Commentary: 5 Ways To Fix Health Care

I believe that there are only two types of people who profess their enduring approval of Obamacare - those who are covered by Obamacare and are receiving generous subsidies and cost sharing, and those who are not covered by Obamacare at all but side with the underlying politics that ushered in this law.

When Obamacare was first passed, I lost my health care. Twice! I didn’t lose access to health care, though. When and if Obamacare is repealed, there will be those who lose their health care, but they should not lose access to a new plan.

If we could take politics out of the discussion to “fix” health care, we might be able to make some progress, but health care and politics are inextricably linked. I’ll jump in, politics aside, and offer my list of the top five things that must happen:

1. Price transparency.

The cost of insurance does not drive the cost of health care, it’s the other way around. I believe the health-care consumer must make decisions based on real competition among providers (doctors, hospitals, pharmacies, etc.). What other product do we purchase where we do not know and can’t really even ask the price before we buy it? When was the last time you picked out a new car, drove it home and then waited for the bill to come in the mail to see how much you spent? Never. But that’s what we do with health care.

How much is this going to cost?

A few years ago, my wife decided that, because of a family history of colon cancer, she should get a colonoscopy. She was 46 years old at the time, and our health insurance would pay for a colonoscopy as preventive care only after the age of 50. Because of this, the procedure would be subject to our deductible, which was $5,000. I had a colonoscopy myself about a year before, and insurance paid for mine as I was over 50. The total charge for my procedure was about $1,200.

I was reasonably expecting the cost to be about the same as mine, so $1,200 was what we budgeted. As a precaution, we called the facility and the doctor, to inquire as to how much the total charge would be. They responded that they couldn’t tell us exactly because it is dependent on how much the insurance company allows.

When the procedure was done, our total bill was $2,400. This was because the facility my wife’s doctor preferred charged us $1,800. My doctor had charged $800. The rest of the bill was split between doctors and the anesthesiologist.

Had I been able to get an honest disclosure that the cost would be double if we used this doctor and location, we would not have scheduled the procedure there. I would have looked into her using my doctor and facility.

After the procedure is complete, you have very little leverage to negotiate. So, we paid the bill.

I propose that every provider of health care - including pharmacies - should be required to present a menu of all services with exact prices, presented in a clear and concise manner, readily viewable by the general public. Full and binding quotes prior to a procedure would also be required. These would be prices that are in no cases higher than insurance company network pricing. With this level of transparency, you would be able to make true consumer-based decisions on where to receive your care.

Price transparency was actually mandated by the Trump administration two years ago. The health care industry’s response? An online listing of endless prices and billing codes that offered nothing useful to the consumer. In today’s heated partisan environment, the effort has since stalled.

In addition, a complete review should be conducted of what drugs, such antibiotics, are not sold over the counter. If more prescriptions were sold on supermarket shelves, prices would plummet.

2. Insurance companies should be able to design any type of plan and underwrite the applications.

Do you think you should be able to wreck your car, call a car insurance company, buy insurance and then say, “By the way, I need immediate repairs on my car?” Most people would think that’s ridiculous.

But how is that different from allowing someone who has pre-existing conditions to purchase health insurance, with the requirement that the insurance company cover those pre-existing conditions immediately? Other than the fact that we’re talking about one’s life instead of a replaceable object like an automobile, there’s really not much difference from a business perspective.

In 2010, before Obamacare, in my state of Tennessee, a 40-year-old husband and wife with two kids could buy a major medical plan with a $,5000 deductible for $262 per month. Today in 2020, a plan with a $8,150 deductible for that family who doesn’t qualify for a subsidy is $1,187 per month. That’s a difference of $11,100 per year in premium and $3,150 in out-of-pocket costs. Guaranteed issue policies are the reason for the cost increase.

We must allow insurance companies to design the health insurance plans they offer for sale, let the consumers choose whether they want to buy them and permit the insurance companies to underwrite the application. Only then could we have true competition among companies.

3. Healthcare.gov could survive with a government option for those with a pre-existing condition.

Most people get their health insurance from an employer group plan, and pre-existing conditions are covered with continuous coverage. Those with a significant pre-existing condition, and not working for an employer that offers group coverage, must be afforded access to coverage. However, their risk pool must not be combined with those who purchase underwritten policies.

A separate risk pool with some government backing would be needed. The government option could be similar to Medicare, but it should have premiums that reflect the fact that this is a high-risk pool. Everyone should have some skin in the game.

I have a daughter who was born with cerebral palsy. She has not been eligible for any individual plan in Tennessee (pre-Obamacare) due to her pre-existing condition. From the time she was born until today, at age 21, there has not been one day that has passed where she was without coverage.  She always had access to coverage and we never let it lapse.

Insurance companies that underwrite policies will try and dump anyone with a slight pre-existing condition on the government option. This would need to be addressed.

4. Americans must accept the fact the health care costs money and they have to pay for it.

We all expect to pay for the goods we consume, except for health care. “The insurance company should pay it,” is our default position.

We must get in the consumer mindset when it comes to health care. We must accept the fact that medical bills should be no different than food, transportation expenses or new shoes. Is health care a right or privilege? My only position is that since it’s not free, we all should expect to pay for our care in the form of insurance premiums and deductibles or to the provider directly. If we approach health care as a commodity and turn doctors, hospitals and pharmacies into competitors for their services, we will see lower prices.

5. Everyone must have a deductible and access to a health savings account.

I believe everyone must have a stake in the health care dollars they spend. I would propose that no one could have a deductible less than $1,000 (not many do any more) and there should be no doctor copays before the deductible. If everyone pays the first $1,000 with pretax dollars, ($5,000 if they opt for a higher deductible) and providers are required to disclose price, we would have nothing short of a complete transformation on how health care services are priced, delivered and consumed.

Rick Dixon is owner of Rick Dixon Insurance Services, an independent agency in Brentwood, Tenn. He has been in the insurance business for 24 years. Rick may be contacted at [email protected].

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