I don’t know any more details about Mr. Abbate’s specific situation than what was included in the article about the rally.  I don’t know if he has chosen to carry a private Medigap policy or Medicare D for prescriptions.  But I wonder if he’s aware of just how much a private health insurance policy would cost if such a thing were available.

Individual health insurance is available until a person reaches age 65, but the prices increase dramatically with age; people in their 60s pay substantially higher premiums than people in their 30s.  Statistically, health care costs increase with age, and it would stand to reason that if people could continue buying their own health insurance past the age of 65, the prices would continue to climb rapidly.

Out of curiosity, I ran quotes for a perfectly healthy non-smoking, 64 year old male living in Pueblo.  The premiums for my hypothetical client ranged from $123/month for a bare-bones, $10,000 deductible policy with 50% coinsurance, all the way up to $1,788/month for a very comprehensive, 100% coverage HSA plan with a $1,200 deductible.  Most of the popular policies were in the $300 – $500/month range.

I’m not able to run quotes for an 80 year old, but obviously the premiums would be significantly higher for an 80 year old than for a 64 year old, if such policies existed.  Even if Mr. Abbate has chosen to have the very best Medigap and Medicare D coverage he can get, my guess is that his combined monthly premiums for his health insurance is a fraction of what it would cost if he were buying all of his health insurance from private carriers.  I wonder if he would still be saying “If I can’t afford health care, that’s my problem…” if his only option were to purchase his own policy at 80 years of age?

Individual health insurance is a great option for people who are healthy, and especially those who are relatively young.  For people who are self-employed, it’s a good alternative to higher-priced group of one policies, and it gives people the flexibility to pursue entrepreneurship without being tied to employer-sponsored health insurance.  But the price increases with age, and many early retirees find it a challenge to pay for health insurance during the years before they are eligible for Medicare.  My guess is that even if private individual policies could be purchased by people over the age of 65, very few people would take that option, simply because of the price.

How can we most fairly spread the total cost of care for all Americans across the whole population?  Should sick people pay more than healthy people?  Should overweight people pay more than their slender neighbors?  Should a family with six children pay more than a family with one child?  Should older people pay more than younger people?  Should people with higher incomes pay more for their health care than lower income families?  These are the sort of questions that address the issue of how to fund our current high-priced health care.  And they are a huge part of the reform debate, including all the discussions about mandatory health insurance and guaranteed issue coverage.

But value in health care is another cost issue, and one that I don’t believe has been adequately addressed in the current health care reform bills.  Earlier this year, we had to call a plumber to have some work done in our bathroom.  He did a great job, and our total bill came to $165, including parts.  A week later, our son caught his finger in a door, ending up with a pretty severe cut.  We took him to the emergency room (unfortunately it happened after the lower-priced urgent care center had closed for the evening) where he had an x-ray and got three stitches.  We’ve started to get the EOBs from Humana, and so far the total amount that we’re expecting to be billed is over $1,400 (that’s after the network negotiated discounts, and there are likely more EOBs to follow).

We have an HSA qualified policy with a $5,000 deductible, so we’ll be paying the whole bill for our son’s finger ourselves.  But that’s not really the point.  Regardless of whether a bill is paid by the patient or by the health insurance company, we all need to be asking ourselves whether we’re really getting a good value for our money.  When the average household income in America is just over $50,000 a year, does it make sense for a cut that requires three stitches to cost more than $1,400?  Health care spending in the US is 16% of our GDP, which is dramatically out of proportion with what other countries spend.  And all of those dollars being spent on healthcare aren’t available to be spent on other things like education and quality food and clean energy.

Both the plumber who came to our house and the PA who stitched our son’s finger performed a very necessary service for us.  Both are highly skilled in their areas of expertise, and we’re grateful for the work that they did.  But was the work that the PA did ten times more valuable than that of the plumber?

Perhaps the question we should be asking is not who should be paying for healthcare, but rather, why in the world are we paying so much in the first place?  Health insurance premiums will continue to rise as long as health care costs do the same.  It won’t do any good to try to address premiums without first figuring out why we’re paying so much for our health care in the first place, and doing something about it.

Anthem charges the same premiums regardless of whether a policy is new or has been in force for several years.  A 40 year old, healthy, non-smoking male who purchases a policy this month will be paying the same premiums as a 40 year old healthy non-smoking male who has had an Anthem policy for ten years, assuming they both live in the same zip code and have the same type of policy.  Because of this, it’s relatively easy to compare Anthem’s rates – even after rate increases go into effect – with those of other carriers in Colorado.  The rates being offered to new Anthem clients include the rate increases that went into effect in January.

To get an idea of how Anthem’s prices compare with other carriers, I got quotes for a family of three, living in the Denver metro area, for a high deductible, HSA-qualified policy with 100% coverage after the deductible.  These plans are relatively easy to compare, as they tend to be quite similar from one company to another.  I looked for policies with a $5000 or $6000 family deductible (most companies offer one or the other, but not usually both), or something in the middle of that range if neither exact number was available.

Here’s what I found, from several of the top carriers in the Colorado individual market:

• Cigna = $325 (for a $6000 deductible)
• Anthem Blue Cross = $377 (for a $5000 deductible)
• Humana = $402 (for a $5000 deductible
• Kaiser = $441 (for a $6000 deductible)
• Assurant/Time = $449 (for a $5700 deductible)
• United HealthOne (Golden Rule) = $461 (for a $5800 deductible
• Aetna = $481 (for a $6000 deductible)

Obviously this isn’t comprehensive data.  I only got quotes for one family, using a single zipcode.  Factors like pre-existing conditions, tobacco use, zipcode, and plan design all have an influence on premiums.  But these numbers would seem to indicate that while Anthem’s rate increase may have been large, it seems to be in line with what other carriers are charging in Colorado.  For the little test I conducted, Anthem’s premium was the second-lowest I found, and the only one with a lower premium had an additional thousand dollars in out of pocket exposure.

I’ll be curious to see what the Division of Insurance comes up with when they re-evaluate Anthem’s 2010 rates.  My guess would be that they will approve the rates.  If they don’t, it would stand to reason that they will have to also re-evaluate the most recent rate increases for all of the other carriers in Colorado too.

The poll found that although people were generally concerned about people who are uninsured, there was little consensus in terms of approval for the health care reforms that congress has worked on over the last year, and people – especially those with high incomes – were worried that health care reform would make their own situation worse.

The fact that 75% of people with health insurance are happy with their current coverage gives a clue as to why there has been so much protest surrounding the reform debate.  When people are happy with their health insurance and hearing a lot of noise from lawmakers about reforms, it’s natural for them to be concerned that their own coverage is going to change.  I think that if people were generally unsatisfied with their current health insurance, the reform process would have been less bumpy.

Nearly 60% of American get their health insurance from an employer.    This accounts for a large portion of the American people, and they are somewhat insulated from the rapidly rising cost of health care and health insurance.  In addition, they generally don’t have to deal with issues surrounding pre-existing conditions.  Employer-sponsored health insurance has large premium increases just like individual policies do, but employers typically shoulder a chunk of the increase, softening the impact on employees.  However, the percentage of people who are covered by employer-sponsored health insurance has steadily declined over the last decade, and more people than ever are having to fend for themselves when it comes to getting coverage.  Perhaps this explains the general sympathy towards those who are uninsured.

The big problem – as usual – comes down to money.  People want to keep their current health insurance and also extend coverage to those who are uninsured, but would prefer to do it without paying additional taxes or health insurance premiums.  Something’s gotta give.  We’ll have to wait and see what congress comes up with next week during their summit with the president, but there’s no way they’re going to make something out of nothing.  In order to provide health insurance for everyone, we’ll either have to give up some freedoms (in the form of a mandate requiring everyone to carry coverage) or pay a little extra in taxes or premiums.

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When we consider mandates, the result is generally higher premiums for everyone, and a greater benefit for the collective population – but not necessarily for each member of the population.  In states where health insurance is guaranteed issue, there is absolutely a benefit for people with pre-existing conditions, but there is also a tremendous cost in terms of higher premiums for everyone in the state.

In Colorado, lawmakers tried to pass a bill this month that would have halted new mandates for a year, but it died in committee last week.  This was followed closely by the passage of a bill introduced by Diane Primavera that will make medically necessary oral chemotherapy a covered expense on health insurance policies.  Primavera had introduced a similar bill in last year’s legislative session, but it didn’t pass.  This year’s version is likely a less costly mandate, since it includes the stipulation that the oral chemotherapy must be medically necessary in order to be covered.  The focus of this year’s mandate was on saving lives, whereas last year’s bill was intended to expand treatment options and make life a little easier for cancer patients.

As soon as the Colorado legislative session got underway last month, there were several bills introduced that focused on health insurance.  It’s easy to see injustices in the health care delivery system, and it’s natural to want to remedy them.  When we see a person suffering from ill health and also struggling to pay medical bills, it’s easy to understand how lawmakers want to mandate more comprehensive health insurance coverage for everyone – nobody should be bankrupted by medical bills or have to choose between getting treatment or having a place to live.

But the cold reality of money is hard to ignore.  The fact remains that every time we mandate additional benefits for health insurance coverage, we drive premiums up for the whole population.  And that invariably results in some people – who may have been right on the brink of being able to afford coverage in the first place – opting to go uninsured.  Which perpetuates the cycle of increasing costs for everyone in order to cover provider losses incurred in our overflowing emergency rooms.

But what if we tried to find a middle ground between those who would like to see every health condition fully covered by health insurance and those who can only afford basic premiums (and thus basic benefits)?  Maybe we could implement a system whereby all policies had to have a deductible of at least a certain amount – a minimum out of pocket.  We could eliminate policies with very low deductible and copays, but do so gradually, with annual deductible increases.  As out of pocket expenses increased, premiums would decrease.  Of course one of the problems with high deductible, low premium policies is that people often don’t have money saved to cover out of pocket expenses when they have a claim.  I can see a few ways around this.  One, we could allow anyone – regardless of what type of health insurance they have – to open a tax advantaged health savings account (HSA).  The money deposited into the account would be tax deductible, and would be available when medical expenses arose.  A second option would be to create “forced” savings accounts and payroll deduct a small amount of money – sort of the way we do now with things like social security and Medicare taxes.  This money would be held in an account in the employee’s name, and would be available if needed for medical expenses.  If it were not needed, it would belong to the employee upon retirement.  To be fair, these accounts should be tax deductible too, and could be waived if an employee showed proof of having their own HSA.  A third option would be a low-interest loan available from the government to help people pay their deductible.

I’d like to see a compromise between people who have health insurance that covers everything with very low out-of-pocket exposure, and those who have minimal coverage and huge financial exposure in the event of a serious illness.  Most of the very high end policies are group coverage, and are usually funded in large part by employers, which means that a lot of people truly have no idea how expensive their health insurance is.  And a mandate that increases coverage and cost is likely to be felt more by the employer than by the employee.  But it will be felt especially hard by people who pay for their own health insurance, with no help from an employer.

We cannot continue to just tack on more mandates that increase health insurance benefits without addressing the inevitable premium increases that will follow.  We absolutely need to address the problem of people facing staggering bills when a medical condition is not covered at all by their health insurance, but if we continue to add mandates without looking for ways to bring down costs, we’re only going to push more people into being uninsured.

This is a great idea, and hopefully will one day become a reality.  Cost comparison for medical procedures is difficult at best, and sometimes impossible with our current system of proprietary rates.  People who have comprehensive health insurance that only requires a copay at the doctor’s office and a deductible for more comprehensive procedures, might not be aware of the vast differences in pricing from one hospital to another - even under the same health insurance policy.  People with high deductible, HSA qualified policies are probably more interested in the actual cost of care, but likely find it difficult and cumbersome to shop around in our current system, especially if they are already sick and in need of care.

A statewide database of prices would be a great step forward in terms of transparency.  If people could look at two hospitals in the Denver metro area and see that one is charging 50% more than another for the same procedure, it would at least be a good starting point for a discussion about value in health care.

It makes sense that a cost comparison database might have to focus on relatively straight-forward procedures that can be priced with a reliable degree of accuracy across a large number of patients.  But more complicated procedures (which presumably vary in price from one patient to another, based on potential complications) could also be included by looking at a hospital’s history of such procedures and average charges.  Or the procedures could be broken down into their components (for example, the anesthesiologist’s fees, the operating room charges, the inpatient medications, etc).  The way I see it, the more procedures, details, and hospitals that are included in the database, the better it will be.

It’s hard to have an effective dialog about costs and cost-control when the average person has no idea what the costs actually are, and no realistic way of finding out.  EOBs are great, but they only come after a person has received treatment, and thus aren’t particularly useful in terms of comparison shopping.  Kefalas’ bill would be a good step towards transparency in health care costs, and I hope it is well received.

But I felt that one of their points needed to be addressed because it could be a little misleading.  They note that 40% of Colorado residents have an income of less than $43,000 for a family of four, and that these families simply cannot afford health insurance, as the price of coverage for a family of four is “approaching $15,000″.  The authors note that families simply cannot afford to pay more than a third of their income for health insurance (I agree).  But that $15,000 figure is based on the cost of guaranteed-issue group health insurance.  Individual and family policies that are purchased without going through an employer are much less expensive.  And even when a family has group health insurance, the employer usually pays at least part of the premiums – it is rare to find a family that is actually paying $15,000 a year for their health insurance.  (People on COBRA are paying the entire cost of their group health insurance premiums, but they make up a small segment of the population).

My concern when I see articles noting that the cost of family health insurance is in the $13,000 – $15,000 range is that people might be so discouraged by those figures that they simply give up and opt to be uninsured without looking at what their options really are.  My husband and son and I will pay just over $4000 this year for our health insurance (we’re self-employed, so we pay the full cost of our health insurance ourselves).  True, we have a high deductible, HSA qualified policy that wouldn’t work for everyone.  But it’s perfect for us, and the premium is a fraction of the figure that often gets tossed around when people talk about family health insurance premiums.  If we opted for a more comprehensive policy with office visit copays and a lower deductible, we would still be paying roughly $7000 or so in annual premiums.

For families that are relatively healthy, there are lots of options for health insurance that they can purchase on their own.  The premium will likely be quite a bit less than the numbers that get mentioned in most articles that discuss the cost of health insurance.  I hope that people don’t see those numbers, assume that they can’t afford coverage, and give up without looking at all of their options.  We’re still three years away from most of the benefits of health care reform, and that’s a long time to be uninsured.

All three of these changes sound good at first glance, but the first two are not as cut and dried as they sound.  Ending gender-based pricing in the individual market would likely result in lower premiums for women, but higher premiums for men.  In Colorado, men are more likely than women to be uninsured, and raising their prices would almost certainly mean that more of them would drop their coverage.

Adding reproductive services also sounds like a good idea, but it depends on how much it would increase premiums, as many people already struggle to afford their health insurance.  For people like me, who choose to have homebirths with midwives, would we be paying for maternity coverage and still paying out of pocket for our midwives?  Would people who choose to adopt or not have children be forced to pay for maternity coverage?  Would people who would rather have a high-deductible, HSA qualified policy still have to pay for maternity coverage?  There are a lot of questions around this topic, and I still haven’t seen any solid data indicating how much health insurance premiums would increase if reproductive services were included on all policies.  Group policies in Colorado are required to cover maternity care, and the premiums are far higher than individual policy prices.  But group policies are also guaranteed issue, and it’s hard to tell how much of the premium difference has to do with underwriting and how much has to do with things like maternity care being covered on group plans and not on individual policies.  Currently there are only a handful of individual carriers in Colorado that offer maternity coverage (Rocky Mountain Health Plans, Assurant, and United Health One), and with all of these carriers, the addition of maternity coverage makes the policy significantly more expensive.  Obviously the premium difference wouldn’t be as dramatic if the coverage price were spread across the whole population via a mandate, but I am concerned that it might not be a small rate increase.

The bill that would require standardized EOBs does have my support, as does any legislation that would make health insurance benefits and claims information easier to understand and compare.  Anything that can reduce the amount of time that medical offices and consumers spend trying to figure out benefits and claim information will ultimately make our health care system more transparent and efficient.

If you have an opinion one way or another on these or any of the other bills that were introduced this week, now is the time to contact your representative.

His website has a summary of reforms that are included in the bill the Senate passed last month.  The removal of lifetime limits on health insurance benefits reminds me of Nathan Wilkes and his family, for whom this legislation can’t come soon enough.  The standardization of benefit explanations and medical bills will benefit just about everyone, since wading through paperwork is rarely considered fun.  The removal of pre-existing condition limitations will mean that more people can take the leap into self-employment without being tied to a group health insurance policy (of course, in order for guaranteed issue coverage to really work, everyone has to be in the health insurance pool, not just sick people).

But I’m a bit hung up on item number 7.  Free preventive care – no copays for screenings, check-ups, and vaccinations.  Sounds good, but we all know that nothing is free.  The fees for the services will still be there, we just won’t be paying them at the time of service.  Perhaps premiums will increase to cover more preventive care.  Perhaps taxes will increase so that the government can subsidize care.  Maybe fees for other services will increase in order to offset the cost of preventive care.  However they get around it, we’ll still be paying for it.  My concern is that if all policies have cover preventive care with no copays, that limits choice and flexibility for people who would rather pay lower premiums for their health insurance and pay for their own preventive care (via an HSA or other personal funds).  And what would count as preventive care?

We have sometimes had clients who prefer to pay additional premiums in order to get a health insurance policy with good preventive care.  For them, there are policies in the individual market (like the Anthem Blue Cross Blue Shield Lumenos HSA) that offer great preventive care.  But other clients prefer to have lower premiums and pay for their own preventive care on an as-needed basis, or to utilize services like the 9Health Fair.  Flexibility and options are a major advantage of individual health insurance, but I’m concerned that by mandating preventive care benefits with no copay on all policies, premiums will rise to offset the cost.

In Colorado, a similar law took effect last week, requiring health insurance companies to cover various preventive care at the level of the policy co-insurance.  It will be interesting to see how this law impacts both premium and health in Colorado over the next few years.  Will more people seek out preventive care?  Will we be healthier as a result?  Will our health insurance premiums increase even more than they already do?  We’ll have to wait and see.

Dr. Austin’s dental practice is offering the HIV testing for free, but she pointed out that if a dentist isn’t offering the test for free, patients would have to pay out of pocket, as dentists cannot currently bill health insurance companies.  There is a medical code for HIV testing, but it isn’t recognized if it’s submitted by a dentist.  This doesn’t make much sense, but I’m sure that there’s a combination of inertia and turf wars between dentists and primary care physicians blocking the way for dentists to be able to bill a patient’s health insurance company for an HIV test.

The CDC webpage about the OraQuick (OraSure) test doesn’t specify a cost; it simply states that the fee will be determined by the manufacturer and the lab that performs the test.  I imagine it’s relatively inexpensive, otherwise dental offices wouldn’t be able to offer it for free.  But anytime a test is covered by health insurance, more people are likely to get the test (think of mammograms and paps).  Even if the cost of the test is only counted towards a patient’s deductible (as might be the case if the patient has an HSA qualified plan, for example), just knowing that it will be billed to the health insurance company might make a patient more likely to get the test.  In addition, billing the test to a health insurance company is likely to result in a lowered final price for the patient based on network negotiated rates.  All around, it makes sense for dental offices that provide HIV screening to be able to bill a patient’s health insurance company for the test.

David Williams’ article was included in Grand Rounds last week.