March 9, 2009
Ken Block: A Painful Lesson in Rhode Island Health Insurance
My dermatologist dumped me this past Monday.
I was fairly new to her practice. Due to too many sunburns as a youngster, I need to see a dermatologist every three months. My previous dermatologist of many years had left the state, leaving me scrambling to find a doc who could take me right away. Many dermatologists don't take new patients or make you wait a year for your first appointment.
My dermatologist dumped me because my health insurance carrier changed from Blue Cross/Blue Shield of RI (BCBSRI) to United Health Care (UHC). On the day of my appointment, the receptionist took one look at my sparkling new health card and snarkily informed me that her office does not accept UHC coverage.
The fact that a doctor's office accepts insurance coverage from one carrier and not another is understandable. It is a bit bewildering that a doctor's office would not accept coverage from one of the largest insurance carriers in the United States — one of only three operating in the state.
As an employer, I was forced to change from BCBSRI to UHC due to cost; my annual renewal premium jumped almost 25% with BCBSRI. I asked for quotes from three carriers for my eight employees. Tufts is newly returned to the market after an absence of many years and came in 5% higher than BCBSRI, which in turn came in 5% higher than UHC.
How is it possible that a state-chartered non-profit like BCBSRI comes in higher for annual premiums than a for-profit carrier? You have to figure that the for-profit outfit is looking for 20% margins or so, which should translate into a significant rate advantage for the non-profit, and therefore a far less expensive cost for the purchaser of the insurance. Is the brand new skyscraper being constructed in downtown Providence for BCBSRI being financed by what I can only call over-charging for their services?
A large chunk of this year's premium increase was courtesy of our General Assembly, which decided to abolish the "healthy company" discount given to companies that used their health insurance less frequently than "less healthy" companies.
Isn't the whole point of insurance to price a policy based on the likelihood of that policy being used or not? Now, the pricing for all small businesses in RI, regardless of carrier, is determined based on the entire pool of covered employees of small businesses. Call this semi-socialized health insurance — whose net effect was a monster price hike for my company's coverage.
The General Assembly has passed mountains of health insurance regulations, many of which directly interfere with an insurance company's ability to operate profitably in the state. This is one of the main reasons that Rhode Island has such a lack of competition among carriers. This lack of competition leads to uncompetitive pricing and heavy-handed doctor tactics like refusing the insurance coverage of a large percentage of the population.
Our system of health coverage in this state is extraordinarily broken and is yet another disincentive for companies investigating moving to our state. The beaches aren't the only place to be burned in Rhode Island.
Ken Block is the chairman of the Moderate Party of RI
Sure makes you re-think which company is "cheaper" when you have to factor in the fact that many physicians don't even take UHC. UHC can charge less because they pay a whole lot less to the physicians. That's why the doctors won't accept it. Often UHC reimburses below cost. So why bother?
Posted by: Patrick at March 9, 2009 8:15 AMKen,
If you think your party is going to have any success in RI, you better learn the intracacies of what goes on here. It's like war, you better learn about your enemy. Clearly you have not done that with your latest.
Let me help you.
The unions own the Democrats that run this state. Frank Montanaro, the Democratic National Committeeman, the president of the RI AFL-CIO, the president of the RI Association of Firefighters, was, until very recently, Chairman of the Board of Blue Cross/Blue Shield of RI ofr many years.
Do you wonder why Blue Cross/Blue Shield is written into union contracts in this state?? Do you wonder why, most recently in Warwick, when the city tried to simply change the administrator of their self-insured plan from BLue Cross to United Health, a mob of union punks and thugs shows up at the council meeting to threaten the members if they dared change the administrator?
Your question "How is it possible that a state-chartered non-profit like BCBSRI comes in higher for annual premiums than a for-profit carrier?"
is actually very easily answered if you ever understood how things work in RI.
Ken,
Here's a clue. Compare the utilization rates for insured health care services between members of public sector unions (who have very low copays and/or deductibles) and employees of private sector companies, and/or families who buy individual policies from BCBSRI. Then figure out the cross-subsidization that is going on.
Here's another clue: RI's average age is higher than most other states. That drives up utilization as well as the mix of services/procedures utilized.
Add in the inefficiencies that characterize the entire health care industry in the US, which lags far behind other industries in its use of IT, quality management techniques and the like. And then factor in something else for defensive medicine practices (e.g., ordering more expensive tests) driven by the threat of malpractice litigation.
And finally, let's not forget the absence of a national health insurance market, and all those expensive state-level laws about what must be covered.
All that should get you a lot closer to the answer you seek.
Posted by: John at March 9, 2009 1:23 PM>>And then factor in something else for defensive medicine practices (e.g., ordering more expensive tests) driven by the threat of malpractice litigation.
You mean all those ambulance chasers I see advertising during the 12:00 p.m. local news broadcasts drive up medical costs?
Gee, who knew? ; -)
I guess we'd better Call Jim and tell him to tell the Heavy Hitter that we want our medical insurance costs to drop ... and that We Mean Business!
Posted by: Tom W at March 9, 2009 1:33 PMSETTLE!!
Posted by: Patrick at March 9, 2009 1:50 PMOne more thing, Ken; lame brain Carcieri appointed a communist as Health Insurance Commissioner - Chris Koller. Just another in a long line of stupid personnel decisions by the failed banker. Koller has the perverted feeling that competition is bad, so he does everything he can to stifle it. Just ask Tufts what they had to deal with. It's amazing they stuck with the process to the end.
Be sure to thank Koller when you see him for the ridiculously high rates in RI.
On the day of my appointment, the receptionist took one look at my sparkling new health card and snarkily informed me that her office does not accept UHC coverage.
Those of us in healthcare often call UHC "fake insurance." You have insurance, and you certainly pay for it, but it doesn't actually DO anything.
When I used to work for a private ambulance company, I hated it so much I tried to switch companies. Then I found out the new company's employees had UHC.
I stayed put. Being miserable for two more years was worth not having to trust my well-being to UHC.
Posted by: EMT at March 9, 2009 11:47 PM