Thursday, February 10, 2011

Stupid Politician Tricks

Continuing the "stupid trick" theme, it seems the folks in DC don't have a monopoly on stupidity. Apparently this affliction is contagious as there are signs it is spreading outward from Washington and infiltrating the 57 states.

First up, from the land of fruits and nuts, California Senator Noreen Evans has decided it should be illegal for a health insurance company to deny coverage to someone who is currently incurring a claim.

It seems the senator had recently learned that a woman who is already pregnant cannot purchase health insurance for the express purpose of paying for her claim that is already in progress. Just because Medicaid will cover a pregnant woman, Sen. Evans thinks health insurance companies should share in the joy.

Without coverage through work or on a partner's plan, expectant moms face paying exorbitant prices for necessary prenatal care and delivery procedures. The American Pregnancy Association (APA) estimates that the cost of delivery alone is $6,000-$8,000, and that's for a normal pregnancy. High-risk pregnancies and hospital stays can tack on thousands.

The $6000+ figure is certainly in line with what I have seen, but then at the other end of the spectrum a complicated birth can easily run in excess of $100,000 for delivery and post-natal care.

I had a client a few years ago that wisely purchased health insurance BEFORE she got pregnant and ran in to trouble in her third trimester. Her pregnancy triggered a life threatening blood disorder requiring multiple transfusions at $10,000 each. Total bill for her care, some of which was in ICU, was close to $160,000.

Her plan paid all but the deductible.

So how much does Sen. Evans think the premium should be if carriers were required to literally "buy" a claim of this magnitude?

The APA estimates that approximately 13 percent of women who become pregnant each year are not insured, often resulting in inadequate prenatal care, which can lead to complications for the mother and child.

Why should health insurance companies shoulder the burden for a lack of planning and responsibility on the part of the woman? What if all insurance worked this way?

You would then be able to buy insurance on your car AFTER it was stolen or your home AFTER it catches fire.

Heck, you could even buy life insurance AFTER you are dead.

Apparently Sen. Evans isn't the only nut in the Golden State, Assembly-person Fiona Ma thinks it is unconscionable that Medicare and health insurance companies should require patients to pay a percentage of the cost of their medication instead of a nominal copay.

Melanie Rowen, an MS (multiple sclerosis) patient uses a drug that costs $700 per month to help control her illness. According to the report, Ass. Ma thinks that is outrageous.

Her insurance classified it as a specialty tier drug, also known Tier 4. That means she pays 30 percent of the cost of the drug rather than a simple co-pay.

Oh if only everything in life could be a "simple copay".

Need 4 new tires?

Just a simple copay.

Need a new roof?

Just a simple copay.

So, how much additional premium should the insurance company be allowed to charge to cover drugs that can run a few hundred to several thousand per month? I have a very good friend with two daughters that have Gaucher's disease.

Their medication, when they can get it, is $2,000 per dose.

Some cancer medications run $5,000 per dose and more.

Specialty tier pricing started under Medicare Part D. Michelle Vogel is executive director of the Alliance for Plasma Therapies and has been tracking the impact.

"Whatever happens with Medicare typically follows in private insurance, so when I was looking at the private plans, and especially in California, you're seeing the majority of plans, have put in Tier 4 plans," said Vogel.

So Medicare is to blame for this, not the bad insurance companies. It's about time someone else took the heat.

Ma is proposing legislation in California to prevent health insurers from moving vital medications to Tier 4 status.

"What we're trying to do is make ensure that patients are able to afford the medication they need.

And in doing so is making sure health insurance premiums go even higher.

Where is the logic in that?

Copays are one of the main driving force in rising health insurance premiums. For the most part, the public has no idea how much health care really costs, nor do they care.

As long as they can see a doctor or fill a prescription for less than $50 what do they care?

And that is the problem that leads to increased utilization and higher total spending on health care.

If everything in life were a copay where would we be?

McDonald's and Burger King would go out of business while Ruth's Chris would flourish. Why would anyone eat at a burger joint when any meal was only a $15 copay?

Copay's make the consumer stupid. They have no idea how much things really cost and there is no incentive for them to learn or try to save money.

Right now, New York is the only state with a law preventing specialty tiers. Ma plans to announce the specifics of her legislation on Thursday. However, state legislation does not impact self-funded health plans which cover about half of all employees with health insurance. Federal legislation is needed to change that.

The author of this piece, and possibly the other players in this article, need to brief themselves on the provisions of a federal law called ERISA.

ERISA, a law that has been on the books for over 35 years, allows self funded health insurance plans to bypass state mandates on most provisions which in turn leads to lower premiums.

Just another stupid politician trick.

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