For their letter to the editor in the November 18th issue, I need to applaud the courage of my neighbors Lucy Benjamin and Clifton Page for their energy and resolve to face their responsibility to provide health care for their family. This is a microcosm of why we need to convert our health care payment system from an insurance model to a single payer system.
Most of our health care is provided by and paid for by the governmental systems. These systems are Medicare, Medicaid, S-CHIP and the VA. The remaining expenses are paid by individual patients via insurance premiums to insurance companies and or out of pocket until there is no more money in the pockets and bankruptcy then takes its costliest toll. Those of us with state sponsored health care are very pleased with the service we get and with our contributions to those systems. They are funded by taxes and by additional premiums of a very small quantity compared to private commercial insurance.
Approximately 65% of americans with insurance coverage have commercial health insurance. For that protection they pay the highest rate in the world for this coverage. Fully a third of the premium dollars that Clifton and Lucy will pay is for expenses of the commercial insurance company that have nothing to do with the delivery of health care services. Approximately 3% of their premium will go to the agent who helps them choose a policy for their family. The next roughly 20% goes to cover the administrative costs of the insurance company such as sales marketing and administrative work including those who do only approving or denying care that a health care provider deemed pertinent to their care. Another 10%, likely, will go to the costs for hospitals and physicians’ offices of dealing with the expense brought on by the insurance industry for denials of care, prior approvals and tracking down coding interpretations for accurate payments. This means that Lucy and Clifton are paying $8.085.76 of their premium for work that is generated by and for the insurance companies. (http://fixithealthcare.com/pdf/Richard-Master-Letter.pdf)
Administrative function consumes one-quarter of US hospitals’ budgets, twice as much as in other nations: Health Affairs study http://www.pnhp.org/news/2014/september/bureaucracy-consumes-one-quarter-of-us-hospitals%E2%80%99-budgets-twice-as-much-as-in-ot
Hospital administrative costs in eight nations published in the September issue of Health Affairs finds that hospital bureaucracy consumed 25.3 percent of hospital budgets in the U.S. in 2011, far more than in other nations.
This example of health care coverage and payment needs to change and why a statewide single payer system is likely to work to provide all of us with the financial solution that is best for all of Maine. My thanks to Lucy and Clifton for sharing their story.
From their letter their costs and change in cost this year to next are:
Premium in 2016 = $2,021.44/ month or $24,257.28 per year
Deductible in 2016 = $10,000
Premium for 2017 = $2769.14/month or $33,229.68/year
Deductible for 2017 = $14,300
I hope to provide more examples of the systems that need to change and why a single payer system will be agreeable to the majority of our citizens.
Kind thoughts and thanks to Lucy and Clifton.
East Blue Hill