HEALTH CARE/Joan Retsinas

Ice Cream and Health Insurance

We know how to define ice cream. Governmental agricultural czars have established the percentages of milk fat, solids, and air for frozen deserts to be called ice cream. A product pumped with too much air won’t pass muster. In freezer cases, ice cream sits astride its cousins, with similar packaging. But the titles are clear. We Americans, gourmets and gluttons alike, want truth-in-labeling.

If only health insurance were more like ice cream. Today “insurance” is a catch-all term, with no standard product. Some plans are great; others, lamentable. High deductibles, hefty co-payments, lists of excluded conditions, overly restricted networks of physicians, caps - all can render a policy meaningless. As many as 40 million Americans are “under-insured.” States have instituted “mandates” for plans sold in their states; but the many employers who self-insure can bypass those mandates.

Obamacare promised to require minimum standards. Plans could exceed those standards (just as you can buy higher-fat, lower-air ice cream), but plans couldn’t fall short. The draconian bottom line: plans had to spend 80-85% of premiums on care. Predictably, several large companies, employing mostly low-wage workers, yelled “foul.” Those companies already offered their workers pared-down policies. Minimum standards would translate into higher costs.

And, perhaps not surprisingly, a slew of well-paid lobbyists forced the government to retreat for 2011, allowing the mini-med plans to continue. “Rules Eased for Some Health Plans,” Janet Adamy and Avery Johnson, Wall Street Journal, November 23, 2010).

If that retreat marks surrender, and more large employers of low-wage workers join the movement for cheap policies, we will need another czar to demarcate “health insurance” from the pared-down variations.

In the spirit of ice cream, we should rename that new product, “lite-care.” Here are some guidelines for the ersatz insurance. As a general rule, “lite-care” will have high deductibles and low caps.

Consider rehabilitation (physical, occupational, respiratory, speech) – a costly treatment that can take months, maybe years, depending upon the patient’s diagnosis. Because only a small percentage of the workforce will need it, lite-care can drop it without risking too many angry enrollees. Or lite-care can cap it at 30 days. That way, the marketers can say the policy covers rehabilitation.

Mental health treatment, especially hospitalization, is expensive; and, as with rehabilitation, only a fragment of the workforce will need it. Because of “mental health parity” legislation, lite-care may have to include it, but, again, low caps will negate the benefit.

Hospitalizations drive up the tab. Lite-care can’t exclude them, but it can cap the number of days. For emergency room visits, lite-care can simply say “no.” For drugs, lite-care can require high deductibles, shifting the initial cost to enrollees. As for routine preventive tests, like mammograms and colonoscopies, lite-care enrollees can pay on their own. Their employers needn’t foot the bill.

For networks, lite-care can limit the number of providers; in fact, if lite-care sets reimbursement levels low enough, few clinicians will want to join. Very limited networks will force enrollees to go outside the network, where they will pay more. A confusing profusion of networks can help squash expenditures. In the bizarre-but-true category, one obstetrics hospital subcontracted its neonatal intensive care unit to a company that was not on the hospital’s network, but a different one. The hapless parents were stuck paying 40%, not 20%, of the neonatal tab. (“Insurers Sometimes Reject Neonatal Intensive Care Costs,” Michelle Andrews, Kaiser News, January 4, 2010) Lite-care policies can encourage this confusion.

Corporate honchos will want lite-care for their employees. Expect a surge of lite-care policies, all variations on the basic model. Those honchos, however, wouldn’t buy it for themselves.

Ironically, the frozen products that are low in fat and full of air are better for our health than genuine ice cream. Yet the insurance policies that are low in benefits, full of nothingness, are genuinely bad for our health – even with the hot fudge.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

From The Progressive Populist, February 15, 2011

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