Health Care: Our Concerns

We, at the Encumbered believe we can fix our health care system, but first we need to line up some of the pieces of this “jigsaw puzzle.” We need to consider a few concerns and to review some of our institutions.

Large group employers are defined as companies with more than 100 employees.  The national average of family health insurance coverage for large group employers is approximately $8,000.00 per year.  The average cost of family health insurance coverage for small group employers (those with under 100 employees) is significantly higher – more than double in many cases.  Most uninsured working Americans are employed by small group employers, which is where we must focus our attention.


  1. Insurance companies are financial institutions, and like any financial institution, their income is in part based upon the volume of dollars that they manage.  To reduce this volume is not in their interest.  To reduce the volume of dollars that flows through their system would result in a decrease in profits, a decrease in dividends, a decrease in executive compensation, and a decrease in employees.  To solve our health care crisis is not in the interest of any health insurance company.
  2. When the cost of any problem is removed from our responsibility, we no longer practice the same thriftiness as we would if the money came out of our own pockets.  How many insured patients actually go over a hospital bill?  If you had to pay the $36 charged every time a warm blanket was placed over you in the recovery room, how often would you let the nurse change it?
  3. Insurance is supposed to spread the financial risk when something out of the ordinary occurs, such as being in a car accident and needing treatment.  A routine office visit is not out of the ordinary, it is a common event.  By making it eligible for insurance reimbursement we have tripled the cost.
  4. Insurance can be a financial incentive to create a lawsuit.  People like the concept of “found” or “easy” money and “passing on” or “spreading” the cost.  Gratuitous lawsuits drive up the cost of insurance to the point that many people can’t afford the premiums. To rectify this situation, some form of tort reform is necessary.

About Medical Coverage:

Medical coverage can be extremely confusing. There are many variations of coverage which include:

  • hospital expense insurance
  • surgical expense insurance
  • regular medical insurance
  • major medical expense insurance
  • comprehensive medical insurance (combining all of the above insurances)

These are the five standard types of health insurance that cover the cost of treatment associated with an illness or an accident. (see: kinds of health policies)

A national standard of health care does exist: Medicare Part A & B.

We need to accept and use this national standard, not only for retired persons, but for all.  If we were to take the time to examine the differences in policies between every state, we would never make any forward progress.  Medicare may not be perfect, however our priorities need to be focused on first adopting a standard of coverage and finding a way to make the program affordable!

Medicare Part A generally covers inpatient services – medical care when you’re checked into a hospital or are recovering in a nursing facility.  It also covers some short-term home health care, along with hospice care.  Most people are enrolled automatically in Part A when they reach age 65 and get it for free.

How much does Medicare Part A cost?

Medicare Part A is free for the vast majority of people over 65.  But if you or your spouse worked and paid Medicare taxes for less than 10 years total, you will have to pay a monthly fee of $233 or $423 per month (for 2008). How much you will have to pay depends on how long you or your spouse worked and paid into Medicare

Medicare Part B is medical insurance rather than hospital insurance. It helps pay for:

  • physician services
  • outpatient hospital services
  • emergency room visits when you are treated and released
  • outpatient surgery
  • diagnostic tests
  • clinical lab services
  • outpatient physical therapy
  • speech therapy
  • medical equipment and supplies
  • rural health clinic services
  • renal dialysis
  • other health services and supplies

The cost of health insurance works differently in each state. There are three basic rating systems:

  1. Age: A 59 year-old-single may be required to pay a monthly premium of $400.00 whereas a 29 year-old single may pay only $150.00. As an employer, one is not inclined to pay 70% of the older employees premium.
  2. Composite age rating system: If you have three employee ages 24, 36, 48, the average age of your group is 36. If you hire another 48-year-old, this would really drive your premiums up.
  3. Average cost system: In New York, the cost for a single person age 59 is the same as the single person age 29.

State insurance commissioners define what will be a covered medical illness. Hence, coverage provided by Blue Cross is no different than Aetna’s medical coverage.

If Aetna covers it, then Blue Cross covers it, as does every other medical provider in that state, as long as we are comparing commercial coverage to commercial coverage within a given state.  However, every state has differences from every other state.

Translating Workers’ Compensation to Medical Tort Reform:

Industry answers to the Occupational Safety and Health Administration (OSHA) when it comes to workers’ compensation.  We must create a similar organization to police the medical industry if we are going to retrofit the current workers’ compensation system to our health care program.  In the event a medical provider is guilty of malpractice, an OSHA-type commission needs to be empowered to investigate and revoke the provider’s license if necessary.

Questions / thoughts / ideas:

If doctors had no malpractice premiums, could a person afford  medical care for routine services without insurance ?  If not, what will it take?

If we subsidize a medical practice by subsidizing the cost of medical equipment (such as X-ray machines), can we get the cost of routine service down to where it needs to be?

In effort to further reduce the cost of routine medical service. should we consider subsidizing the cost of medical schools.

Will “Health Information Systems” reduce the cost of health care?

Has anyone even mentioned tort reform? Has your doctor ever repeated a medical test on you without good reason?  What percentage of medical providers abuse the system?

“Health Information Systems”can make the medical community more efficient.  They can make fraudulent behavior more difficult if there is someone trying to detect fraud.  However, if someone were trying to detect fraud they probably wouldn’t need a “Health Information System” to find it.  So who benefits from the proliferation of these “Health Information Systems?” Well, the health insurance companies are off the hook and the creators and operators of these systems will be making a lot of money!

Dear Reader,

Solutions are ideas that evolve. We are not an expert in every facet of government. Your ideas, comments, questions and experiences us develop these solutions. Please continue to submit your qualified insights.