Blame government first as medical insurance explodes

Who and what are to blame for the soaring cost of medical insurance in Connecticut? Last week, a hearing held by the state Insurance Department heard opinions in response to more requests from medical insurers for premium increases, this time averaging 20% for individual policies and 15% for small group plans.

Of course, the country’s general inflation rate is a big part of the problem. But the costs of medical insurance are especially complicated, since for many years government’s intervention, necessary as it may be, has turned medicine into a carnival of cost shifting, so much so that people can hardly know the real cost of what they’re getting and who is really paying.

Elected officials blame insurers, who blame hospitals and doctors, who blame insurers and government. They’re all correct, though exactly how much each is to blame isn’t clear.

But start with government because of its direct accountability to the public and because government is the biggest purchaser of medical insurance — for its employees, for the poor via Medicaid and for the elderly via Medicare.

Government’s payments for Medicaid and Medicare patients are sharply discounted from rates paid by other patients. The point of this discounting was to shift costs to those other patients and hide them. Exactly how much costs are shifted is debated. But if government paid more for the poor and elderly, hospitals and doctors could charge other patients less and insurers could reduce their rates — at least theoretically.

But saving money in medicine and medical insurance may require competitive markets even as those sectors have greatly consolidated.

Most Connecticut hospitals are now owned by two chains — Hartford HealthCare and Yale New Haven Health — and hospitals have been acquiring or partnering with physician practices, further diminishing competition. This consolidation has been attributed to the growing burden of government regulation and the desire of doctors to do less paperwork and more patient care.

Meanwhile, insurance companies have merged and gotten bigger or left the medical insurance business. Only three insurers are selling individual medical policies on Connecticut’s Affordable Care Act exchange in Connecticut, and one insurer has reported big losses in the last two years. That company may not be looting its customers as much as the haters of insurance companies like to believe. But if medical insurers really have excess profits, government could always tax them away.

How hard are medical insurers negotiating with hospitals and doctors? At last week’s hearing, state Attorney General William Tong complained that insurers are not negotiating costs but rather building their rates on mere estimates of annual cost increases. Presumably state law could require insurers to seek specific rates from hospitals and physicians for a year or two in advance  if hospitals and physicians were willing and able to provide them and stick to them. They’re probably not.

Also driving up medical insurance costs are state government mandates for coverage that insurers must provide. Not all are necessities. Many are mainly matters of legislators seeking to gratify one constituency or another. Could state government reduce its medical insurance mandates? Not without a lot of shrieking.

(Meanwhile, state government’s medical insurance for its employees and retirees spends $1 million a year for erectile dysfunction drugs.)

Maybe the best suggestion at last week’s hearing was made by state government’s departing health care advocate, Ted Doolittle, who said insurance companies are serving as a “stalking horse for the hospitals,” the biggest parties in interest. Doolittle said hospitals should be interrogated just as closely as insurers and the hospitals raising costs most should be identified.

There’s a lot of money in medicine and insurance, with many executives paid spectacular salaries, and the search for medical and insurance coverage efficiencies is a largely political matter. So it should be the General Assembly’s job more than the Insurance Department’s.

Indeed, for just presiding over soaring medical insurance costs, government is most to blame for them. But then, which legislators have the courage to risk offending not just two huge industries but also their many constituents who are patients?

 

Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net.)

Latest News

Red Sox and Royals clash in AAA little league showdown

Teddy Kneeland braces for impact with the catcher.

Riley Klein

TORRINGTON — The Steve Blass Northwest Connecticut Red Sox dropped a nailbiter 10-9 loss to Torrington Royal at Major Besse Park June 5.

The penultimate game of the AAA regular season came down to the wire with Torrington securing a walk-off victory in the final inning. The Red Sox, composed of players aged 9 to 11 from the six Region One towns, played a disciplined game and shook hands with their heads held high after the loss.

Keep ReadingShow less
Art sale to support new nonprofit

“Galactic Dance,” a 90-by-72-inch work by painter Tom Goldenberg of Sharon, is one of about 20 works featured in a fundraising art sale at The White Hart Inn from June 14 to 16.

Provided

It has been said that living well is an art. For Keavy Bedell and Craig Davis, that art form doesn’t end in the so-called Golden years. The two Lakeville residents have created a new nonprofit organization called East Mountain House that will help make end-of-life kinder and gentler.

Bedell has been active in the community, providing access to all levels of assistance to people who are finding it hard to do the essential tasks and activities that bring meaning and joy to their lives. She is trained in contemplative care and is a certified end of life doula.

Keep ReadingShow less
A Heroine’s tale at Hunt Library
Provided

On Thursday, June 20 at 2 p.m., the David M. Hunt Library in Falls Village, in collaboration with the Falls Village Equity Project, will host “Honoring a Heroine: The MumBet Story.” This event features storyteller and museum educator Tammy Denease, who will bring to life the inspiring true story of Elizabeth “MumBet” Freeman.

Elizabeth Freeman, also known as MumBet, was an enslaved African nurse, midwife, and herbalist. Born around 1744 in Claverack, New York, she spent 30 years enslaved in the household of Colonel John Ashley in Sheffield, Massachusetts. Ashley was one of the creators of the 1773 Sheffield Declaration which stated that “Mankind in a state of nature are equal, free, and independent of each other, and have a right to the undisturbed enjoyment of their lives, their liberty and property.” This same language was used in the United States Declaration of Independence of 1776 and in the Massachusetts Constitution of 1780. Evidence suggests that MumBet overheard these ideas when Colonel Ashley held events in his home and when the documents were read aloud in the public square. Seeking freedom, she turned to Theodore Sedgwick, a prominent attorney who helped draft the Sheffield Declaration with Colonel Ashley. MumBet, along with an enslaved man named Brom, began the process of fighting for their freedom. Historians note that Sedgwick, along with many of the lawyers in the area, decided to use the case as a “test case” to determine if slavery was constitutional under the new Massachusetts Constitution.

Keep ReadingShow less
Knees creak by wee creeks

First brookie of the day in hand.

This spring I have spent more time than usual creeping around the “little blue lines,” those streams that show up on good maps as, yes, little blue lines.

This is where to find wild trout. Often brook trout, occasionally browns or rainbows.

Keep ReadingShow less