Healthcare Effects of Budget Wrangling

Posted on 04/11/2011 @ 02:30 PM

Tags: Budget, Around the Office, Our Nation's Checkbook, Health Care, Taxes

This past weekend, a government shutdown was narrowly averted by an eleventh hour compromise. Unfortunately, this was just a prelude of things to come. In the weeks ahead, the debate in Washington is going to get louder and nastier. When we hear conflicting explanations for the disagreement, and numbers like $40 billion here and $1 trillion dollars there, it easy to get distracted by the drama and conflict and lose sight of the effect these decisions will have on our lives and the lives of people that we know, everyday.

For example, in the week leading up to the almost-shutdown, Rep. Paul Ryan, chair of the Budget Committee released his plan for the 2012 budget. In his attempt to reduce the deficit, while simultaneously continuing tax cuts for the wealthy, he drastically alters Medicaid and Medicare. Funds for Medicaid would be allocated as a block-grant to the states, which experts predict could effectively end Medicaid coverage for a large group of people, possibly hitting the low-income aging in care facilities hardest. Medicare recipients could see their out of pocket expenses double. This will drive more people into poverty.

For those of us who do have access to health care, we often are insulated from the realities of health care costs for the uninsured. I recently had some health difficulties, and was thankfully covered, but it was my first experience with decoding “explanation of benefits.” This experience allowed me to compare health costs of the insured and the uninsured. As part of our extended discussion of the state of U.S. health care, my friend Terry shared his story; the following is an excerpt from his private blog used with his permission,

“Recently, a family member underwent surgery. My health insurance carrier (who shall remain unnamed) sent me an Explanation of Benefits (EOB). As I reviewed the document it became obvious to me as to why health costs are so inflated. The financial information on the EOB is as follows,

What this shows is that amount billed by the provider to the health insurance company for three office visits, one x-ray the actual surgery was $9089. Of the amount billed $1703.36 was negotiated or allowed. I had to pay a deductible of $290.88 and the portion that was “my responsibility” which came to $732.95 for a total out of pocket for me of $1023.83. The plan paid a total of $1744.75. So the provider received a total of $2768.58.

Anyone who has no insurance would be billed the $9089 and would be expected to pay that full amount. Why? Because health insurance companies negotiate with health care providers for discounts on “usual and customary” medical fees. For a provider to bill an uninsured party less than they bill the insurance company would be in violation of their contract.”

Health care costs are the leading cause of bankruptcy, and its easy to see why. Medicare and Medicaid were created to protect the most vulnerable among us from this. In evaluating our priorities as a nation, in calculating what would create the most common good, we must remember how our choices will affect the poor, the sick, the aging. We must ask, "What does security mean for them?"