Health Insurance Tracks Cost Of Medical Care. BS.

Check out this quote I saw on CNN this morning (story: Crush of cancer, medical bills snares family):

“Health insurance premiums track directly with the underlying cost of medical care,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, which represents 1,300 health insurance carriers in the United States. “As the cost of providing care increases, premiums increase accordingly.”

My first thought was THIS IS AN ABSOLUTE LIE.  Okay, now that I”ve settled down, it is not a lie.  It is the truth.  A warped truth.  Let me share my thoughts.

Everyone knows that the spokesman for America’s Health Insurance Plans is going to, indeed HAS TO, talk about things in a light that is positive for America’s Health Insurance Plans.

Understand that that is some kind of organization (association?)  that represents insurance carriers.  Lots of them.

Don’t read it wrong – this is not an organization for for AMERCIANS, it is an organization for the insurance carriers.  These are the same carriers who are essentially screwing hundreds of thousands of Americans, like the family in the CNN article I got it from.

Got that?  Okay, had to get that straightened out, lest we think America’s Health Insurance Plans are the good guys.

Having said that, let’s go back to the quote.  He says “health insurance premiums track directly with the … cost of medical care.”

That was what I thought the lie was.  Based on my summer, with a birth and a surgery, I could not believe the overhead and price inflation caused by insurance companies.   You can read about it on my JibberJobber blog, but understand that the hospital bills for the birth of my kid were about 60% discounted because we were self-pay, and we paid up front.

In other words, because we bypassed the health insurance system we were able to avoid 60% of the cost.  Unbelievable.

This alone helped me understand why medical costs are so high.  Not because of the fancy/expensive GE equipment, not because of the Dr.’s Porsche collection, but because the health insurance system is sooooo screwed up.

Let’s go back to the statement: “health insurance premiums track directly…” Okay, now I realize this is not a lie.  This is 100% accurate.


Let’s change the sentence and add one concept:

“health insurance premiums track directly, with a factor, …”

In other words, they have to put their profit in there.  Unfortunately, we the people have to pay for the inefficiencies.  Ask anyone who is involved in medical billing, or office admin, in healthcare and you can get an earful of such inefficiencies.

So perhaps the cost of health care is this:

medical costs (Dr, hospital, supplies, etc.) * (Insurance company Profit + percentage of gross inefficiencies introduced by insurance model)

Thanks for the great quote Mr. Spokesperson.  I wish, instead of defending your constituents lame position, you could help work on fixing the inefficiencies before the gov’t does it for you.

I’d really like for insurance companies to clean themselves up.  We’re good with you making a profit… no problem there.  But Oh My Flipping Gosh (OMFG), do you have to add so much cost to my medical procedures?  Seriously – 60% of the cost of my wife’s hospital stay?

That. Seems. Criminal.

I wager that health insurance companies won’t be able to fix it (except the rogue ones, the small, nimble ones, hopefully).

I hope that Obama can move enough things forward so this gets fixed (and not replaced with another nightmare of a problem).

Otherwise, my future major medical expenses will be taken care of outside of the United States.  Not because I want to, but because “the system” prevents me, and millions of others, from getting appropriate health care.

7 thoughts on “Health Insurance Tracks Cost Of Medical Care. BS.

  1. Kate

    Thanks for this, Jason. My COBRA premiums are set to triple in January, and it’s going to get ugly really quick if I don’t find a job. I am glad someone besides me is tearing their hair out!

  2. Jacek

    I wonder what you mean by “outside” of the United States. Do you mean Mexico? (LOL, good luck with that new age crap). How about somewhere in Europe. Well let me tell you I’ve been to Europe, on more then a few occasions (not to all countries), and the places I have been to have had HORRIBLE health care!

    I am originally from Poland, but have lived in the US for the past 23 odd years (yes I’m a US citizen), and I would get on a plane and fly to the USA if I was deathly ill instead of going to a public hospital in Poland, Germany or Britain.

    The ONLY reasonably decent health care you will get in those countries is from private hospitals, but the vast majority of those have no ER services just appointment based treatment/surgery which you pay for out of pocket. Why you might ask out of pocket? Well taking Poland for example, there ‘public health care plan’ is so drastically under funded and corrupt that they only cover upto a certain number of ER surgery’s per hospital per year! That will be Obama’s plan, everyone with heath care which doesn’t work at all.

  3. In the12

    Thank you, Jason, for your poignant article. And to Jacek, what Europe are you talking about? Eastern, (third-world) Europe? You might want to generalize less about your knowledge of healthcare in Europe. No one would seriously compare Polish healthcare to American healthcare.
    I am an American ex-patriot. I have first hand experience with the healthcare systems in the US, Canada (lived there for 13 years) and France which is where my husband and I now live. My husband and I have had better care here than in the US. No ER services, you say? Pay out of pocket for surgery? You make me laugh. Even when we first immigrated to in France and were not yet on the national health care insurance, we didn’t have to pay up front when my husband was hospitalized for pneumonia. The hospital billed our US insurance and accepted the amount paid. After we got on the national insurance, and I had a serious bicycle accident, the emergency centre at the nearest hospital admitted me at once (no waiting) and treated me with the same medical expertise, equipment and technology that you find in the US. By the way, we live in very rural France, where there are far fewer doctors than in large cities. Yet I am able to see my primary care physician in one day and a specialist in usually a week—sooner if it’s an emergency. But do try some of those wonderful public hospitals in the US; do you know anything about the DC General Hospital? It closed in 2001; it rated right up there with what you described in Poland.
    Gee, I guess we can compare Polish healthcare to American healthcare.

  4. Kathy

    Hi, Jason,

    What a hot button!

    Not so long ago, I read an lengthy article in the Tacoma News Tribune, written by an Canadian surgeon who immigrated to the U.S. to practice medicine because of the regulated surgeries in Canada. He told how patients often die before getting surgery because they wait for years for a surgery, government regulation of how many surgeries can be performed, limits on the number of surgeries a doctor can perform in a month/year, and so on. For regular medical care not requiring surgery, care was adequate to good, he stated.

    I have also talked with an airline flight attendant who has been to many other countries, and she basically said the same things as Jacek.

    In Japan, patients in hospitals only receive the food their family brings them. A flight attendant was hospitalized there, and her crew had to provide her food on each trip to Japan until she was discharged.

    I one could say the quality and cost of medical care depends on where you live in the world…and how deep your pockets are.

    I do hope President Obama comes through with a better medical care program for the U.S. I am tired of paying exorbitant costs, and seeing my daughter and her family with two young children go without medical and dental care because they work in blue collar jobs and do not have money left over for self pay, insurance, or anything. They go without. To me, that’s criminal too.


  5. Freedom Thinker

    I got something completely different from the article.

    Don’t read it wrong – this is not an organization for for AMERCIANS, it is an organization for the insurance carriers. These are the same carriers who are essentially screwing hundreds of thousands of Americans, like the family in the CNN article I got it from.

    I got that the insurance company probably broke even if not incurred a loss for the people in that article. Not that insurance companies screwed these people. Now obviously the people in that article and the author tried to paint that picture but they just end up painting themselves like cowardly suicidal victims.

    “Ask anyone who is involved in medical billing, or office admin, in healthcare and you can get an earful of such inefficiencies.”

    As somebody in the health profession this is and isn’t the case. Such things like medicaid and medicare which pay piss poor have to be made up. This is made up by charging insurances more. The government won’t fix this they are the cause. Also, inefficiencies come from medical malpractice claims. We live in a litigious society my Doctor’s better go above and beyond to avoid suits. Medicaid and medicare don’t pay for this above and beyond. We pass those costs to insurance carriers.

    I hope that Obama can move enough things forward so this gets fixed (and not replaced with another nightmare of a problem).

    I think as much as Obama is in the pocket of the insurance companies and pork barrel spenders on the Hill there isn’t a chance this is getting fixed. Just look at his pork barrel spending to date. He couldn’t even dent unemployment with spending 700 billion. Unemployement continues to rise. Now he’s going to spend 1 trillion on health care will there be a different result. Nope. Not that the Republican’s have any better options. This isn’t a problem that Government can fix.

  6. reinkefj

    My observation on the upcoming “Obama-care” where the gooferment will become — in quick order — my “insurance company”. (Yeah, I know what they say. But, I think it’s going to be “Medicare for everyone”. To paraphrase Judge Judy, “I wouldn’t believe you …” (i.e. a congress critter; any politician) “… if your tongue came notarized!”

    If my insurance company screws me, I can go to the gooferment for relief. If the gooferment aka my insurance company screws me, to whom do I go to for relief? To the gooferment’s courts?

    Just take my screwing and shut up!

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