When someone needs dental care and starts shopping for insurance

My next post was supposed to be about possible solutions to our healthcare problems, but first…

This is an email Lynne just received from a potential client: “i AM INTERESTERED IN FINDING A DENTAL INSURANCE PLAN FOR MY SON, WHO LIVES IN dENVER. HE CAN’T AFFORD TO PAY, WE WOULD BE PAYING FOR HIM HE IS A 29 YR OLD MALE, WITH IMMEDIATE MAJOR DENTAL NEEDS.”

It’s an excellent example of adverse selection, where people wait until they have a problem before they try to get insurance.

If your first reaction is, “The poor kid! He can’t afford to get health care,” I love your heart. Keep reading.

Dental insurance, per Lynne, is $30 per month. That’s $360 per year. That yearly cost would have protected him from this very situation. In fact, that’s precisely what insurance is designed to do: protect you from the unknown. Specifically, high-cost unknowns. Like major dental.

Now, this 29-year-old man and his mother want complete strangers–namely, insured people–to pay for a known condition.

If you want the cost of dental insurance to go the way of health insurance, then by all means require insurance companies to accept this 29-year-old man who chose not to pay $30 per month for insurance.

Now, what can we do for the man in this situation? Honestly, tell him to get a loan. There could be a GoFundMe involved. Because if we tell him how awful it is that he can’t get insurance, he’ll internalize that it’s not his responsibility. He’ll start believing that it’s unfair to have a necessary bill that is difficult to repay.

Since that’s exactly how we got into this whole healthcare insurance fiasco in the first place, step by well intentioned step, we KNOW what will happen. And I don’t know about you, but I don’t want to have to pay thousands of dollars in dental insurance on top of $10,000-20,0000 in health insurance.

So no pity. No commiseration beyond, “What a sucky situation. Why weren’t you paying your $360 a year? Do you have a good relationship with your banker?” And maybe, “I’ll pitch in $25,” once he’s set his own affairs in order.

Let’s not make the dental care/dental insurance dilemma into another Catch-22.

How in the world did we get here?

One of the difficulties in fixing our healthcare system is that the problems have been going on so long that they seem normal. How can we identify what’s wrong when it’s been this way since before most of us were born? And then the complexity! Something’s wrong; add a fix; something else is wrong; add another fix; the fix broke something; add another fix; why does the industry do that, it’s stupid; add another fix…

We have literally been adding fixes since 1942, when FDR was trying to “fix” the potential problem of labor strikes during World War II by issuing Executive Order 9017. That created the National War Labor Board to settle labor disputes. Which set wage limits. Which made it hard to retain good workers. Which incentivized companies to offer non-wage compensation like health insurance. Which the IRS declared wasn’t taxable income on the part of the employee. Which linked health insurance to employment. Which, along with a bunch of other fixes, is why the individual health insurance market was in such bad shape when the Affordable Care Act came to town to save the day. Which instead gutted the market; so few insurers are left in the individual market that a large number of counties only have one left.

And then there’s the damage modern insurance coverage has done to the payment relationship between patient and doctor, which has helped cause medical costs to skyrocket…

And none of that explains why we don’t have enough doctors, which also goes back decades and has its origins in laws meant to increase the number of doctors…

Yes, the Law of Unintended Consequences sucks. And backtracking the consequences to their origins isn’t easy.

But don’t worry, Friend. All is not lost. Strange people (like me!) exist who enjoy delving into the minutiae of regulations and tax laws and government subsidies and–oh, are your eyes glazing over? I’ll skip to the good part.

Let me give you the results of over ten years of research into the problems that plague our healthcare system. I wrote this list just over a year ago on February 6, 2016, and it hasn’t changed.

Here, at least in part, is what was wrong with our system pre-ACA:
* The wage and labor laws from the 1940s are responsible for the uneven playing field between the corporate and personal health insurance markets.
* The federal government’s subsidy of doctors’ internships at teaching hospitals muscled out alternatives, leading to a de facto ceiling on the number of doctors getting their licenses every year, a number too small for the growing US population. This is the crux of our medical problem on the supply side.
* The federal government’s Medicare/Medicaid pricing structure skews the market toward artificial price controls and away from what is actually needed in the market, leading to, for example, fewer geriatric doctors. This pricing structure is used as the basis for negotiations between insurance companies and corporations, further skewing the market and giving the federal government even more indirect control over prices.
* State insurance laws and most states’ overall refusal to allow their citizens to buy health insurance across state lines are responsible for the patchwork health insurance system that increases costs and decreases competition. They also make it hard to create co-ops based on mutual interest (say, the Rotary Club or a church denomination) to reduce insurance prices and increase competition on the insurance side.
* The laws of other countries that require pharmaceutical companies to provide medicine at very low prices is a factor in higher prescription prices in the US, since those companies then raise prices here to compensate.
* Student loan subsidies allow colleges to raise prices, leading to more student loan debt at the beginning of doctors’ careers, pushing them into more lucrative fields and exacerbating the supply problem in lower income fields. This also impacts their ability to volunteer their services.
* US medical malpractice laws and the high cost of malpractice insurance directly impacts the fields doctors enter and (added to all of the above) whether or not they can even make it as an individual practitioner.
* Given all of the above, the logical but dysfunctional move toward nearly all medicine falling under the health insurance umbrella (rather than cash) has separated the consumer from the cost of medicine and medical treatment, allowing prices to go even higher.

Enter the Affordable Care Act. It was going to bend the cost curve, save families $2500 a year, get tens of millions affordable health care, and let you keep your plan and your doctor.

And which of those promises did it keep? Not one.

The ACA is the straw to the overladen camel, the loud noise to the avalanche area, the last bit of pressure on the dam’s weak spot in these areas.

The ACA is directly responsible for the trend reversal from PPO to HMO and so-called narrow networks, the evisceration of the personal health insurance market outside of the exchanges (less demand leads to fewer choices on the supply side along with higher prices for those who remain), the flight of insurance companies from the personal health insurance market even within the exchanges, the noticeable and rapid shift away from private practice, and the rise of concierge medicine among those doctors refusing to go corporate. And it doesn’t address in any way, shape, or form the two biggest issues: not enough providers and the transformation of the Medicare rate system into de facto price control.

If the ACA continues as is, it will ultimately destroy first the personal health insurance market and then the corporate market. It will ensure the demise of the small provider who takes insurance and leave only the largest players desperately struggling to stay on top of all the regulations. Truly, I couldn’t come up with a better way to destroy the health insurance industry and send doctors and prospective doctors fleeing if I tried.

So that’s where we are, and that’s where we’re going. It’s a dismal prediction, but denial won’t make it better, and there is still hope. There is still time to fix things before it all goes boom. But in order to do that, people need to know there are alternatives to our current system and what those alternatives are so that they can make good choices and pressure their politicians to do the same at the various levels of government.

Which is why I’m grateful to Lynne for starting her blog and letting me play on it. Individuals like her, and like me, and like you, we don’t have to wait for the government to fix everything. We can start the process ourselves.

In my next post, I’ll talk possible solutions.