A Brief History of Health Insurance

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Back in the nineteenth century, the company you worked for would take care of all of your needs, including housing and healthcare. Over the years, the companies dropped the housing, but not the health insurance, which was used as a bargaining chip when the unions were big, while the rest of the civilized countries in the world were developing their universal healthcare systems.

This century, Ohio has roughly 11.6 million people; 6 million are covered by their jobs, 2 million are covered by Medicare, 3 million are covered by Medicaid. That leaves about 600,000 people who buy their own health insurance, only 5% of the population. In 2013, there were nearly 400,000 in the individual market, the Affordable Care Act brought in about 200,000 more to the marketplace — only 2% of the population.

The new 2% of the population consists of individuals young and old who now had a federal mandate to buy health insurance. Maybe 25% of the new enrollees were formerly uninsurable, or .5% of the population — certainly under 1%.

But rates went up more than double in the individual marketplace mainly because of this less-than-1% that takes all the blame — my rate for my nice Medical Mutual PPO (with a large local provider network and additional national network) went up 224% in just the first year of the Exchange. Now I know why, because it was planned that way. They had to make way for the Medicaid-inspired HMOs to come in at a certain price-point, which, in 2014, came in at double the price of my 2013 PPO, so of course the PPOs needed to be priced higher than that. My Medical Mutual PPO has gone up double digits annually since then. Of course the elimination of the PPOs was planned. Three short years later, for 2017, Medical Mutual PPOs in the individual market (both on and off the Exchange) have been eliminated in the entire state, replaced by expensive HMOs that reduce healthcare flexibility by about 90%. Not to mention the 85% inaccurate provider network that I researched this summer. Will I be able to find a doctor?

No more “real insurance PPOs” for individuals. In four short years, what used to be 82% of the market has evaporated into thin air for individuals living in Ohio. This dumbing down of Medical Mutual health insurance, the largest Ohio insurer, insuring Ohioans since 1934, (and the company has made, just in the past nine years insuring state workers alone, $1,733,427,299), is an incredible loss for our state.

Meanwhile, employer-based insurance is having its own revolution, with deductibles and out of-pocket costs nearly doubling and employee raises shrinking to make up for the rate hikes that come every year that far-outpace cost of living and merit raises and do not reflect general economic growth. All of this results in less healthcare utilization and poorer health.

Employees are locked into their employment due to health insurance, which keeps them down, and discourages talented people who might be inclined to break out on their own, from pursuing brilliant ideas in the spirit of the American Dream. But they don’t because they wouldn’t have access to the healthcare they are “privileged” to receive from their employers. There are no nice PPOs they can buy on their own, because individuals are now, just this year, discriminated against by the health insurers in Ohio, specifically Medical Mutual, that insures our state workers and company workers with large provider network PPOs but will no longer cover any individuals with PPOs, the product that up until 2016, was the only type of health insurance they sold. Individuals get the shaft.

Our country will suffer greatly from this loss. What do we tell our kids, that their dreams are limited by the limited availability of the best healthcare, which is now all of a sudden not available to individuals, artists, and small business owners?

Meanwhile back at the ranch, our medical costs have shot through the roof, with hospitals merging and pharmaceutical prices going nuts and lab charges costing eight times more than they did a few years ago before the mergers. And medical costs are estimated to go up 5.7% every year for another several years! Soon it will be 20% of our nation’s gross domestic product! And then what?

Is it the fault of the less-than-1% newly-covered sick, whose costs now are shouldered by the small, 5% individual health insurance market, (which really isn’t fair even when taxpayers subsidize two-thirds of the individual market, because the one-third above the 400% poverty level that do not receive a subsidy are unfairly disadvantaged by the inflated prices) or is it an insurance company bonanza? As for containing healthcare costs, our insurers have let us down. There is no realistic relationship of the cost of healthcare to our economy, and how can that be? Unlike the rest of the world’s civilized countries who have put healthcare in perspective, in this country, we’ve totally lost our grounding.

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