Cost

Saturday, March 20, 2010



Hi,



I want to expose another side to the health care cost problem that the news does not cover and I will use a recent example of a bill I got from the hospital.

A few weeks back my wife had an emergency at 2 AM and we went to the hospital. She had an infection in her finger that got so bad during the night that we could not wait until morning.

The doctor lanced her finger and sewed it up and sent us home. The cost for this was $543. We submitted a claim to Medicare and they only approved $134 and they paid 80% of that or $107. Our Blue Cross supplement paid the other 20% so it cost us nothing out of pocket.

Now here is the point. Medicare approves such low amounts that the doctors and hospitals take a loss on serving Medicare patients and therefore they make this up by charging private insured patients more. Medicaid reimburses at even a lower rate than Medicare. There are currently 100 million people on Medicare and Medicaid and about 150 million have private health care insurance. Even though Medicare and Medicaid are passing on the bulk of their cost to the private market they are still going broke with Medicare slated for bankruptcy in 2018.

The new health care bill is going to take 500 million from Medicare and most of this will come from lowering payments to hospitals and doctors while it adds another 10 million people to Medicaid.

In this simple example if we were younger and not on Medicare and had private health insurance they would have charged $543 for this treatment and our insurance company would have paid it.

It has been estimated that if the private insurance companies did not have to subsidize the public plans their rate increases would not be more than the cost of living. As more people move to the public plans the rates charged by private plans will increase accordingly and soon they will not be able to compete. Once we have only public plans left then the government will reduce benefits to maintain cost.



Jack (John) Novick