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Allan Ghitterman: Health Insurance or Health Care?

The real stakes in the health-care overhaul battle are more about choice than chance

The Obama administration is seeking to have legislation enacted that will have a direct effect on insurance company practices and how we are affected by their conduct. While there may be some effect on health care, it is unlikely that it will be as dramatic or as comprehensive as the political adversaries say.

Allan Ghitterman
Allan Ghitterman

Do not confuse the desire to compel the insurance industry to provide coverage according to good-faith standards and using reasonable regulations on how to adjust claims with the horrendous statements by critics that the administration’s effort is intended to adversely affect your health care. The administration’s intent is to provide an alternative to the “gotcha” conduct of insurance companies to minimize their responsibilities for the policies they sold to you.

Some of the real problems that exist are related more to treatment coverage than to treatment choices, and are frequently limited by insurance company conduct. Examples include refusal to provide treatment that the companies deny on the grounds that it is experimental, irrespective of evidence that it works, or discovering an incorrect answer on your application (usually submitted several years earlier) to an unrelated condition as a basis for canceling your policy, to name two frequent occurrences.

These are the problems insurance clients face on a daily basis, and you won’t know when the insurance company decides it won’t provide recommended treatment, and when you do find   out, it is too late. Please note, this is not a medical decision, but an insurance coverage decision that affects your health care. Doctors can only recommend that you receive the kind of treatment that will solve or ameliorate your problem. The insurance companies require the doctor to ask for permission for most treatment programs or for nonemergency hospitalization; without that permission, neither the doctor nor the hospital will be paid by the insurance companies for your treatment.

Let’s talk about premiums. Do you realize a substantial portion of the premium dollar goes to fight other insurance companies to avoid paying claims in the fond hope that they may escape their obligation to pay the claim? And if you think Wall Street wages are excessive, think about the wages the top echelon of insurance companies receive. Research has established that the administrative costs that health-care providers incur result in an allocation of $100 billion annually for that purpose. Moreover, doctors’ offices and hospitals spend $250 billion to $300 billion for interaction with insurers, for filling out forms for requesting permission to provide particular treatments or reporting on them, and collecting patient costs.

Can you imagine the effect on the policy premiums if these costs are reduced or eliminated? To point out that $100 billion is $1 trillion in 10 years gives us some perspective.

Many insurance companies have legitimate concerns that they are being targeted by persons who are trying to get something for nothing, but they have enough resources and experience to prevent that from happening. I am not suggesting that we eliminate insurance companies, but there are some areas in which other institutions can do better. In the case of health insurance, I believe the government will do a better job and at a lot less expense than private insurance. Of course, you can continue to believe that insurance companies are your friends and the government is your enemy, but that would not be the smart way to bet. Think about Medicare and the provision of veterans’ benefits, successful long-term programs that have provided health care for millions of Americans.

Finally, this is a battle over the terms of insurance coverage, not health care. If health-care reform legislation passes, it will save insureds a mint on the premiums, because we will have a choice between private insurance and all that that portends and a public option for medical care at a reasonable cost from a doctor of your choice with a minimum of red tape.

— Allan Ghitterman is a certified specialist in California workers compensation law and is now somewhat semi-retired; a member of the boards of Foodbank of Santa Barbara County, Legal Aid Foundation of Santa Barbara County and the Rehabilitation Institute Foundation; and a not too-good tennis player.

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