subject: Healthcare's Got Baggage [print this page] Several years ago, when a tank of jet fuel was selling for roughly the same price as the Hope Diamond, Southwest Airlines humble fleet of 737s was able to taxi down Americas runways completely immune to the musings of OPEC and the rest of the oil cartel.
While its chief competitors were tacking on fuel surcharges, never-before-now baggage fees and snatching back bags of pretzels, Southwests stock price flew higher while its operating costs sank lower. Southwest is still the low price leader today in spite of its refusal to charge for extra bags, limit snacks and the like. Whats more, it doesnt look like their fuel prices will spike anytime soon.
Long before the airline industry saw the current economic slump coming, Southwest executive management signed what amounts to an insurance policy against fuel prices. The hedging bet reportedly saved the company $4 billion since the late 1990s and assured the airline it would never pay more than a certain amount per gallon for a specific period of time.
With ideas percolating around the halls of Congress about how to fund a massive Public Option and/or non-profit insurance exchange as part of its
healthcare reformpackage, there is now talk about patient convenience fees and something else that may raise an eyebrow or two among the nations big insurance companies --- an insurer excise tax on group premiums.
The Association of Federal Health Insurance Organizations (AFHIO), the consortium of insurance companies that provide health insurance to members of Congress and most other Federal employees, warns that insurance premiums would go up and benefits would be cut because of a proposed insurer fee, to be imposed next year, and an excise tax on premiums above a certain amount, which would take effect in 2013.
"The annual insurer fee would lead to increased premiums, and in order to avoid the excise tax, plans would be forced to reduce benefits," reads a report the AFHIO addressed to the White House --- er, I mean, to one of its top customers --- recently.
But the Senate Finance Committee tells everyone to calm down.
"Everyone knows reports bought and paid for by the insurance industry don't provide the reliable information Americans need on health-care reform," Erin Shields, the Committees press secretary, said. The latest "report analyzes the effects of only two provisions without taking into account the many key pieces of the bill, like incentives for better, more efficient patient care, increased focus on prevention and new policies that simplify health plan administration. In contrast, when the independent, nonpartisan economists at the Congressional Budget Office analyzed the entire bill, they concluded that premiums for large groups, like people in [the Federal Employee Health Benefits Program], will decrease by up to three percent after decades of increases."
Just like no one could have truly predicted what nine-eleven and our current economy has done to turn the airline industry into a nickel-and-dime-our-customers-to-death enterprise, no one can accurately predict what national healthcare reform will do to our health insurance premiums. The devil, as they say, is in the details and the details arent fully worked out. So it sure doesnt help when health insurers pick a fight with Congress in public, threatening to cut their healthcare benefits in an effort to save a buck or two.
The fact is, insured Americans are already subsidizing a portion of the costs to provide affordable healthcareto those who arent. Our ever-rising insurance premiums are proof. The rest of the tab is paid for by those who go to the hospital and pay ten or fifteen times as much as they would at the drug store for an over-the-counter pain reliever.
The only sound advice we can follow is this: The insured and uninsured should strap in and prepare for a turbulent flight until health care reform, in one of its forms, finally circles and approaches the law books. At the same time we will also open our wallets and hand the government more money, as we always do in situations like this, with our eyes firmly closed while braced for a landing.
