Elisabeth Rosenthal’s “Insured, but Not Covered”

Insured, but Not Covered

By Elisabeth Rosenthal
The New York Times, February 7, 2015

The Affordable Care Act has ushered in an era of complex new health insurance products featuring legions of out-of-pocket coinsurance fees, high deductibles and narrow provider networks. Though commercial insurers had already begun to shift toward such policies, the health care law gave them added legitimacy and has vastly accelerated the trend, experts say.

The theory behind the policies is that patients should bear more financial risk so they will be more conscious and cautious about health care spending. But some experts say the new policies have also left many Americans scrambling to track expenses from a multitude of sources — such as separate deductibles for network and non-network care, or payments for drugs on an insurer’s ever-changing list of drugs that require high co-pays or are not covered at all.

For some… narrow networks can necessitate footing bills privately. For others, the constant changes in policy guidelines — annual shifts in what’s covered and what’s not, monthly shifts in which doctors are in and out of network — can produce surprise bills for services they assumed would be covered. For still others, the new fees are so confusing and unsupportable that they just avoid seeing doctors.

(B)y endorsing and expanding the complex new policies promoted by the health care industry, the law may in some ways be undermining its signature promise: health care that is accessible and affordable for all.

Readers Comments:

Don McCanne
San Juan Capistrano, CA

The private insurance industry will always place a priority on optimizing its business model, which means maximizing revenues (premiums) and minimizing expenses (payments for patient care). Earlier managed care models proved unpopular because of denial of care, but now they have devised innumerable methods of denying payment instead, in full or in part. Many examples are found in this article.

In sharp contrast, an insurer owned by the public, such as Medicare, has a mission of serving patients. That is, our own public stewards are there to help us get the care we need. They are not there to try to produce a profit for the government; after all, its our own tax dollars.

We are close to the threshold wherein the public will no longer tolerate private insurers shifting ever more costs onto patients with health care needs, while taking away our choice of our health care professionals.

What is our way out? Improve Medicare and expand it to include everyone.

Len Charlap
Princeton, NJ

Some conservative commenters have pointed to Switzerland as a country which only uses private insurance companies and appears to have a system that works.

  1. The Swiss government writes a basic policy that all companies are required to offer with no change. Thus all the chicanery reported in the article is avoided. The policy is accepted by all doctors. People know exactly what they are getting. Everyone must have the basic policy.
  2. The private insurance companies may make no profit on the basic policy.
  3. The health care results of Switzerland are about average among the 10 or 12 wealthiest countries which is to say they are considerable better than we get.
  4. If the cost of insurance is more than 8% of a family's income. they receive a subsidy from the government. About 40% receive such subsidies.
  5. We pay about 50% more for health care than the Swiss, but the Swiss pay almost 50% more than the other wealthy countries most of which use a variation of single payer.
  6. The Swiss government and insurance companies pay careful attention to the practices of its physicians wrt to poor practice, unnecessary tests, and overcharges. A suspected doctor will receive a dreaded "blue letter" from the insurance company requiring him to justify his practice.

If we can't have an efficient single payer system like the UK or Canada, for example, I would settle for something like the Swiss system. It would do away with most of the scams illustrated in Rosenthal's great series.

Don McCanne
San Juan Capistrano, CA

In Reply to Len Charlap

The Swiss health care system is certainly superior to what we have in the United States, precisely because of the reasons cited by Dr. Charlap. However, a comprehensive report by OECD and WHO of the Swiss system was released in 2011, and, if you read it carefully, you will also find these features of the Swiss system - features they share with us:

  • Highly inefficient and fragmented
  • Profound administrative waste
  • Inequitably funded
  • Regressive financing
  • Wide variations in premiums
  • Highest out-of-pocket costs
  • Increasing managed care intrusions
  • Insurers game the system

Because of the inadequacies of the Affordable Care Act we need to return to the negotiating table to fix our health care system. But when we do, let’s not start from a position of compromise, thereby allowing private insurers to continue to inflict these abuses on us. Let’s begin with a bona fide single payer system - an improved version of Medicare that covers everyone.



By Don McCanne, MD

This may be the most important article in Elisabeth Rosenthal’s outstanding series on health care costs and pricing in the United States. She shows that the Affordable Care Act failed to prevent private insurers from reducing their own risks by shifting much more of the costs onto patients, while reducing patient choice by further limiting their networks of approved providers.

Both access and affordability are worse now than they were with typical plans available a generation ago. The nation expanded the numbers covered by insurance, but at a cost of of leaving too many patients broke and without adequate access to care.

In my first posted response to her article, I repeated our oft-expressed view that it makes a difference on whether we finance health care through private insurers structured to optimize their business success or though public insurance designed specifically to serve patients. Elisabeth Rosenthal shows that what is good for insurers is bad for patients.

Some may wonder why I included two responses on the Swiss health care system when this article is on the poor quality of private health plans in America.

First I want to say that Len Charlap is one of the more astute and ethically-driven commentators in the readers’ response sections of The New York Times. His highly appropriate response to this article explains that our private insurance products could be greatly improved if we adopted the policies that the Swiss have in their country to regulate and control the excesses of the private insurance industry. Such a system theoretically would be more politically feasible in the United States since it is supported by a few prominent conservatives such as Harvard Professor Regina Herzlinger. 

We definitely do need to return to the negotiating tables since the ACA reforms are intolerably flawed. Although I certainly agree with Len Charlap that the Swiss system definitely would be superior to what we have, I do have a problem supporting a Swiss-style private insurance model as our opening position on renegotiating reform. Imagine having to compromise with those on the far right who would insist that patients have greater financial exposure to the health care that they receive. They would perpetuate and make even worse the very problems that Elisabeth Rosenthal discusses in her article.

The reason that I am reposting our responses here is that Len Charlap’s comment received very high exposure since it was selected and displayed as a “NYT Picks” and at the top of the list of “Readers’ Picks.” On the other hand, my response to him was held until some time after the comments section was closed, and then, when it was posted, it was buried under 300 plus responses, and thus had virtually no visibility.

My response to him listed findings from a OECD/WHO report that revealed that the Swiss private insurance plans, though certainly better than ours, still had many serious deficiencies that we should reject as we go back to the tables to fix our sick system. Many NYT readers may assume from Len Charlap’s comment that the Swiss system is the answer, or at least a reasonable compromise with broad political support (except that the current Republican proposals move even further away from the highly regulated Swiss system).

So the point of discussing these comments on the Swiss system is found in my concluding remark in my second post above:

“Because of the inadequacies of the Affordable Care Act we need to return to the negotiating table to fix our health care system. But when we do, let’s not start from a position of compromise, thereby allowing private insurers to continue to inflict these abuses on us. Let’s begin with a bona fide single payer system - an improved version of Medicare that covers everyone.”