The Insurance Warrior News -- Employers and insurers: Dangerous Liaison?

[Justin]

Insurance Warrior News
12/2/10

Employers and insurers: Dangerous Liaison?

I recently happened across an article entitled, "Tax breaks for employer health plans a target." The article continues:
"Job-based health care benefits could wind up on the chopping block if President Barack Obama and congressional Republicans get serious about cutting the deficit."

Really? I may just be in favor of this.

An accident of history

Sometimes, when things have been a certain way for two or three generations, we come to believe that they have always been that way, they have to be that way, they can be no other way.

Once upon a time, slavery was considered to be the way of life and business in the United States. It had been that way for generations, it was impossible to imagine any other way. We can look back on slavery now, and say, "It was a terrible idea. The world's worst idea."

It is a pure accident of history that, in the United States, health insurance came to be hooked up with employment. In my estimation, it is a terrible idea, and one that doesn't have to be.

Lose your job, lose your insurance

Can anyone think of reasons why having your employer provide your health insurance might be a bad idea?

I have been fighting lifesaving appeals for five years. I just won appeal #66. If you can't think of any reasons why having your employer in charge of your health insurance is a bad thing ... I can. I have seen this unholy alliance wreak havoc on the lives of people who are ill, and on their families.

When your employer provides your health insurance ...

• If you lose your job, you lose your health insurance.
• You have to work when you are sick, or you will lose your job, and you will lose your health insurance.

Is this not insane? It just doesn't add up. Who is it that decided that people should lose their health coverage if they are too sick to work?

How exactly are people supposed to continue working ... after they have a fourteen-hour cancer surgery, or they have a bone-marrow transplant, or they are paralyzed on one side from a stroke. Health insurance should not be dependent on one's ability to work, because being sick (i.e., needing one's health insurance) often makes one unable to work.

When your employer IS your insurer

But it gets worse. Insurers have quietly been promoting the living daylights out of "self-funded" plans. If you haven't gotten the message from me yet ... in a self-funded plan, you give up most of your rights, and your employer is granted divine rights over your life and death.

These self-funded plans are such sweet deals for insurers ... without you knowing it, they have infiltrated employer-based group insurance all over the country. Two-thirds of the employed people in the United States now have self-funded plans. In my experience, zero percent of these employees know that they have a self-funded plan, or what a self-funded plan means.

Does it sound like perhaps insurers may not want you to understand what you are getting into, when you choose a self-funded plan?

When you have a self-funded plan ...

• The money to pay for your medical treatments does not come from the insurance company. It comes directly out of your employer's bank account. The insurer has hoodwinked the employer into assuming financial risk for your medical treatments, and doing the dirty work of denying those treatments.
• Your employer has sole decision-making power on all of your benefits. In other words, your employer gets to decide whether or not your child gets a heart transplant. Heart transplants can cost in excess of $1 million.
• In a self-funded set-up, the insurer magically changes itself from an insurer to a "third-party administrator." Therefore, your state's insurance regulations no longer apply to them.
• Your employer is not an insurer, either. The only law that governs self-funded plans is federal law (ERISA). Good luck calling the Department of Labor about your denial of treatment. You could appeal it, but you would need to hire a lawyer to navigate the ERISA system. Plus, it could take a year to win it. Good luck with that.

How do insurance companies get employers and employees to sign up for this bad deal? It's easy ... the costs of a self-funded plan are less for the employer, and the monthly premiums are less for the employees. For that, you are essentially selling your life to the company store. Penny wise, and pound foolish.

Of course, many of us have to submit to a self-funded plan, because it is all that our employer offers. Wait a minute ... what about all of that choice and competition and free market economy that was supposed to bring down the cost of health insurance? With employer-based health insurance, we often have no choice.

How does this self-funded thing play out in real life? Employees who are desperately ill with cancer find themselves fighting their insurers AND their employers when treatments are denied ... all the while fearing that they may lose their jobs, and their health insurance.

Guess what happens when an employee puts too much of a drain on a self-funded system? A longtime friend of mine worked for a company for twenty-three years. She had two bouts with cancer while working there, plus other chronic health problems. The company laid off forty-seven people at once, including my friend; forty-two of them had had expensive cancer treatments while working there. Coincidence?

In what universe is this a good idea? It is not only cruel, but ignorant. Who decided that Boeing or Microsoft or Acme Widget Company is qualified to decide whether or not you need brain surgery ... or to get rid of you if you need too much brain surgery?

There has to be a better way

One of the goals of the Affordable Healthcare Act (Is your healthcare any more affordable since it passed, by the way?) was to reduce the number of uninsured people in the United States.

Since the Affordable Healthcare Act passed, the number of uninsured people has risen by at least 2.8 million. Why? Because they have lost their jobs. In March of 2009 alone, 320,000 people lost their jobs, and became uninsured. COBRA lasts but a short time, and they will soon have no insurance. What can the Affordable Healthcare Act do about that, as long as health insurance is tied to employment?

What about those "risk pools" that many states have, where the "uninsurables" among us (that would be most of us) can get insurance? Last time I checked, the monthly premium in my state for a 50-year-old non-smoker was $986 per month. Does that fall under your definition of "affordable" ... particularly if you are applying for it because you lost your job?

And so, I find myself in the strange position of agreeing with the GOP on this one. By all means, let's cut the several hundred billion dollars in tax cuts that are given to employers for making medical decisions, side-stepping state insurance regulations, and taking away our health coverage just when we need it the most.

Employers have no business offering health insurance, administering health insurance, paying for medical treatments, or deciding about medical treatments. An employer should have ultimate power over our jobs -- not over our lives.

Someday, we will look back on this system of employer-administered health insurance, and say, "How could anyone ever have thought that was a good idea?"

Holiday cheer and peaceful Insurance Warrior-ing,

Laurie Todd
The Insurance Warrior

[KBear]

Very good read, thanks for sharing. I just received my annual "Merry Christmas your premium is going up $100/month on Jan. 1 letter" from my insurer last week.... not through a job though.

[Justin]

Very good read, thanks for sharing. I just received my annual "Merry Christmas your premium is going up $100/month on Jan. 1 letter" from my insurer last week.... not through a job though.

Isn't nice, Kathy? Somehow the insurance companies have "flown under the radar" and are not the bad guy. It's amazing that insurance companies can directly dictate one's health care; unfortunately, the days of "physician-lead" health care are over.

Many patients come in the clinic and walk out with a plan of action that requires them to "circle around the block to cross the street" so that their insurance company will cover the cost. Ultimately patients suffer at the expense of insurance company profits--we deserve better--and should be outraged that insurance companies have so much power.

[Cindylou]

Isn't nice, Kathy? Somehow the insurance companies have "flown under the radar" and are not the bad guy. It's amazing that insurance companies can directly dictate one's health care; unfortunately, the days of "physician-lead" health care are over.

Many patients come in the clinic and walk out with a plan of action that requires them to "circle around the block to cross the street" so that their insurance company will cover the cost. Ultimately patients suffer at the expense of insurance company profits--we deserve better--and should be outraged that insurance companies have so much power.

Justin, I couldn't agree more. It should be against the law! There is nothing right about it. I wish all the doctor's and future doctor's could stand up and revolt and all the people would follow them, and we would drop our insurance policies like hot-potatoes, and just pay dollar for dollar for service rendered at the doctor's office. Even for 1 month, if that were to happen, the insurance companies would sink! And maybe look long and hard at "whose in charge here?" NOT YOU, MR. BIG SHOOTER PANT'S INSURANCE MAN! YOU'RE FIRED! Okay, I can dream, can't I? I realize my plan has many flaws, ya think? lol For one, it doesn't address catastrophes, but the system that is in place is just plain wrong, and I am outraged about it!

Laurie's monthly update, on the other hand, always a fresh, inspiring, thought-provoking read. Cindylou

[KBear]

I so agree with both of you. What always puzzled me is that you get charged more by the doctor/hospital if you don't have insurance, which means that you probably can't afford it..... this makes about as much sense as charging higher interest to non credit worthy people (so they are higher risk, so lets loan them more money and charge more-genius)

The main benefits I see to employer based coverage is that because of some of the anti discrimination laws, they have to cover things that self employed policies don't cover. For instance, in the state of TX I have been told by every health insurance dealer and insurer that there is no such thing as a self employed maternity policy- doesn't exist. If you or your spouse doesn't have insurance through a job, then you don't have maternity coverage. Because of this, myself and countless others, who have insurance mind you (to the tune of $1,000 a month for a family of 4 for me), are faced with paying out of pocket for all pregnancy related costs. I've had BCBS of TX and/or Unicare of TX with all 3 pregnancies and while everything is filed on them to see if their will be payment, but the claims are always denied. Luckily, since this is such a common scenario with so many self employed people, OBGYNS and hospitals/birthing centers offer cash payment discounts. You basically set up a payment plan where you will have paid for the entire thing in full by the time you give birth and then cross your fingers and hope there are not complications. who have coverage through a job.

[Cindylou]

I so agree with both of you. What always puzzled me is that you get charged more by the doctor/hospital if you don't have insurance, which means that you probably can't afford it..... this makes about as much sense as charging higher interest to non credit worthy people (so they are higher risk, so lets loan them more money and charge more-genius)

The main benefits I see to employer based coverage is that because of some of the anti discrimination laws, they have to cover things that self employed policies don't cover. For instance, in the state of TX I have been told by every health insurance dealer and insurer that there is no such thing as a self employed maternity policy-doesn't exist.If you or your spouse doesn't have insurance through a job, then you don't have maternity coverage. Because of this, myself and countless others, who have insurance mind you (to the tune of $1,000 a month for a family of 4 for me), are faced with paying out of pocket for all pregnancy related costs. I've had BCBS of TX and/or Unicare of TX with all 3 pregnancies and while everything is filed on them to see if their will be payment, but the claims are always denied. Luckily, since this is such a common scenario with so many self employed people, OBGYNS and hospitals/birthing centers offer cash payment discounts. You basically set up a payment plan where you will have paid for the entire thing in full by the time you give birth and then cross your fingers and hope there are not complications. who have coverage through a job.

Kathy, wow, I had no idea.

[bigdogchief76]

Great read!

I too have an increase in my premium starting Jan 2011 due to the wonderful "Act"

That doesn't change the fact that Aetna has bird-brained policies.

My employer has been really good about cutting insurance plans when enough employees say "enough".

I spoke with a senior level HR rep yesterday and got some intel that indicated that my employer is considering it's options with Aetna. It doesn't help me now, but, if changes come, it's some satisfaction.

MB