Wednesday, July 01, 2009

Really Limited Coverage

If you think "derivative" trade was a major scam, wait until you examine the phenomenon in the insurance industry known as "limited coverage." A policy that costs only $250 per month and which promises up to $150,000 per year for hospitalization coverage sounds like quite a deal. And it would be, except for one thing: that $150,000 covers just room and board, not lab tests or surgical procedures. That part of the coverage information is buried in the minuscule print of the contract and presented in language so confusing that even hospital officials were taken in. One family learned just how bad a deal such a policy is the hard way.

From the NY Times:

Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.

And so, even as Washington tries to cover the tens of millions of Americans without medical insurance, many health policy experts say simply giving everyone an insurance card will not be enough to fix what is wrong with the system.

Too many other people already have coverage so meager that a medical crisis means financial calamity. ...

At St. David’s Medical Center in Austin, where he went for two separate heart procedures last year, the hospital’s admitting office looked at Mr. Yurdin’s coverage and talked to Aetna. St. David’s estimated that his share of the payments would be only a few thousand dollars per procedure.

He and the hospital say they were surprised to eventually learn that the $150,000 hospital coverage in the Aetna policy was mainly for room and board. Coverage was capped at $10,000 for “other hospital services,” which turned out to include nearly all routine hospital care — the expenses incurred in the operating room, for example, and the cost of any medication he received.

In other words, Aetna would have paid for Mr. Yurdin to stay in the hospital for more than five months — as long as he did not need an operation or any lab tests or drugs while he was there.
[Emphasis added]

As a result of that hospital stay, the Yurdins joined the ranks of those who had to file bankruptcy because of medical costs, even though they had health insurance. In retrospect, the Yurdins realized that the limited coverage policy was exactly the wrong kind of policy for Mr. Yurdin because he suffered from an irregular heartbeat and any kind of hospitalization would require procedures not covered by the policy. That, however, was not how it was marketed to him and thousands of other Americans who got suckered into similarly inappropriate plans. The sad part is that lemon laws don't apply to health insurance coverage.

Today, Mr. Durden doesn't have to worry about his health care coverage because he is now 65 and is eligible for Medicare, and that's where the lessons learned should be focused. Unfortunately, even the Democrats in the 111th Congress and in the White House don't see it that way. They have decided to frame the discussion in terms of insurance coverage rather than affordable health care access, and that makes all the difference in the world. It means that the insurance companies control the outcome, and their concern has nothing to do with health care, only quarterly profits. And that is why the "public option" is going to be so watered down as to be unrecognizable and totally useless and why the "single payer" system was deliberately kept off the table.

Depressing. Depressing and outrageous.

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Anonymous PeasantParty said...

Execellent article! IMHO, I think the politicians try to move the debate over by using word play. I feel that the real change will come when each entity is addressed separately and not hidden behind one catchall phrase.


Healthcare= Doctors, Nurses, Labs, etc.

Health Insurance= Coverage by the BIG three or four monolithic providers.

Big Pharma= Drugs, etc. Which are price regulated in every country except ours!

The Healthcare reform statements just don't appeal to me unless they include all of the above.

5:17 AM  

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