

From my point of view, the only ones who truly benefit from our current health insurance are the insurance companies themselves.

But what if all insurance had to work like Medicare?

These are actual numbers from a series of claims I helped resolve. This distinctly illustrates the problem with today’s medical costs and reimbursements.

health-care-costs

A nursing home had a patient that was covered under basic Medicare (hospital or nursing home only) and employer offered insurance. There was much confusion as to who to bill so the nursing home ended up billing everyone eventually. It’s all been worked out and the appropriate parties have been reimbursed.

The first column is what the nursing home billed to Medicare and then later the insurance company. The last column is what they bill when there is no insurance or Medicare coverage for a patient.

  • This tells me that the nursing home’s costs plus a modest profit was about $9,276.
  • Medicare has a fairly clear table of reimbursements based on the service rendered and paid near that amount at $10,295.
  • The insurance company seemed to think that paying $16,731 of the over $30,000 was a good deal. But of course they then use their overpayment to justify charging higher rates. Remember they are in business to make as great a profit as possible. Not to really help people.
  • And billing over $30,000 for services that actually cost less than $10,000 was the nursing home simply playing the game.

So in my opinion how can this be fixed?

Let a government agency, like Medicare set the reimbursement rates for everything and everyone!

Even now it should be a fairly simple calculation to determine how much hospital care insurance should cost the consumer:

Total of a year of U.S. Hospital Costs (determined using the standardized system)

Divided by           The population of the U.S.A.

And like basic Medicare, this would be the minimum required coverage for each person. If it was still unaffordable, at least the portion picked up by our tax dollars would be reasonable.

Yes, there would be a lot more to this. Just like the dizzying decisions every person now on Medicare needs to make each year.

But it would be a start to making our health care costs both more transparent and affordable.

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