Tag Archives: health insurance

Saga Redux

In December 2019 I had surgery for prostate cancer after my annual PSA levels, which I’d beengetting since 2007, started to gradually increase in 2017. The surgical pathology report showed my tumor was more aggressive than the biopsies, and even though the resection margins were clear, the tumor had already started to extend beyond the prostate. Radiation treatment for a recurrence sometime in my future was likely inevitable. I would get PSA tests every three months for a couple of years, then every six months if they remained negative or stable. Eventually, if all was well, I’d get annual PSA testing for the rest of my life.

My PSA levels during 2020 were <0.014 ng/ml, below the level the test can detect. The first one of 2021 was 0.015 ng/ml, a very insignificant increase. My levels rose again slightly before hitting a plateau between 0.022 – 0.027ng/ml. In December 2021 Dr. Fine, my surgeon, recommended I get tested every six months. In June 2022 the result was 0.023 ng/ml, and I was relieved it had gone down.

Six months later my PSA was 0.044 ng/ml, almost double the previous level.

I sat at my desk for several minutes, starting at the results on the monitor. Intellectually I’d known this was a possibility, but now it had become reality and I wasn’t sure how I felt. It wasn’t a death sentence and the low level meant I didn’t have a large cancer with metastases. I was more worried about how Peg would react.

“My PSA was point-zero four-four.”
“Ok. How do you feel about that? It’s been a good three years.”
“I dunno. I’m not surprised but I’m not sure what to do next. I should probably ask Dr. Fine what he thinks.”
“Well, I’ll support whatever you want to do.”

Now, back in the good (or bad) old days, before e-mail, smartphones, and websites, I called patients on an antique, corded landline to discuss important issues, like abnormal Pap smears and biopsy results. Now most large health care organizations use MyChart, an application that allows patients to schedule their own appointments, communicate with their healthcare providers, view their medical records and test results and pay outstanding bills, all while adding another degree of separation between patients and said providers.

My health care organization, Suburban Medical Center, is more interested in efficiency and revenue than customer service; their medical providers are tightly scheduled and controlled. They prefer to communicate via email, often after hours or during a rare break.  There are no direct phone numbers to any of the offices; one has to call the generic department number. If I want to talk with a physician’s nurse, the department personnel might try to contact her (usually her).

I sent a message to Dr. Fine through MyChart.

Me: Level has doubled. Now what?
Dr. Fine: Since lower than 0.05, I recommend repeat PSA in 3 months. We can follow it a bit closer. If it continues to rise, we would consider planning for salvage pelvic radiation therapy.
Me: Pelvic salvage sounds like a sunken ship. So is this likely tumor cells, residual tissue or Karma messing with me?
Dr. Fine: Not Karma Salvage RT sounds bad but can provide cure for you. We went 3 years with just surgery which is great for your very aggressive cancer. If you’d like, I can arrange a visit with our radiation oncologist, Dr. Howard.
Me: Only if you think we’re at that point. It seems the experts don’t agree on the threshold; 0.05, 0.1 and 0.2 are the numbers I’ve come across.

Whether to treat or continue monitoring depends on the level and the rate of PSA increase, but in the end it’s what the patient wants to do. Ultimately, I decided that continuing to follow PSA levels would only increase my level of anxiety and delay the inevitable.

I asked the office to set up a referral and ran into my first problem. Someone entered a referral to Hematology/Oncology. I tried the “Find a New Provider” option in the application, but Radiation Oncology didn’t appear on the list. I found Dr. Howard on the organization’s general website but there was no option for making an appointment. Round and round we go.

I thought making an appointment in person would be more expedient, given the office is only a few miles from my house. Carla, a diminutive, cheerful woman greeted me as I walked in.

“My name is Carla. How can I help you?”
“Is this Dr. Howard’s office?”
“Yes, it is.”
“I had surgery for prostate cancer 3 years ago and now my PSA levels are going back up. Dr. Fine suggested I talk with Dr. Howard about radiation. I’ve been trying to make an appointment and it hasn’t been easy.”
“How soon are you hoping to see him?”
“Sometime in January is fine.” (I didn’t want to ruin Christmas with potentially bad news).
“Well, let me see what I can find.” She looked at the schedule for a few minutes.
“He’s got an opening on Tuesday January 10. You’ll meet with his nurse at 8:30am and she will go over a lot of information, then you’ll see Dr. Howard at 9:00am.”

I knew Peg would want to come to the appointments because she cares deeply about my wellbeing and doesn’t trust the health care system as far as she could throw it. She also asks far more questions than I do. I mostly wanted to talk about whether radiation was a good idea, how long it would last and what side effects to expect.

There were several other people in the waiting room on our appointment day. Everyone had to wear masks, but for some people rules are mere suggestions. There was an old guy in a wheelchair whose daughter hovered over him while he took sips of coffee in between hawking up hairballs, sans mask. Why have a coffee machine in the waiting room if you’re supposed to keep your face covered.

Danielle, the nurse who does pre-consult counselling, called us into a room and, over the next 25 minutes or so, gave us an overview of radiation treatments, side effects and how to deal with them, and warning signs like rectal or urinary bleeding. I don’t remember a lot of details; you’d probably have to ask Peg. Having the nurse see the patient first is probably a good idea, especially with elderly patients, given that nurses tend to be far more patient. She gave us a packet of information and left.

A few minutes later Dr. Howard came into the room and gave us a warm greeting. He was a tall, thin bald guy who reminded me of Ru Paul. I shamelessly told him I was a retired physician; that often changes the tenor of the interaction. There’s no need to dance around delicate subjects like clinical judgement, diagnostic or therapeutic uncertainties, disability or death.

We’re here because my PSAs have gone up relatively quickly in the past six months. Given my tumor was more aggressive than the biopsies and there was extraprostatic extension, I figured we’d be doing this sooner or later. Is there an advantage to doing this now over waiting and following PSAs?”
“I know what I’d do in your situation. Radiation is like battling an army. I can fight against 1000 soldiers or 10,000 soldiers. So, doing it now increases the chance of cure.”
So, how do you know where you’re shootin’?”
“We direct radiation at the bed where the prostate was. Before treatment we run what’s known as a CT simulation and map out the area. It takes about 2 weeks for the radiation physicist and me to set up a program. We’ll call you when we’re ready to start treatment. You’ll come in five days every week, but initially we’ll be putting you in to different time slots. You’ll have a regular time slot in a week or so as other patients finish their treatments.”
How long is this likely to take?”
Usually about 37-40 treatments. We’ll start doing PSAs again in about three to four months.”

I left with an appointment the following Tuesday at 4:00pm for the CT simulation.

Preauthorization

There’s a meme on the Internet that exquisitely illustrates the differences between the American and Canadian health care systems. (Since I don’t know if this is copyrighted, click here to view.)

Breaking Bad Canada
You have cancer.
Treatment starts next week.
END

Just because you have insurance doesn’t automatically mean the insurance company will approve payment without question. They require approval for anything that is likely to cost them a lot of money. Our insurer is very good at authorizing treatment. Other companies make their subscribers jump through a lot of hoops, even for cancer treatment, looking for ways to weasel out of paying. (A friend of ours whose wife ultimately died of her second cancer had to fight for things our insurer would have approved without question.)

Peg works for our insurance company, which stresses the employees are the “first line of defense against waste, fraud and abuse,” and as such are diligent guardians of precious health care dollars. And did I mention she hates the health care system in general?

She called our insurance company to ask about preauthorization for my simulation and treatment. This started a week-long exercise in futility, prompting her to wonder, “How do they manage to open the doors in the morning?”

“I started with one of our care coordinators who was very helpful. I asked about getting a pre-authorization for the CT simulation and therapy and how much this was likely to cost us out of pocket. She told me Suburban Medical hadn’t submitted pre-authorization requests yet, so she called Linda in Radiation Oncology. Ultimately, they determined there was no need for the pre-authorization for the simulation because it’s not for diagnosis. We’ll need it for treatment, but they can’t provide a cost estimate until after the provider submits a treatment plan.
“So, then I called someone else to try and get a ballpark figure for radiation treatments. He found general cost estimates for prostatectomy and brachytherapy but nothing for radiation. He suggested I call Suburban Medical, which I did but I left a voicemail and haven’t heard back.”

A week later she tried again.

“I called the care coordinator again; she hadn’t gotten a pre-auth yet, even though it’s been ten days since your consult and your simulation was at the beginning of this week. Suburban Medical told her she wouldn’t get any requests until the imaging results were available. It usually takes a couple of days to approve it, but she said she’d fast track it for us before treatment starts.
“I called Suburban Medical but whoever I spoke with couldn’t supply any cost estimates. She suggested I call our insurer back, which I did. Our rep said the provider should have this information easily available since this is their business. He’d need more information because estimates are based on the individual provider, the specific plan and reimbursement contract. He did say, ‘You’re likely to blow through your deductible and out of pocket before this is over.’
“I finally gave up and went to Google. Estimated costs for radiation therapy for prostate cancer recurrence range from $33,000 to $67,000.”

Wow!

I’m fortunate having insight into the health care system as well as a tenacious woman looking out for my interests. Imagine, though, the aggravation and anxiety a person with little disposable income has to endure, navigating through a confusing bureaucracy and wondering how to pay for several thousand dollars of treatment while coping with a cancer diagnosis.

I’ll discuss the simulation and treatment in my next post.

Featured image © Can Stock Photo / bertoszig

An Epidemic of Stupidity

I’ve declared the third week of July as National Health Care Stupidity Week, for I’ve never encountered such high levels before.

I saw an ophthalmologist for a problem with my left upper eyelid at the beginning of July and scheduled surgery for three weeks later. We asked the scheduler how much the procedure would cost but she said, “It depends.” That’s not much of an answer to a physician who understands the vagaries of CPT coding and insurance reimbursement. You give the insurance company the codes and your charges. The insurance company laughs their asses off and then tell you “No fucking way. THIS is what we’ll reimburse you.”

The scheduler said, “I’ll ask the doctor what he plans on doing and I’ll call you in two days with the charges.”

I can understand if the physician wasn’t quite sure what he was going to be doing right after seeing me, so we let it go.

The week’s aggravation started at Drugs ‘R’ Us, a national chain, which the threat of litigation prevents me from identifying. I’ve used a maintenance inhaler for life-long asthma, for which there is NO generic. The price has climbed from a $150 insurance copay for a three-month supply from a parasitic mail-order pharmacy benefit manager to $400 for one and NO insurance coverage until (my very high) deductible is met. I brought this up to my pulmonologist last month and asked for a little-known generic equivalent (different medications but should have the same therapeutic benefit).

He said, “Well, Thieving Bastards Pharmaceuticals have this discount card that will give it to you for free if you have insurance. It’s good until December 2018.”

I learned a long time ago there ain’t no free lunch, but if they are willing to part with it for free, I’m in. I took it to Drugs ‘R’ Us and, after 20 minutes or so of fighting with the computer, I got my inhaler. ONE inhaler. I have to go back every month for this charade.

The pharmacy’s robot phone said I could pick up this month’s inhaler. However, the pharmacy tech brought me a bag with three inhalers and a bill for $935 “because you haven’t met your deductible.” No shit, Sherlock. I have insurance with a high deductible and a health savings account (HSA) which is great at a certain income level but completely useless if you’re making minimum wage (in which case you probably don’t have any insurance and you’re a drain on society, at least according to the bastards who’ve been trying to undo the ACA for the past 8 years).

“Last time I got one and it was free! Here’s the card and I’m NOT going to pay almost a thousand bucks for this. I’d rather die a quick and painless death.” (I’m using that phrase more often these days.)

“Well, let me change it but I have to run it through the system again. It’s going to take some time.”

Fine. I sat in one of the uncomfortable chairs in the pharmacy waiting area and perused the local paper, which didn’t help my mood any.

Then my phone rang.

“Hi, this is Brunhilda from the Pretentious Suburban Surgery Center. Your insurance is going to pay 80% of the procedure after you’ve met your deductible, but you haven’t met your deductible, so we want your left testicle ($1305) as a down payment.”

“First of all, why? Second, what is this going to cost me in total?”

“Well, we ask everyone for a down payment.”

No, you said it was because I hadn’t met my deductible but, please, proceed.

“Why? This isn’t a cosmetic procedure and I’ve already signed the boilerplate insurance assignment form that says I’m responsible for the remainder.  So, again, what is this going to cost me?”

“We can’t tell you what we charge, and the insurance company won’t let us tell you what they will pay us.”

“Why not?”

“It’s in our contract.”

“You’d tell me if I was paying for all of this out of pocket, wouldn’t you?”

Silence

“Well, my financial adviser has told me that’s not a great idea. I’ve got an HSA funded with pretax dollars and if I overpay you and you then reimburse me directly, I might run afoul of the IRS, which is not known for being gracious.  Would you be willing to talk with her as I have to leave town in a few minutes?” (Translation: “If I acquiesce to this extortion, Peg is going to ream me a new one. We’re going to play good cop/bad cop and I’ll let her ream you a new one. You really don’t want to poke this bear, but you’re gonna have to learn the hard way.”)

She says, “I’d be happy to!” and I hung up, snickering.

An older woman came to the pharmacy while I was waiting. She was bent over a wheeled walker, wheezing audibly as she shuffled up to the counter. I suspect she had long-standing COPD and it made my lungs hurt just to hear her breathe.

“They called me and told me my prescriptions were ready.”

“What’s the name?”

She wheezed her name.

“Your prescriptions have expired, and we put a call into your doctor’s office to get authorization for refills.”

“But someone called me and asked if I wanted all my prescriptions refilled. She even listed all of them and I said ‘yes!’ Then I got a phone call from you!”

“That is an automated system and we don’t have any control over it.”

This went on for several minutes with the poor woman protesting that she’d done everything she’d been told but slowly realized this trip had been for naught.

Finally, she sighed, said, “Well, what are you gonna do,” turned around and shuffled out. She was far more resigned than I ever would have been. ( is one of my all-time favorite revenge movies. Just sayin’.)

The pharmacist came out, handed my drug card back to me and said, “We put in a phone call to the company and we’re waiting to hear back. It shouldn’t be too long.”

Twenty minutes later I was still waiting. Finally, I got up and said, “I have to leave town. Can my wife pick this up?”

“That’s no problem. We’ll let her know when it’s ready.”

Then I asked her. “Is there a generic for this because the card expires in December and I can’t afford $400 a month for this.” I gave her the generic medication names.

“It looks like the only one is ‘Yerstillscrewed’ but insurance doesn’t cover it.”

“I KNOW that, but I can get a three-month supply using GoodRx for less than half of what one of the brand-name inhalers costs.”

It’s turns out that Thieving Bastards Pharmaceuticals changed the program so that it only covers that drug up to $200/month. You know, the drug for which they set the price at $400.

I left and started my drive to Springfield. I was just about at Joliet when the phone rang.

“This is Vinnie, the enforcer, uh, business manager from the doctor’s office. I wanted to let you know that your insurance is going to pay 80% of the procedure after your deductible is met, but you haven’t met your deductible, so we want your right testicle as a down payment.” (It’s been two weeks since the initial visit and less than a week before surgery.)

“Why?”

“It’s our policy.”

“I’ve had other procedures and visits, and no one has EVER asked for money up front. You just told me what my deductible is, and you know how much I’ve met, which means you also know I’ve been paying towards it. The surgeon’s fee and the surgery center charges are likely to eat up the rest of my deductible. Again, how much is this going to cost?”

“It depends.”

“What do you mean, ’it depends?’ That’s bullshit. There’s a CPT code for the procedure, and you have a charge for it. I know that because I’m a physician and I’ve had my own charge list. You’re going to give the insurance company a bill with a CPT code. They are going to send me an EOB (Explanation of Benefits) which will tell me what YOU charged, what they allow, what they’ve paid and what my obligation is. So, to pretend this is a deep, dark secret is disingenuous. The only thing that “depends” is how much the insurance company is going to pay you and your contract with them defines their reimbursement. So, to ask me for money up front is insulting. You’re making me sound like a deadbeat.”

“No, no, we do this with everyone.” (Where have I heard that before?)

“Yeah, well no one else has ever asked me for a deposit! No one asked for a deposit before my colonoscopy, or when I went to the ER for a doppler scan for lower leg pain. Look, at this point I’m ready to cancel the whole goddam surgery and find someone else!”

“No, no, no! I’ll talk to the doctor and let him know how you feel and you can discuss it with him.”

I called Peg, who spent the next three days dealing with the office, getting nowhere. Finally, she got a call from the new office manager, a far more reasonable person. They talked for a couple of hours about what appears to the patient to be a hostile approach to payment. It was both illuminating and infuriating.

High deductible health plans are sometimes several hundred dollars a month less expensive than plans with lower deductibles. Some high-deductible plans come with Health Savings Accounts (HSAs), a Republican wet dream Paul Ryan drags out as an alternative to the ACA. HSAs are funded with pre-tax dollars – a maximum of $3450 a year for singles and $6900 for families in 2018 – which can only be used for health care expenses, at least until the account holder reaches 65. Old goats like me (over 55) get to put away an extra $1000 per year in our HSAs. The plans still come with  out-of-pocket maximums of $7,350 for singles and $14,400 for families.

This is a great idea if your income level allows you to part with a few hundred bucks a paycheck and you’ve got a tidy sum in your bank account. It sucks if you don’t have the income, the savings, or if you anticipate ongoing medical expenses.

Here’s the problem. Lower income people get high-deductible plans because the premiums are affordable, but they are at greater financial risk because they don’t have the savings to cover the deductible. They may avoid preventive care if they are unaware that most high-deductible plans cover it with no out-of-pocket costs, opting to take a chance they won’t develop a more serious (and costly) illness later. Because they often can’t afford the deductible, they are more likely to default on outstanding medical bills. Hospitals and physicians have caught on and now demand money up front.

Asking for a down payment would be far more palatable if it applied to everyone. It’s no different than a contractor asking for money up front for a pricey remodeling job. Pay some now, pay the rest when the job’s done. But framing it as something required only of people who haven’t met their deductible implies they are deadbeats and is insulting. Further, waiting until a few days before surgery to extort money is infuriating. It should all be explained up front when scheduling the surgery.

The logical solution is universal coverage, but Congress lacks the political will and there are too many people making waaaaay too much money off the current system.

Hang on, because it’s only going to get worse.

 

What Does The CBO Say?

Last week the Congressional Budget Office released “The Budget and Economic Outlook: 2014-2024.” Conservatives and the right-wing media got an instant woody over Appendix C – Labor Market Effects of the Affordable Care Act: Updated Estimates. The ACA would kill 2.5 million jobs, take away the incentive to work and put millions more on the dole.

The White House, predictably, embraced the report as a victory of sorts for the beleaguered American wage slaves who have been worried they will die chained to their desks.  Meanwhile, Politico accuses both sides of “cherry-picking” the data in the report.

(C) Can Stock Photo

(C) Can Stock Photo

So what to make of all this?  Here’s my take.

First, CBO’s projections are educated guesses about the future based on current data and realities that are likely to change, requiring further analysis and adjustments.  Indeed, the CBO admitted:

“…estimate(s) of the ACA’s impact on labor markets (are) subject to substantial uncertainty, which arises in part because many of the ACA’s provisions have never been implemented on such a broad scale and in part because available estimates of many key responses vary considerably. CBO seeks to provide estimates that lie in the middle of the distribution of potential outcomes, but the actual effects could differ notably from those estimates…”

The claim that there will be 2.5 million fewer jobs by 2024 can be blamed on conservative animosity towards the ACA, aided by the CBO’s authors’ poor choice of words.  The report forecast workers voluntarily reducing their labor by 2.5 million full-time equivalent hours. That will likely happen mostly among low wage workers, amounting to 1.5 percent to 2.0 percent of total hours worked.

“…The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week)…”

Those workers are NOT quitting altogether to go on the dole. Some may go to part-time jobs; others may retire early. There are 10,000 Baby Boomers retiring every day through 2031; their exit from the workplace could potentially create job openings for younger, qualified currently unemployed workers.

However, any potential job changes come with trade-offs.

Full-time employees whose income is more than 400% of the Federal Poverty Level (FPL) or whose employers offer health insurance are not eligible for subsidies for health insurance purchased through the exchanges. So they will either continue to work full-time, switch to a different full-time job, or go to part-time jobs and purchase their own insurance, especially if the net result is working fewer hours while maintaining their desired standard of living.

Employees whose income is less than 400% FLP or whose employer does not offer insurance can obtain insurance through the exchange, and they are eligible for tax credits and subsidies, which decrease as income increases. They might work less to avoid crossing the FLP threshold which means losing their subsidies and credits while effectively hiking their taxes. But then again, they might decide the extra income is worth the tax bite

People living in states that agreed to expand Medicaid are now eligible for Medicaid benefits if their income is less than 138% FLP. If they earn more, they’ll be eligible for insurance subsidies, ensuring they won’t lose coverage. People living in states that did not expand Medicaid, however, can only get insurance subsidies, not Medicaid.

I think the real issue is: conservatives and their corporate overlords hate losing the leverage that health insurance once gave them over workers.  How many people have endured “job lock,” staying in a thankless job, working more hours for less pay, working for condescending employers who’ve made it abundantly clear employees are unimportant, easily replaced, but a necessary evil?  Have you ever been told, “Bend over and like it because there are ten other people out there waiting for your job?”

Employers might be a little more considerate now that health insurance isn’t always tied to the job. I’m not holding my breath.

The Difference Between Auto and Health Insurance

If anyone still wonders why health insurance is far more expensive than auto or homeowner’s insurance, here’s a simple explanation:

IF CAR INSURANCE WAS LIKE CONTEMPORARY HEALTH INSURANCE

  • Employers would provide auto insurance as a benefit in lieu of higher wages
  • Employers would either be self-insured or pay whatever rates they could negotiation with third party auto insurance companies, guaranteeing outrageous prices because “that is what the market will bear.”
  • A run through the diagnostics and an oil change would be covered, but, like an annual exam and Pap smear, would be priced at $250.  You could only have one oil change a year; if you needed more, you’d pay $250 out of pocket, unless you had the Federal Employees Auto Insurance Benefits, in which case you could have an oil change every week, subsidized by the taxpayers.
  • Like dental coverage, your car would be eligible for professional detailing twice a year, at participating detailers.
  • Like optical coverage, your car could get a new set of headlights and taillights every year, whether or not it needed them. Or, better yet, a new set of tires every year.
  • Like pharmaceuticals, you’d have a $10 co-pay for a tank of regular gas, $20 for midrange gas and $35 for premium, but that tank would have to last a month.  Your Auto Fuel Benefit Manager, however, would be arguing with the oil companies who would be charging $200, $500, or $5000*per tank to cover their “R&D” costs, which would be half of their marketing and advertising budget.
  • If you were self-employed, unemployed, or lost your coverage because of “downsizing” or illness, you’d have to pay $250 for that oil change, a minimum $200/month for a tank of gas, or walk to work.
  • If you were poor, you might qualify for Car-aid, but few gas stations or repair shops would accept your coverage and those that did would look down on you as a low-life draining the system, even though all you want to do is get to work and buy food without walking 16 miles in a blizzard, up hill, both ways.
  • When you reached 62 or 65, you’d qualify for Car-care, which would cover repair and maintenance at the same rate, whether you owned an Escalade or a Prius.  Your repair shop would be prohibited from providing any extra or discretionary work on your car, even if you could afford it, and be subject to fines and/or imprisonment.
  • However, since you no longer had Auto Fuel coverage, you’d be back to paying $200 for a tank of gas, unless you had Car-care Gap Coverage, hawked by Mr. Bluewrench, dressed in knit coveralls, standing by the waiting room in a homey garage “for only $9.99 a month and you CAN’T be rejected.”

A Short History of Health Insurance-Part 2

I discussed the origins of our health insurance benefits in my last post.  This is how it all fell apart.

OOP Spending 1960-2014

Out Of Pocket Health Care Spending 1960-2014

By 1960 employer-sponsored health insurance plans covered 142 million people just waiting to be exploited. Congress and the states mandated coverage for health conditions, procedures and products, often because of lobbying efforts, not medical necessity. Out-of-pocket spending dropped from 48% of all health care costs in 1960s to 11.5% by 2009.  Annual health care expenditures rose every year, outpacing general inflation. We spent $27 billion in 1960, $888 billion in 1993 and $2.8 trillion in 2012. Everyone was happy playing with someone else’s money.

But there is only so much money to go around.

Medicare financing concerns surfaced early. In 1967, the House Ways and Means Committee predicted Medicare would cost $12 billion by 1990, an estimate 10 times too low.  Medicare expenditures were $98-110 billion by then (depending on who you ask), rising to $536 billion by 2012.

In 1992, the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) switched to the Resource Based Relative Value Scale (RBRVS) payment schedule, reimbursing hospitals a set amount based on Diagnosis-Related Groups (DRGs) rather than on length of stay or charges. Commercial insurers followed.  No one wanted to lose money so physicians discharged patients “quicker and sicker” than before. But the rate of growth in health care costs dipped only slightly before rising once again; insurance premiums quickly followed.

(c) 2009 Bob Conroy

(c) 2009 Bob Conroy

Health Maintenance Organizations (HMOs) attracted employers with large groups of mostly healthy workers, promising to control health care costs with “managed care.”  The reality, “managed cost,” created obstacles to potentially costly care with pre-authorizations, denials, and penalties for using “out-of-network” providers. The primary care physician became the beleaguered and much resented “gatekeeper,” pressured to forestall referrals or deny care outright. Patients and physicians rebelled, often resorting to litigation or ugly media campaigns forcing HMO administrators to approve payments for just about anything, including in-vitro fertilization.*

Private insurers eventually relented as well, but covered their losses by raising premiums every year. Employers who could afford to reluctantly went along; those who balked lost employees to other companies. Employers with a strong union presence—Pittston Coal, NYNEX, General Electric—faced expensive strikes over health care benefits.  Employees didn’t care as long as premium hikes or the full cost of benefits weren’t coming out of their pockets.  Large companies began to self-insure, taking their employees out of existing risk pools. Smaller firms dropped their policies, or in many cases, insurers dropped them.

The biggest blow to employer-sponsored health care benefits came in 1990 when the Financial Accounting Standards Board (FASB) ruled that, beginning in 1992, retiree health care liabilities had to be on corporate balance sheets, effectively reducing company assets and driving down share prices. The percentage of mid-sized and large firms offering retirees health care benefits went from 85.6% in 1980 to 37.1% in 2000.

KFF average premiums 1999-2013

Average Health Insurance Premiums 1999-2013
Source: Kaiser Family Foundation-kff.org

The dot-com bust in the late 1990s didn’t help.  Employers reduced benefit packages, increased the employees’ share of their premium contribution, or dropped coverage altogether as the economy suffered.  The percentage of employers offering health care benefits dropped from 80% in 1989 to 61% in 2013. Every year forty to fifty million people lacked health insurance. Health care premiums for a family policy almost tripled between 1999 and 2013, rising from $5,791 to $16,351. People expected health insurance to cover everything because it was so expensive.  Health insurance was expensive because people expected it to cover everything.

So how do we fix it?

*In 1998 the Supreme Court’s ruling on Bragdon v. Abbott that being HIV positive constituted a disability and inferred that infertility was also a disability since, at the time, HIV positive women were advised against becoming pregnant.  A similar ruling cost the City of Chicago $1.5 million to settle a class-action lawsuit brought by city workers demanding reimbursement for fertility treatments.