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Are more health lawsuits on the way?
Woman adorns stethoscope
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TEXT OF STORY
Bill Radke: In Massachusetts, six major health insurers want to raise premiums by as much as a third, and the state insurance commission has said "No." So this week, they're all headed to court. Now Massachusetts has already implemented its own health care overhaul. Which raises the question: are we going to see more of these lawsuits once the national health care changes take effect? Marketplace's Nancy Marshall Genzer takes a look.
Nancy Marshall Genzer: The insurers are suing because they say Massachusetts is requiring them to sell their policies at a loss. The state says skyrocketing premiums are crippling small businesses.
Austin Frakt is a health economist at Boston University. He says the rate ruckus could go national when the health care overhaul is fully phased in.
Austin Frakt: Yeah, I think there'll be lawsuits and threats and fights.
The Massachusetts insurers are arguing that penalties for not buying insurance are too low. Healthy people would rather pay a small fine than pony up for a policy. That leaves insurers, who must cover everyone, with too many sick people. And insurers say they must raise rates to cover them.
Amy Lischko teaches public health at Tufts University and helped implement the Massachusetts health care overhaul.
Amy Lischko: Nationally, there's dramatic changes that are going to cause all sorts of shifts that insurers are just not going to be able to predict accurately. And so they're going to probably increase their rates just because of the unknown.
Premium hikes could slow down under health care reform because it requires that 80 to 85 cents of every premium dollar go toward patient care. But Lishko says the best way to avoid high premiums and lawsuits is to cut the cost of care. Massachusetts didn't do that.
Lishko: And I think the national plan went the same route -- let's cover everyone first and then we'll look at how we can constrain health care costs. ow whether you can afford to do that on a national basis is another question.
A question that may be answered in the courtroom.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
My wife and I are fined about $2400 each year by the state of Massachusetts for not buying health insurance. I’m almost 60, been layoff, and jobs are hard to find. We live basically off our savings. We’ve always paid our own medical costs; but, since the fines I‘ve had to reduced my insulin shots to save money; this will eventually lead to kidney failure. The state is literally killing me with there fine. Think about this, I’m being fined for being responsible and paying my own medical bills. If the fines continue and get bigger we plan on moving out of state when I retire to save money; the state will loose out on our income tax revenue. Being fined for living? Great state we live in.
Interesting story. I'd like to hear how it turns out. Ms. Lischko touches on the panacea "the best way to avoid high premiums and lawsuits is to cut the cost of care". How? The insurers are saying, by their suit, "We don't know how to constrain the cost of care given the mandates applied to us."
The issue with high health care costs in the US has always been the cost of health care not the cost of insurance. Why can't the Obama admin and Obama congress see this? This story illustrates that a real health care overhaul would address the costs you pay at the doctor or hospital and NOT what you pay for insurance.
