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Health Insurance Election Guide: Facts and Myths

Posted on Feb 12, 2016

With the 2016 election bearing down on us and politic rhetoric turned up to an unbearably loud volume, you’re going to hear a lot of talk about healthcare - why everyone needs it, why the current system stinks/is good/is just ok, and a lot of talk about “single-payer systems” and “socialized medicine.” Being simply a consumer of healthcare, chances are there’s a lot of information you don’t know and a lot of myths that are passed off as facts. We’re here to help you understand what the candidates are saying, and to dispel common myths in plain English.

Are “Single Payer Systems” and "Universal Healthcare” the Same Thing?

The short answer is no. A “single payer system” refers only to the number of payers - i.e. insurance companies - that exist. Almost all single payer systems refer to the government as the “single payer.” It simply means that one company pays for all health insurance across the country, regardless of who the payer actually is. A government-run single payer system is normally funded through taxes on the country’s citizens and businesses. A single-payer system would eliminate health insurance companies as we know them and radically alter how you pay for care, though likely not how you receive it.

Universal healthcare simply means that every single citizen of a country carries health insurance. Their insurance can be through private carriers (like Blue Cross or Tufts) or through the government (Medicare, Medicaid, single-payer systems).

Neither guarantees that your insurance will pay for 100%, or any, of your care. In most systems, you still have to cover a portion of your healthcare costs and there still are rules, regulations and premiums to abide by.

 

Do We Have A Health Insurance Problem?

No, we have a healthcare payment problem. Though the Affordable Care Act has done much to push America towards the laudable goal of giving everyone healthcare coverage, it has done little to nothing to address the massive payment problem that is built into the American healthcare system. Many consumers are lured into the system with the promise of low monthly premiums, only to discover that they are stuck paying a massive deductible that they potentially cannot afford. It’s a lose-lose situation - sacrifice available cash for high premiums, or get nailed on costs when something does happen and you need to use your insurance.

Health insurance is unlike almost any other insurance in that your employer in the government subsidizes part of the cost of it, unlike your car insurance or life insurance, which you shop for and purchase on your own. This gives hospitals, drug companies, healthcare providers, insurance companies and your employer a huge incentive to hide the true cost of healthcare, whether they do it on purpose or not. While you only pay $10 or $0 for a doctor’s visit, your insurance company is still paying the doctor for the visit, giving you the illusion that it is “free.” When it comes to drugs and surgeries the cost hot potato is even worse, with the true cost of anything obscured between layers and layers of regulations, insurance rules and more. Truthfully, the cost of some procedures can appear completely made up because hospitals are using it to cover the cost of other procedures that are not fully covered by insurance, private or otherwise, and it is simply the only way for the cost to be recouped.

The healthcare payment web is complicated and tangled and only getting worse. Some see single-payer government run healthcare as the way out, while others see vertical integration between health insurers and providers (hospitals, doctor’s offices, etc) as the solution. Others still want to give consumers the ability to shop for a healthcare plan like they do for auto insurance or life insurance. Are any of these the right answer? Nobody knows.

 

Medicare Cost Cuts Don’t Affect Patients

False! When Medicare cuts the amount they reimburse providers for giving you care, the effect of that trickle down to the patient level. Medicare already doesn’t cover 100% of the cost of some therapies, leaving us to recoup the rest from the patient or to eat the difference, either in the form of volume or simply as a loss. Often providers are forced to change what they provide to the patient. Many companies like ours were forced to switch from traditional oxygen tanks to portable home fill systems the last time around, which are great for many patients but difficult to use by those who need it most. Other times the effect is even worse, with companies going out of business entirely, leaving patients in the lurch to find their own.

 

Switching to a Single Payer System Would Automatically Cut Costs

The truth to this question is nobody knows the answer. While it will certainly lower the costs for some, it may raise the cost for others. Economists and politicians and “experts” can run all the models they want and say what ever they want, but the truth of the matter is no one will know what a single payer system will do for costs until people actually start using healthcare under the new system. A single payer system may completely change behavior patterns, or it may not. The simple truth it is only one possible solution to a very complex problem.

In conclusion, healthcare is one of the biggest challenges facing our society. With high costs and mass confusion among those inside and outside of the industry as to how the system actually works, patients always seem to end up on the losing end of changes. Though the path forward is uncertain, what remains clear is that something must be done before the situation gets truly out of control. With Americans health and lives at stake, and trillions of dollars flowing through the system on a yearly basis, the cost of doing nothing is simply too high to ignore.

To talk more, please connect with us on Twitter at @capemedical or @gmsheehan.