Why Pakman says many Americans struggle to use their health insurance

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 57:58

   And I'm a Brit. I don't really know actually what's going on with the health care here. People are very upset about it. They're very angry about it. You see anger that, you know, that I know. I know people. But tell me what's going on with health care in the U.S.? Why are people so frustrated, so angry? Why do they feel that the system is unfair? there's many different reasons for this one gripe is health care connected to your job and there's the argument which i think is a fair argument that people staying in jobs they don't really like because they need health care makes them worse employees and it's not only worse for them as individuals but it's also worse for the business to have people working for you who don't really like the job but they're there because they need health care so i think the connection

2. 58:44

   between employment and health care is not an ideal thing you then have um you have medicaid medicaid is for people below a certain level of income um and depending on what part of the country you're in the medicaid coverage that you're entitled to below a certain level of income can be very good and it can basically cover everything including co-payments everything etc or it can be poor that's another area of frustration third area of frustration um people who are entrepreneurs or employed individually like me, we don't have group plans through an employer that we can buy into. So I basically buy my plan. I buy my plan from a marketplace. I pay $925 a month. That's just my premium. And I have co-pays. I'm paying for medications. I'm paying for office visits, diagnostics and labs, all up until a certain

3. 59:37

   number. So it ends up being the case that people who work for themselves but make slightly too much to qualify for Medicaid are out of pocket a massive amount of money for relatively mediocre plans in terms of what they cover. So like that's another area of frustration. All of these different things are, depending on where you're situated economically or geographically, are things that people are struggling with. There's a shortage of primary care doctors in many parts of the country.

4. 1:00:06

   Many insurances require referrals from primary care doctors to see specialists. So you call the dermatologist and they say, great, who's your primary care doctor? You go, I don't have one. They say, well, you got to get one. You call one and they say, we can't see you for 10 months. All of those things are areas of frustration with health care in the United States. And a lot of people seem to feel that they're getting price gouged every time they go and see a doctor, every time they go for something as simple as a blood test.

5. 1:00:35

   Is that a fair representation of what's happening? Well, Price Gouged has a lot of emotional language attached to it. I mean, what I can tell you is the following. There are negotiations that happen between providers and insurance systems where they say, OK, you go in for, I had an appendectomy, for example, a few years ago. The retail rate of the appendectomy was $35,000. In other words, if I had gone in.

6. 1:01:02

   Without insurance and I had just been billed, I would have been billed $35,000. That's much higher than just about every other Western developed country. So that's, as a price tag, that's a crazy price tag. And for people who don't know, an appendectomy, that's literally a life-saving operation. If you don't have that and you're in your appendix burst, you can get peritonitis and die. And we'll talk about the inelasticity of demand when it comes to a lot of these procedures as well.

7. 1:01:27

   Okay, so $35,000 is like the sticker price if I were to say, hey, I'm here, I need an appendectomy, I don't have insurance. Now, my insurance pre-negotiated a rate for an appendectomy with the hospital system. And so they said, listen, whether my appendix bursts or doesn't, whether I get this type of anesthesia or that type of anesthesia, whether I need the socks on my legs that keep the blood flowing, you bill for that all?

8. 1:01:55

   all that stuff might add up to $35,000. We pay $6,800 for appendectomies. And so the insurance company has negotiated their rate for their customers with that hospital system. So when people say, well, we need price transparency, this is sort of one of the things that's being talked about, which is should the cash rates differ so much? And then how does the premium I'm paying to the insurance relate to that? And then the third part of this is a lot of people who don't have the insurance and they get the $35,000 bill, they don't pay it because they can't afford it and so those non-payments which we say hey listen you got to pay your own way if you don't have insurance that's priced in to all of the premiums that people are paying so there's all of this waste and bureaucracy in that system the argument that people make when they say there

9. 1:02:41

   should be some kind of universal system it doesn't have to be medicare for all but there's a lot of ways you can get universal coverages if you eliminate a lot of this stuff we could just spend less which would allow it to be cheaper for individuals and there's a bunch of different ways countries have gotten to that but like that would be an example of something that's not working that well now i'll be very honest for someone like me who can afford the premium and i know what my maximum out of pocket for the year is in a sense it's working okay for me because i know i can go to the best hospital i want and get a phenomenal surgeon which is what i had and i know i paid my $9.25 for the month. I've got my annual deductible of $3,000. I'm good. Bill whatever you want.

10. 1:03:24

    I'm okay. The problem is for a lot of the people that make too much to be on the Medicaid plan. How much is too much to be on Medicaid? I don't know the answer to that. I think it's state dependent. I actually don't know. Yeah. And it depends on the size of your family also. Okay. Yeah. Okay. Please carry on. Yeah. No. So I think there's a lot of people that are falling, falling through the cracks the other thing is when you look at the uninsured rate it misses all of the people who have a plan maybe through an employer but they can't really use it because all of the other costs are so significant so i know people who have a plan through an employer it might be 500 a month the employee pays two-thirds so like the employee is paying the employer pays two-thirds they're paying 320 you pay 180 you can afford the 180 your co-pay is 60

11. 1:04:09

    bucks every time you go to the doctor. And if you need labs, you first have to spend $2,000 out of pocket before the insurance kicks in on the labs because you have a deductible. So a lot of people have insurance that they avoid using unless they are very sick because of the ongoing costs of it. That's bad because it leads to things getting more serious. You end up in the ER. That's not the most efficient place to get treatment. So that would be another problem that there is. And why is it like this? Well, it goes back to the period between World War I and World War II, actually, or maybe during World War I or right after, where there was a lot of momentum to a system like the one Germany had at the time. But it was seen as we don't want to do anything the way the Germans are doing because there were... Very reasonable assumptions. There were growing

12. 1:04:58

    tensions with Germany. And so there was a big push at that time. Growing tensions. There was a... big push at that time to de-link uh health insurance from employment um but because the german model was not appealing at that time this kind of like uh employer-related system developed and and it's been locked in for a very long time but but clearly there's a lot of people who are frustrated about the way the system is built today yeah but if everyone agreed it needed sorting out