The Department of Health and Human Services released a report on the current state of health care in California, and the numbers are striking. It also can help us understand a bit about our budget woes.
19% of all Californians are uninsured, and of those, 71% are in families with at least one full-time worker. Employer-based coverage has dipped to just 54%, meaning the rest have to either go to the individual insurance market, qualify for a public coverage plan like Medicare or Medicaid, or go without. The top two insurance providers in California account for 44% of the health insurance market, and such a duopoly make it easy to just jack up rates year over year. The average family premium has increased 114 percent since 2000. And this causes families to drop coverage due to a lack of affordability. This nugget appears in the report:
“California businesses and families shoulder a hidden health tax of roughly $1,400 per year on premiums as a direct result of subsidizing the costs of the uninsured.”
But one other entity suffers from that hidden tax: the state budget. Health care spending by the state has increased well above the CPI, and Medicare and Medi-Cal spending have ballooned because the cost of health care has ballooned. Growing ranks of the uninsured and unemployed increase the numbers eligible for coverage under state programs, and one political party, at least, would rather offer those services instead of watching people die in the street. We hear at the federal level that health reform is entitlement reform; that’s just as true at the state level, as bending the cost curve will put state budgets in a better position for the future.
All of this adds up to create a sense of urgency in doing something about overhauling the broken health care system this year. This could have been the narrative that Dianne Feinstein brought forward in public statements, not hand-wringing about the difficulty of getting something done in Washington.
Several years ago, the Legislature, at the request of the insurance industry, did away with a host of group plans, making it more difficult to get insurance. Two examples follow.
Insurance companies used to sign up with large organizations to offer group health insurance to the membership. For example, the fellow who used to cut my hair belonged to an organization of barbers and beauticians. Most barbers and beauticians are actually independent contractors. They pay “chair rent” to the salons in which they work. This fellow, by virtue of his membership in the organization, was able to buy Blue Cross as part of a group without a medical exam.
The State Bar of California, to which all attorneys have to belong, also had a contract with Blue Cross so that any member could purchase health insurance as part of a group. The Los Angeles County Bar Association and the San Diego County Bar Association had similar arrangements with major health plan insurers.
When the Legislature stopped these arrangements, more and more people fell into uninsured status. I use the example of the barbers and beauticians to show that it was not just well-compensated professionals but regular working folks who could take advantage of this. So much for the progressivism of our Legislature.
In addition to not wanting to cover those who most need health insurance, the insurance companies spend a lot of time and money to deny claims to the people they’re supposed to cover. This may include denying a covered expense as has happened to me, or canceling a policy after a subscriber gets sick.
Insurance companies are in business to make money, not to provide health care.
They want our premiums only if they don’t have to pay for the care it’s supposed to cover.
This is no different than your auto or homeowner’s policy. If you don’t believe me, ask somebody on the Gulf Coast or in one California’s wildfire areas who had insurance. See if their house was rebuilt. Or how many years it took them and what they finally settled for.
I spoke to a Colorado attorney whose website I was writing. She specializes in this field and says it is absolutely the policy of every large insurer to deny as much coverage as they possibly can. It is how they make the obscene profits they use to lobby against increased regulations.