Essex column: We confuse insurance costs with actual health-care costs
In subway tunnels under downtown Rochester, Minnesota, leading from hotels to the Mayo Clinic, visitors can shop at stores that would fit comfortably in Aspen.
The shops — and the clinics — cater to wealthy patients and their families, including oil-rich medical tourists. For them, health care is simple: Find the best doctors and clinics and pay the bill, no worries about insurance or pricing. Maybe pick up a designer scarf or crystal candy dish on the way back to the hotel.
Thinking about this demographic drawn to Mayo’s stellar care and reputation, I understand how a billionaire might say, “Nobody knew that health care could be so complicated.”
For the rest of us, though, the American health-care system is opaque, expensive and at times infuriating. As the series “High Country, High Costs,” running this week in the Post Independent, shows, this is doubly true in western Colorado.
As the country goes forward struggling with health care costs and coverage, it’s important to understand that the Affordable Care Act didn’t cause the problems in the system. The way it has been politicized has put us further than ever from universally accessible, reasonably affordable health care.
Here’s why it’s important to understand this: Repealing the ACA will not make health care less expensive or less infuriating.
A lot of people have the erroneous impression that the ACA was responsible for everything that happened in the last seven years in an inflationary, consumer-unfriendly system. But the condition of our health-care system, with business- and household-crushing runaway costs and uneven access, was the cause of Obamacare, not the other way around.
We have conflated health care costs — what is actually paid to doctors, clinics, pharmacies and hospitals — with insurance costs.
In High Country, High Costs, William Lindsay, who chairs the Colorado Commission on Affordable Health Care, notes, “Everyone focuses on the insurance premium, because that is the bill they get every month. But the underlying cost is alarming.”
Long before Obamacare, the costs of doctor visits, tests, drugs, devices and procedures were out of control in an economic system that makes sickness a profit center.
The Centers for Medicare and Medicaid Services reported in 2015 that from 1966-82, average annual growth of health care spending was 13 percent. From 1983-92, it was 10 percent. In 2002, health care costs rose 14.7 percent, and another 13 percent in 2003.
Insurance costs rose to pay these dramatically escalating health care prices — and employers steadily increased the share of insurance costs that employees picked up. Meantime, the country continued to debate what to do about the uninsured — who actually increase costs for those of us with insurance because they cannot access preventive care and tests that provide early detection and end up being expensive emergency cases.
I’m like most Americans: My life was only nominally affected by the Affordable Care Act.
I’ve always gotten my health insurance through my employer, so I didn’t have to enter the individual market and buy a policy offered on a state exchange. I’m not rich, so I didn’t have to pay the tax imposed on those with incomes above $200,000.
The only way Obamacare directly affected me — and I suspect that this is the case for the vast majority of Americans — is that my former employer, Gannett, used it as a fig leaf to raise employees’ insurance costs.
The law in 2014 imposed a $63-per-employee annual tax on big companies. It was a three-year tax that declined each year. Gannett made sure to cite that tax as it raised our premiums for 2014 well more than $63, but our insurance costs had been rising annually for years.
Again, the ACA was not responsible for either health cost increases — those costs had risen for decades before — or insurance premium increases for most people.
For all the times you have read that the Colorado mountains have the highest health insurance costs in the nation, you likely didn’t know that those premiums apply only to about 12 percent of insured people — those who buy individual policies through the ACA. The rest of us, on Medicare or employer insurance, generally pay much less.
Our system masks health care costs from us and forces us to buy things without knowing the price.
In an effort to be a responsible medical consumer, I have skipped a few annual blood tests because I know that a $600 or $900 bill for routine bloodwork is gouging.
But when I had cancer in 2010, price was irrelevant to me.
It’s schizophrenic. We really can’t be expected to shop and barter when our lives are on the line and we are in emotional turmoil. Why should our care and future financial health depend on our employer rather than our government?
Caring for sick people and the least among us saves money in the long run — and it’s moral. Caring for children and providing prenatal care saves us money in the long run – and is moral.
When the millionaires and billionaires running the country visit a radiation waiting room or a pediatric chemotherapy center rather than a high-end shop on the way to a medical exam, perhaps they will drop the politics and see that health care, like education, roads and the military, is a public good.
Randy Essex is publisher and editor of the Post Independent.