20 Million Health Benefits Programs is a Few Too Many

Rich Rodgers

Why do I have to be in the business of administering health benefits plans?

I'm in the midst of starting a home energy efficiency company right now, so just writing this post is taking up time that I don't have to give, but I at least hope that my procrastinating and venting is on-topic. 

Don't get me wrong, I think everyone should have health care.  Not just people with well-paying full-time jobs, but kids, seniors, moms working part-time...but right now I'm focused on providing health benefits as an employer.

To run our benefits program as a start-up, I'll have to take a pretty good chunk of time looking at insurance companies and the plans they offer.  I'll need to be conversant on deductibles, co-pays, maximum out-of-pocket figures, and the list goes on.  I'd really rather focus on running an energy efficiency company.  I like efficiency.

There are over 20 million businesses in the US.  Why do we think it makes sense to have something on the order of 20 million different benefits programs?  How much does it cost for the insurance companies to talk to those 20 million businesses?  What an incredible waste of time, energy and money.

I would much rather write one check, pay into one fund to ensure that my employees get top notch health care benefits.  Everyone should have a choice of public and private plans, I think, like Senator Wyden proposes.  But really, let's be honest about the way we do it now:  we're doing it wrong.

It seems like we could have a fair and simple system that gives people choices.  I want my elected officials to push for that kind of system.

Comments

  • Eileen Dover (unverified)
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    And while we’re having the discussion, why do we need hundreds of small companies doing home energy efficiency audits? There is just too much choice. As a home owner, I’ll have to research the different companies, examine their complaint history, check customer references and get a quotes from the energy audit companies that look promising. Gosh, I’m overwhelmed. In the end it would be much simpler to have the government provide free home energy efficiency audits and complete the actual work for the homeowner. We could even subsidize the repairs and energy upgrades. This would require us to grow the size of some government agencies, but think of the possibilities—family wage jobs with great retirement and health care benefits.

    I also see a number of parallels between the current health care debate and hunger. Oregon currently has over 600k people on food stamps. This is about the same number of Oregonians who have no health insurance. One of the major issues facing the food deprived is access to high quality, healthy food at reasonable prices. Again there is too much choice, and far too few choices for good low cost foods. Those damn for-profit grocery chains—they rake in more profit than the evil health insurers. The solution again is simple—a government run food cooperative with high quality subsidized food available to all. Problem solved, and we create more family wage government jobs with great benefits.

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    The point is to make sure that people, not their employers, are the ones with choices. It's not as though employees get to choose which insurance company their employer uses.

    From an efficiency standpoint, it makes far more sense for everyone to have their choice of any plan, with their employers making a contribution toward those costs.

    Also, anyone who claims to be for free choice would support the elimination of the anti-trust exemption for insurance companies. The insurance companies don't, of course.

  • Glen Geller (unverified)
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    Eileen, you seem to be missing some fundamental differences between the needs of human beings to see a doctor for routine and emergency care, and sealing drafty windows and regularly replacing the furnace filter. A health insurance benefits administration company can be located in any place and serve folks everywhere, since all they do is act as a broker with the money. If such an organization is motivated to provide the best quality service and value to it's customers, and does not have to worry about profits and shareholders, it can do the job more effectively and efficiently. Kinda like the fire department, who has no commercial competition but works damn hard to provide a vital service to it's "customers", without the distraction of being a business. This is why a well designed Public Option will hopefully provide the most affordable and successful way to provide health care to all working Americans. (truth be told, I vote for single payer universal. But that's not the issue unfortunately.) Most service related businesses can only serve regionally, so it makes sense for there to be many of them spaced out across the land, with some overlap to provide some competition that spurs on improvement to quality and service. This generally works unless there is collusion among the providers, or a monopoly in one area (i.e., some states and regions have only one health insurance provider.) Assuming a person has some sort of home with a heater, it may be desirable but not imperative that they have an efficiency consultant available to maximize performance of the HVAC system. Since there a a number of variables - homeowner, renter, apartment, duplex, log cabin, snow belt, sunbelt, plus consumer budget etc - the regional companies are best suited to provide a number of options to consumers.

    Your argument about grocery stores is beyond specious, I don't have time to go into all the reasons, as I have to get back to work.

    My regards to your husband Ben.

  • Eileen Dover (unverified)
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    The McCarran-Ferguson antitrust exemption for health insurers is a non-issue in the health care debate. Yes, some Senators are calling for a repeal of this exemption, but there is no critical discussion or recognition what this law is used for.

    • The McCarran-Ferguson antitrust exemption is used primarily by property and casualty insurers for certain regulated cooperative activities such as developing standardized policy forms and sharing historical claims data to allow these insurers to underwrite policies. It has never insulated any insurer against naked price fixing, bid rigging or similar unlawful and anti-competitive practices.

    • Health insurers are already subject to at least four levels of antitrust regulation and compliance - state attorneys general, state insurance commissioners, federal antitrust enforcers at the U.S. Department of Justice and Federal Trade Commission, and any aggrieved private plaintiff who believes an antitrust violation occurred.

    • Every health insurer merger is subject to review by the appropriate state insurance commissioner. Furthermore, nearly all health plan mergers are also reviewed for competitive impact by the Antitrust Division of the U.S. Department of Justice. If the DOJ finds even a "likelihood" of anti-competitive effect for such a merger, it challenges it.

    • In addition, health insurers are subject to extensive regulatory oversight at the state level that includes premium rate review and policy form approval by insurance commissioners.

    Check out this WSJ article: http://online.wsj.com/article/SB10001424052748704500604574485160248832466.html

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    So you support the bill working its way through Congress?

    The bill related to the health insurance industry's anti-trust exemption only repeals McCarran-Ferguson in cases of price fixing, bid rigging and market allocation. You say there is no danger of these things occurring given the current regulatory scheme, so the bill poses no threat to your company/clients, right?

    http://leahy.senate.gov/press/200909/091709a.html

  • Eileen Dover (unverified)
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    Mr. Rogers: The bill is a red herring, and completely irrelevant to the health care debate. Its introduction serves the purpose of providing sound bites that tickle the ears of the uniformed.

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    Yes, well, we live in a cynical age, and unfortunately not all of us take all messages at face value. I've heard the industry's argument that the repeal of the anti-trust exemption is a red herring. Either that or it's a threat to the survival of small and medium insurance companies. But there's nothing to worry about, anyway, goes the company line.

    If it's not a threat, and it's a red herring, and it only relates to egregious behavior that you say isn't happening anyway, why not endorse the bill and make it go away? Somehow, in spite of all of the rhetoric, the industry's plugging away, trying to keep the bill from passing.

  • Jake Oken-Berg (unverified)
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    Thanks Rich. I agree with your sentiments. I've always thought Senator Wyden was on the right track separating employers from their significant role as purchasers of health care insurance for their employees. Hopefully, he's successful with an amendment to open up the state exchanges to all citizens. (But that looks doubtful with the stance of many unions in this state and nation.)

  • Kurt Chapman (unverified)
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    Rich, I understand the procrastination. Given the state right now of medical coverage delivery vis-a-vis the employer relationship you would be advised to contact a really good benefits broker.

    Ring back if you're interested. Jeff Jones in Eugene is fantastic with all types of plans.

  • Paul Cox (unverified)
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    Washington has never ended a program after it was began. FDR's "Rural Electrification Administration" still is there.

    This is one reason many Americans say no more taxes. There is litterally no end.

    It's funny how liberals use Europe as an example, but don't know the details. While you're complaining about employers pruchasing the insurance, your favorite European model, Germany, has had a history of the company owning the bank (which loans it money at discount), the brass band, sponsoring a Church, underwriting the pension fund AND buying the insruance. Which is it?

  • Glen Geller (unverified)
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    I am suprised that nobody else seemed to get the joke by the commenter Eileen Dover. I even sent grettings to her husband, Ben Dover. You guys are all so high browed some times.

  • Moritz Wegmann (unverified)
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    <h2>For the health, unfortunately we can not do enough. And that is very expensive.</h2>

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