What Are We Reforming?
A lady went into the hospital for a common type of surgery
. It was successful, and she received the bill for some $20,000 in just a few days. Her insurance was an 80-20 co pay policy, meaning she is required to pay 20% or $4,000. She paid her balance in full and assumed that the insurance company would take care of the rest. Months later, she received another bill for the balance. She also discovered that her credit rating had been lowered due the unpaid hospital bill, resulting in a substantial increase in the interest rate on her credit card.
She contacted the hospital to inform them that she had been erroneously billed, and was informed that the insurance company had not yet made the payment. Fearing that the company had found some excuse to not pay, she contacted her insurance company and was informed that there was no problem, and that payment had been approved and was to be sent within a few days. Explaining what had happened to her credit card company received assurances that as soon as the bill had been paid, she could contact them and they would lower her interest rate .
What the customer didn't know was that the insurance company had a policy that they would pay no more than $5,000 for an operation such as the one she had, and that the hospital had agreed to accept that amount as full payment. Because she had an 80-20 agreement she would be responsible for $1,000, making them responsible for the remaining $4,000. The delay in payment was ostensibly to review the bill. In reality, both they and the hospital knew how much would be paid.
Since the hospital had agreed to accept $5,000 as payment in full, the lady had paid an extra $3,000 for the operation, and received a drop in her credit score as a result. In addition, she had paid about $400 per month for her insurance or $4,800 in insurance premiums. The hospital made an extra $3,000 and the insurance company still made $800, just off that years premiums.
Had she been able to pay $650 per month, she could have gotten a policy with no co-pay. The Hospital would have settled for the $5,000 check from the insurance company, but the delay would have still caused her credit rating to drop. She would have paid in $7,800 for the year, satisfying the hospital and giving the insurance company a $2,800 profit for the year. She would still be out the $2,800 but she might accept that, as her health care expenses were actually $1,000 less than they were under the cheaper policy.
Had she had no insurance, however, she would have been liable for the entire $20,000, even though the hospital had defined the value of the surgery at $5,000 in their agreement with the insurance company. She would have been ripped off for $15,000 by the hospital. If she were unable to pay the full amount immediately, her credit rating would be destroyed, and she would be burdened with debt for years to come. The hospital will not drop their claim because to do so would expose their excessive charges and the agreements, destroying the insurance company profits, and reducing their income.
The above story is fictitious but it actually happens in varying degrees on a regular basis according to insurance insiders. One employee said this is what happens if they can't find some excuse for not paying at all, in which case the customer pays as if they had no insurance, the company keeps all the premiums, and the hospital gets the full overstated payment.
The Healthcare Reform passed by the House Of Representatives takes no action against such abuses of the public by hospitals and insurance companies. It requires that everyone purchase insurance, penalizing those who stay healthy, and perpetuating and expanding the abuse. The only provision that does not benefit the insurance industry appears to be the public option, which places insurance companies in direct competition with the federal government, at taxpayer expense.
The Health care reform bill also appears to offer no relief to pricing on medicines produced by our pharmaceutical companies. The same medicine can be sold in Canada or Mexico for one third the price, and it is illegal to bring them back across the border. Why? The excuse is that we are paying for the costs of development. Why should American consumers be charged more than other people, especially since many times the costs are partially or completely paid through government research grants. The taxpayer has already paid part of the cost of development.
It is not hard to understand the opposition of many to the proposed legislation. The only beneficiaries are the healthcare industry, who are already abusing the system, giving them a broader base of captive victims. I salute the congressmen who've stated that they can't support a bill which does not address some of these issues. Almost everyone desires healthcare reform. The problem is, this is not a reform. Nothing of value has been changed. The bill will increase personal expenses, and government costs, weakening the economy, with little or no benefit.
by: Donald Fishgrab
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