Wednesday, June 29, 2011

Health Insurance

When I went to work for HP in 2001, I was a bit startled at how poor its health insurance was (copayments, deductibles, and premiums) compared to the thirteen person startup I worked for in California.  I guess that I assumed that the economies of scale of having many tens of thousands of employees in the U.S. would help.  HP's problem was that it had a more normal age distribution of employees than was typical in startups, where most employees were between 25 and 45.  At HP, there were many employees above 45, and as inevitably happens, the older you get, the more things go wrong.

The State of Idaho's health insurance, however, is as much of a disappointment compared to HP as HP was in comparison to those startups.  My wife recently had to have bone spur surgery on her shoulder.  Blue Cross's preauthorization letter estimated that we were going to be about $800 out of pocket on this...and it now turns out to be more like $1700 for a procedure that turned out to be completely what the surgeon expected.  The various individual health insurance policies that I have looked at, which have high deductibles and high premiums, are still more costly than the State of Idaho's plan--but the differences are becoming less and less dramatic, the more that I see of our plan.

It's unfortunate that the combination of health insurers and labor unions has prevented any serious and radical reform of the current system, which ties health insurance to employment, and prevents interstate competition.  Instead, we get crony capitalist measures like Obamacare.  The June 27, 2011 Politico has an article about the consultants getting rich off Obamacare:

More than $300 million in exchange grants has already flowed into the states since the Affordable Care Act passed. That number will grow exponentially in the coming months, as states move from the initial steps of passing exchange legislation to the more lucrative task of setting them up.
For health consultants and information technology vendors, it’s already shaping up to be a gold mine.
State health exchange planning documents obtained by POLITICO read like a who’s who of top health consulting firms, with contracts awarded to health vendors large and small. Between Indiana and Washington state — two of the three states that have received grants to establish exchanges so far — Deloitte Consulting, Mathematica Policy Research, Wakely Consulting Group and Milliman all have received exchange-related federal dollars.

Read more:
UPDATE: It appears that the preauthorization letter estimate was only for the surgeon's bills--not the hospital.

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