An article in yesterday's Boston Globe, "Health tax may wallop towns," reports, for example:
Framingham has dozens of employees enrolled in two of its family plans at annual premiums of $40,475 or $39,150, far in excess of the threshold. For individual plans, the excise tax threshold is $10,200, and Framingham has scores of employees enrolled in plans with annual premiums of $16,275 or $14,500.
If the new tax were in effect today, Framingham would probably face an additional expense of $4,660 to $5,190 for every employee in the family plans, and $1,720 to $2,430 for each employee on an individual plan.
They follow with numerous other examples.
There's something wrong here, in many ways. Who is bilking whom with that kind of rate? Who's in charge in Framingham and the other cities that are mentioned? I work for a small company in Massachusetts, and my top-of-the-line family PPO plan costs me and my company about $14,000 per year--less than half of what the municipalities are paying. So I took keyboard in hand and wrote a letter to the Globe, with a copy to the reporter:
My letter:
If Massachusetts municipalities want to avoid the "Cadillac" tax on health insurance, the answer is out there in plain daylight. Why are they buying their insurance from the likes of Blue Cross Blue Shield or Harvard Pilgrim Health Care? Haven't they been listening to the debate for the past year and more about the cost of insurance? Hasn't it sunk in that 30 cents of every dollar to private insurers does not come back as payments for care? If the new Federal law doesn't provide a public option, what is stopping the cities and towns from banding together and creating their own?
I fault the Globe for not reporting this story correctly. It's not just the unions and their hard-won benefits against the municipalities and the taxpayers, while the insurance companies blithely pass the costs along. Since when do we have to let these private businesses, which add little value for their greatly inflated costs, set us against each other and dictate that there be no alternative?
The following dialog ensued with the reporter:
Reporter:
I'm not quite following. How exactly are the insurers responsible?
Me:
"...30 cents of every dollar to private insurers does not come back as payments for care..."
That's been brought up time and again as a major argument for a public option, which would take profits and high executive pay out of the picture.
Reporter:
The nonprofit insurers in Massachusetts say their lost-claim rate (I think that is the correct term) is over 90 percent -- that more than 90 percent of their revenues goes to paying claims. Let me know if you know something that challenges this. Thanks.
Me:
If that's documented I'd like to see it. A lot of articles I've read elsewhere contradict that.
Reporter:
I believe the cost-loss ratios data are filed with Division of
Insurance. I would be interested in what you find out.
Me:
The following page has a number of references. In addition to the direct overhead of private insurance companies, there's the additional overhead they impose on physicians and hospitals. I'll stand by what's in my letter. [link to MassCare information]
Reporter:
[silence]
I think I got under his skin a bit, questioning his reporting and understanding. If he's supposed to be their expert on health insurance, why isn't he sure of the term? And why is he so far off base?
I don't know what to be more upset about, the ripoff that the insurance companies and the municipalities are involved in, or the misguided reporting from what's supposed to be a good newspaper. It all points to a need to keep the heat on until we really get the system fixed, once and for all.