We don't need 'fun-sized' health insurance

We've all seen those little so-called "fun-sized" candy bars, those tiny, single-bite chocolates that are individually wrapped and come in plastic bags, usually in groups of 10 or 20.

If your idea of fun is spending more time trying to unwrap a single bite of chocolate than it takes to eat it, then you might find the label "fun-sized" to be quaint. Otherwise, we might forgive the marketing genius who coined that term, since the more appropriate label of "annoying-sized" would probably not sell very well.

"Fun-sized" candy bars is a good example of the practice of raising profits by putting less product inside a package (downsizing the product) while keeping the price the same. Other examples of downsizing include a bag of Peet's coffee now comes in 10.2-ounce bags, down from 12-ounce bags. The smaller size sells for the same price as the 12 oz. size, but you get less product. It's perfectly legal, but a sneaky way to raise prices.

But "fun-sized" candies and 10.2-ounce bags of 1-pound coffee is nothing when compared to what privatization has done to health care, something we might call "fun-sized" health insurance.

So, how does "fun-sized" health insurance work?

We should start by first examining the "wrappers." Like the candies, "wrappers" are fees you have to get through to get to the insurance product itself. With health insurance, the "product" is payment for some type of medical bill. That could be anything from a hospital bill, a payment to your doctor's office, or payment for medication.

The first "wrapper" in health insurance is the premium or payment that entitles you to use the insurance. That's the ticket that gets you in the door, it "allows access" to your insurance without actually giving the benefits. At best, it allows you to claim that you have health insurance.

But before the health insurance company pays any of the bills (the reason you have health insurance in the first place), they want you to pay a second "wrapper," called the deductible. The deductible is a feature unique to the health insurance industry. It means you have to pay your own medical expenses for a while before the insurance will start to pay them.

In fact, some plans offer you the option of higher premiums for a lower deductible. There may be some slight financial advantage to some people, but really this is no choice at all since either way the health insurance company is taking more money out of your pocket in exchange for . . . nothing in return.

So, after "unwrapping" our fun-sized insurance by paying the premium and "unwrapping" it again by paying the deductible, we're now ready to enjoy the benefits of having health insurance, right? If you said "no" to that question, then you probably have "fun-sized" health insurance and already know about the third "wrapper."

It's called the co-pay. By now, we're all familiar with it. That's the additional fee that you have to pay to get the health insurance benefits that most people use: doctor's visits and medications. Co-pays potentially have some benefit. By having people pay a small and affordable fee for a medical visit, co-pays can reduce some of the more frivolous reasons people make medical appointments. In theory, at least, that could mean increased availability of an appointment.

But then, co-pays on medications make no sense. If your doctor, nurse practitioner or other medical provider prescribes a medication they feel is necessary for your health, why should you have to pay an additional fee after paying thousands or tens of thousands of dollars to purchase a product designed to pay your medical bills? Do the non-medical administrators in the health insurance industry believe that doctors (or other medical providers) prescribe medications frivolously?

The other problem with co-pays is the amount charged. Some insurance plans require high co-pays, causing people to avoid seeking medical attention when they need it the most or when it could prevent a more expensive hospital visit later on. Some insurers make the co-pays on medication higher than the price of the medication itself.

After you've paid all those fees and filled out all the paperwork, you've officially "unwrapped" your insurance product and you can now enjoy your "bite" of insurance (although by now, you might feel that you were the one that was bitten). So, what are you actually getting?

Well, now your health insurance will pay for your doctor's visits and your medications. But if you're fairly healthy, you only need one or maybe two visits a year. Chances are, you've already paid for those visits out of your own pocket when you paid the deductible. Unless you need a procedure or an operation, your health insurance company doesn't have to pay any of your remaining medical bills because there aren't any. Even then, if you did have a procedure such as a colonoscopy, is the cost of the colonoscopy higher or lower than the cost of your insurance? If it's lower, then why did you pay for the insurance?

The answer to that question, of course is in the word "insurance" itself. You paid all that extra money in the event that you had a major medical problem requiring hundreds of thousands of dollars, money that you don't have sitting around in a bank account someplace – possibly because you've had to pay it out to the health insurance company over all those years.

"Fun-sized" health insurance has an answer for that as well. It's called a "cap." Your insurance company places a limit on how much money they will pay or reimburse you in any given year. If your medical bills exceed that cap, you will have to pay the rest out-of-pocket yourself. If you have a medical problem that requires expensive treatments or procedures over multiple years (such as many types of cancer), then your insurance company may drop you altogether.

For most Americans, privatized health insurance is an over-priced "middleman" that adds costs without adding value to health care. That's due in large part to their creative lobbying efforts in preventing Americans from having an alternative, such as a public option to health insurance. The only way private health insurance "pays off" (you get back as much or more than you paid) is if you should be "lucky" enough to fall into that "sweet spot" of having a medical problem that is more expensive than your combined premium, deductible, and co-pay and still fall under the cap. Congratulations, you are like one of those rare individuals who enjoys that single bite of chocolate in "fun-sized" candies.

If you would like to see the cost of your health insurance go down, a couple of bills before the NH House Commerce Committee this Thursday, January 26 at 10 and 10:30 a.m. that could make that happen.

HB319 would establish a committee to study an all-payer system of insurance for hospital services. This system currently exists in Maryland and has helped lower the cost of health care in that state at the same time it has helped smaller hospitals stay solvent.

HB353-FN would establish an interstate compact for universal healthcare. If enacted, it would share the administrative costs of health insurance with our participating neighboring states. Administrative costs are the biggest single reason for those high premiums and deductibles. They are also the reason for the complicated and often duplicated paperwork associated with health insurance.

If you wish to voice your opinion to the Commerce Committee, the link is here: https://www.gencourt.state.nh.us/house/committees/remotetestimony/default.aspx

James Fieseher MD, is a retired family physician from Dover.

Dr. James Fieseher

USA TODAY NETWORK