Felicia Muftic – The insured are already paying for the uninsured
August 23, 2009
Last week I attended an event sponsored by our Congressman Jared Polis in Boulder. Subject: health insurance reform.
The greatest value of the event was waiting in line and talking in conversational tones with those who disagreed. Sadly, some of the slogan shouting on both sides cut our conversations short as we strained to hear one another.
A couple of conversations stand out in my memory. One was with a late-30s, obviously well-educated couple from Erie. They identified themselves later as conservative Republicans. The other, of similar age, had probably been listening intently to TV talk and often agreed with the couple from Erie.
The wife from Erie said she opposed extending health insurance to the uninsured because when she was in college (I judge maybe 15 years or so ago), she was uninsured and worked two years at Dunkin Donuts to pay off her bill. She thought others should and could do the same. She and the other participant introduced a point that I have heard recently: “The only ones who needed any insurance were about 15 million. Most of the 47 million uninsured could pay their own insurance, even if it was only catastrophic insurance or they were illegal immigrants.”
If we could have continued our conversation after giving it some thought, here is what I would have said: The Congressional Budget Office (CBO), in scoring the House version which included the public option, estimates that about 11 million to 12 million currently uninsured, or 4 percent of our population, would indeed sign up for a public option. That is a figure dependent on provisions incentivizing employers by tax breaks to provide health insurance to their employees or be charged $8,000 to pay for an employee to get insurance at the exchange (a menu of public and private options) and by moving others to Medicaid or Medicare (paid out of other taxpayer related funds). About 37 million would have health insurance coverage who do not have it now. (Note: illegal immigrants are excluded from participation).
The CBO estimates only 4 percent of the population would enroll in the public option portion of the plan. The rest would subscribe to the private insurance offerings included in the plan. This hardly constitutes a “takeover” of the medical insurance system, nor does it present much of a threat to the private insurers’ existence. Using American Medical Association words, the CBO estimates that ” from 2010 until 2019, the number of Americans with employer provided coverage will increase from 150 million to 162 million. Additionally, for those Americans who purchase coverage through the Health Insurance Exchange, two-thirds (or 20 million people) will choose private plans.” This in no way resembles the maligned Canadian or British national health system.
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Since my Erie conversant went to school, the cost of medical care has soared. I wonder how many years at Dunkin Donuts, in addition to a 60 hour work week as a fast food store manager, my daughter would have had to work just to pay off the $250,000 treatment for breast cancer. Lucky she has employer provided insurance and only has a $20,000 deductible to deal with. How about the teacher who only gets $300 per month stipend from her public charter school toward a $1,500-a-month policy, with a $2,000 deductible, to cover a family of five while her self-employed husband builds up a new CPA practice? That eats up 50 percent of her take home pay. Or a person I know with Lyme’s disease almost did not qualify for a catastrophic policy because of his pre-existing condition. The rest of his care will be covered by some personal savings reduced to very little due to a recent layoff and divorce settlement. They all are one major economic setback and layoff away from joining the ranks of the 40-some million. Those illustrate problems at today’s prices; cost of insurance is projected to rise 70 percent in the near future.
Those who oppose a public option because they hold allegiance to an ideology are paying a high price: As the Denver Post estimated, the insured in Colorado pay an extra $300 to one $1,000 a year for their current premiums because of unpaid bills as the 800,000 uninsured seek emergency room medicine or others are driven to bankruptcy or are impecunious. The hospitals or doctors increase their charges to insurers and paying patients in turn cover the costs of this “charity care” with higher premiums. The insured pay at least an extra 13 percent of their premiums to the private insurers to cover extravagant salaries, commissions, advertising and lobbying costs. Without some mechanism, competition from lower priced entities, or government regulation, the insured will continue to pay bloated and ever-increasing premiums to for-profit insurers for their health insurance.