Think of the health insurance market as a giant casino with extremely weird stakes. Your bet (called a “premium”) puts you in “the game” of health insurance. You’re betting that you or your family is going to need some very expensive medical care over the coming year. If you’re right and you or someone in your family does require a lot of medical attention, the insurance company will pay most of that bill. If you’re wrong and you stay healthy, the insurance company will keep your money and might allow you to play the same game next year.
Sounds ridiculous, doesn’t it? It would be if the stakes weren’t so high. Here in New Hampshire, the average annual cost of health care for an individual is almost $12,000. The “ante” for a family of four ranges between $18,000 and $24,000. Maybe you’re one of the lucky ones and your employer has negotiated for a group rate and supplements a portion of that premium. Good for you (and your employer), but that money still comes out of the business under the heading of human resources. Maybe that money could have gone for higher salaries, or a pension fund, or maybe it would have lowered the cost of the product, making the business more competitive in the global market.
The problem with health care is that our chances of needing it increases as we grow older, but we lose money every year we stay healthy. You’re purchasing a very expensive product that is only good for a year and then goes away. It explains why health insurers and the pharmaceutical industry (especially the larger pharmaceutical supplement industry) are the most profitable companies in America. The health care industry is a good place to invest our money when it should be a place to invest in our health.
Our health care industry lacks equity. We need a system that is there for us throughout our lifetimes and rewards us for staying healthy. When I turned 65, I enrolled in traditional Medicare. In three years’ time, I saved enough money on insurance premiums to buy a new car — and I still have my Medicare insurance. I was even able to pay for supplemental insurance to cover the 20% of my medical bills not covered by Medicare.
When the health insurance industry started in the U.S. in the 1920s, the premiums were low, there were no co-pays or deductibles and health care was more affordable. Over time, more tests and newer medicines helped people live longer, healthier lives, but it increased the cost of health care. Because insurers use the premiums from healthy patients to pay for the sick, they vied with each other to keep their risk pools large enough to make a profit. Eventually, they needed to raise their premiums and tag on additional fees such as deductibles and copays.
But by then, we Americans were sold on the idea of buying health insurance because it was the only option we had to pay the high cost of medical bills.
The solution came in 1965, when Medicare was formed. We would pay into a system that would be there for us after we reached the age of 65. It worked well then and it still works well today. But why start at 65? Why not 55? Why have an age requirement at all?
America needs a health care system that invests in our health and will be there for us not just for a year, but throughout our lifetimes. If you stay healthy and the system saves money, you could get back a portion of the money you paid or pay a lower cost the following year. You save even more money if the system is universal, because then it makes sense to emphasize preventative care, which would decrease the need for medicines and lower the rate of hospitalizations. In addition, more people paying into the system makes it cheaper for everyone.
There are other hidden benefits as well. With only one “buyer,” drug prices can be negotiated down to Canadian, European or Japanese price levels. Labs and radiology tests can be standardized along with their prices. With everyone covered, hospitals will get paid a reasonable fee for every patient they treat, enabling even rural hospitals to stay afloat. If you put some of the cost savings into medical school tuition, lowering the cost of a medical education, then you can lower doctors’ fees as well.
Such a system doesn’t have to be Medicare. Medicare doesn’t cover dental, vision, hearing, mental health or hospice care, and that 20% cost of medical bills may be too steep for most of us. But those things can be changed. Congress allowed private insurers to do it, why can’t Medicare or a Medicare-like entity do it.
Under a universal health care system, a healthy family of four would save on average $240,000 over ten years. Instead we’re paying it into a system that offers the promise of paying you something if you get critically sick or injured.
Does that sound too good to be true? Think again. All other industrialized nations have a system just like that. And all of them have higher average life expectancies. The really crazy part is that, according to the Congressional Budget Office, such a system would cost the government less than what we currently pay with our taxes.
Medical care has become too expensive to gamble on health insurance. A simpler, more direct system that invests in our health not only helps us live longer, healthier lives, but it keeps more money in our pockets as well.
Dr. James Fieseher is a retired physician living in Dover.