Forty-seven million. That, according to the U.S. Census Bureau, is how many people in the United States have no health insurance. It’s a number that no politician is comfortable with and is the main reason why so many legislators believe the government should step in and “do something,” a thought shared by a growing percentage of voters.
But who are the uninsured and, more importantly, why don’t they have health insurance? It’s a question the Blue Cross and Blue Shield Association asked in a February 2005 analysis of the Census Bureau’s “Income, Poverty, and Insurance Coverage” report.
One of the most interesting statistics is that about a third of the uninsured – 34 percent – are already eligible for some type of government program but just haven’t signed up. So the government could wipe out a third of the problem simply by letting people know about its existing programs. I wonder if the government would be more successful at this if it solicited the help of insurance agents to spread the word.
Another third of the uninsured – 32 percent to be exact – could probably afford health insurance if it was a little higher on their priority list. These people live in families with household incomes of $50,000 or more. So why isn’t health insurance a bigger priority for them? Beats me. People have their own reasons for doing – or not doing – something. Perhaps they just need to be educated. Maybe they need a good kick in the butt. Either way, it’s not our job as taxpayers to take care of them.
Another 14 percent of the 47 million people without health insurance, according to the analysis, are temporarily uninsured. They are between jobs and are uninsured for a short period of time. These individuals would probably do well to bridge the gap with a short-term health plan, but we really don’t need to worry about them.
And that brings us to the last group – the long-term uninsured who make too much money to qualify for a government program but too little money to afford health insurance. They represent about 20 percent of the uninsured, or about 10 million people. That’s still a staggering number, but given that there are 300 million people in the U.S., it’s hardly a crisis – certainly not big enough to turn the entire system upside down.
A hard look at the statistics shows that the current system, one in which the government and the private market share the responsibility of covering our citizens, is working pretty well. The government should be doing a much better job of enrolling people in public programs like Medicaid or SCHIP if they meet the qualifications, but the private market also could do some things to make health coverage more affordable.
The insurance industry’s answer to rising costs is to get members more involved in their healthcare decisions. This solution – consumerism – consists of anything that helps people with health insurance behave more like consumers. The idea is that when people are responsible for a portion of their healthcare costs, they will make better decisions than they would if they were shielded from the cost of care by upfront copayments.
Consumerism is much more than just a plan design, although that is an important component. Removing the copays and making members responsible for the full cost of care certainly gets their attention.
But if we want people to truly behave like consumers, we need to give them the tools to make informed decisions. Another key component of consumerism is accurate information, commonly referred to as transparency. It seems unfair to ask people to shop for health services without first giving them the data they need.
While significant efforts are under way by federal and state legislators to improve the amount of quality information available to healthcare consumers, cost transparency is gaining more attention. Initial industry efforts have centered around publishing provider charge levels, but many people are beginning to recognize that true cost transparency is based on the actual rates carriers pay network providers. This information has historically been difficult to obtain because of contract confidentiality obligations and the sheer complexity of the healthcare reimbursement system. However, a new group of independent third-party companies is rising to meet this need by identifying rate differences within a network and presenting those to consumers in a way they can act upon.
“Most consumers don’t realize that MRI costs may vary by up to $2,000 within the same network or that certain obesity surgery costs can increase by up to $30,000 simply on the consumer’s choice of hospital versus surgery center,” said Eric Bricker, MD, chief medical officer of Compass Professional Health Services in Dallas. “These are just two examples that illustrate the tremendous opportunity achievable by optimizing the discounts available within your existing network.”
With these types of true cost differences in the market, there are hundreds or even thousands of dollars at risk for consumers who are frequently being asked to pay higher deductibles and a larger share of the total healthcare bill. When consumers make smarter decisions, the employer benefits at the same time from lower claims costs and higher benefit satisfaction.
While we have a problem here, the free-market economy in the United States views problems as opportunities. In the same way that rising gas prices are forcing companies to look for alternative fuel sources, rising healthcare costs and an increasing number of uninsured are motivating companies to re-evaluate our entire healthcare delivery system. This will require us to step outside our comfort zone, but the benefits of doing so will be lasting.
Eric Johnson is the president of Agent Allies in Arlington, Texas. Agent Allies is an innovator, wholesaler and distributor of creative solutions for independent health insurance agents.