State of Mankind

A New Way Of Thinking

The Other Healthcare Scam

In talking to a friend about yesterday’s post on how healthcare legislation incentivizes cost increases, he brought my attention to another part of this issue.  The government describes the law as follows:

…insurance companies will be required to spend 80-85 percent of premium dollars on medical care and healthcare quality improvement, rather than on administrative costs starting in 2011.  If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.

http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html

My friend brought my attention to the fact that his company’s health insurance went up drastically this year, and they also started a rebate program for people who will accomplish some fitness goals.  Nothing against fitness, but come on, this is a joke!  It looks like a fitness program probably qualifies as a “healthcare quality improvement” program.  This would mean in raw math that our $100 of payment of which $70 went to the doctor and $30 went to the insurance company last year has, in this case, done just as we suspected, only in a slightly different way.  Now the payment has increased substantially, we’ll say to $120 just for fun of which $24 is allowed to the insurance company, probably about $75 to the doctor and $21 goes to the “healthcare quality improvement” program, from which the insurance company gets the rest of what it needs, and passes the rest back as an “earned” rebate.

I’ll grant that I don’t have exact numbers and I don’t have “smoking gun” evidence that this is what has happened, but if it smells like a rat…

The bottom line is simple.  When we legislate community action and self interest is involved, the self interested simply use it as a way to cause the entire community to act in their own self interest.  We get our pockets picked just about every time.  They even start a rebate program to give us back a portion of what was taken so we’ll feel good about it.  Where do I sign up for free market healthcare, which went away years ago with, oh yeah, low prices?

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  1. johnb

     /  April 23, 2012

    This is certainly alive and well at my school district. Our insurance has been covered at no monthly cost to us the whole time I have worked here, yet beginning next insurance year, August, we will be charged at least $100 per month, unless, of course, we complete 3 fitness points, then the $100 monthly cost will be waived.

    Even more ridiculous is the various ways one may gain these points. It is equal, for example, to walk a 5k or to run a marathon! With each new restriction put in place, there are equally weaselish ways to beat the system.

    Now, realise tha I have never complained about having healthcare premiums covered 100% through my work, but I have always felt I would rather have the money they pay and purchase my own insurance (if desired). Including having a baby last year among othe things, our total hospital bills still woul not come close to the amount paid in insurance. This is why many younger Americans have ELECTED (in the past) to not even have insurance.

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