Quinn’s last rant for 2024. Misinformation is frustrating. No, your wife is not a car!

In a previous post I outlined what I see as the dilemma Americas face when it comes to paying for health care. 

Since then I have been tracking social media comments on the topic. If the people posting are close to reflecting a significant portion of the population, we are in trouble. 

I suspect the lack of a fundamental understanding of insurance, how companies operate and individual responsibility is not limited to health issues, but also explains a lot about how people manage their finances and use the resources available to them – the  “401Ks are a scam” kind of thing. Since 1996 new employees at my old company have a cash balance pension – a defined benefit plan using a different accrual formula and less generous than the old plan. Ask those workers today and most will claim they don’t have a pension. 

One person posted that his appendix burst, he was rushed to the hospital for emergency surgery, but the insurance company said it wasn’t medically necessary. That is nonsense, but readily believed. 

Others claimed they didn’t know they had a deductible to pay or what was covered or not by their plan and thus they were being ripped off – read the plan material you were given. That rarely happens. “You expect me to read the appeal procedure?” I was told. I hope, but I know it’s a dream. 

Did you know investing in three different S&P index funds is not diversification?

If I come across as frustrated, even angry, I am. I spent more than half my life – unless I live to 101 – trying to educate workers about health coverage, their 401k, pensions and retirement with very limited success. I had one minor success though. Years ago I was in line at a DisneyWorld ride wearing a company cap. I man rushed up to me, “You’re Dick Quinn aren’t you? He then called to his wife back in the line. “This man saved our retirement.” he shouted. I was a bit embarrassed and pleased – but the line still wasn’t moving. 

A post I read and which received hundreds of likes, claimed health insurance is the only only major industry that is not regulated. Say what? 

In fact, all 50 states regulate insurance including health insurance. While they aren’t all the same, their general role is as a consumer protection advocate and insurance regulator. Most commissions must approve the premiums charged. Employer self-insured plans which cover 65% of workers are under federal regulation, including strict claim and appeal procedures, but who reads their summary plan description that costs employers a small fortune to prepare, produce and maintain? 

By the way, under such plans the insurance company that processes claims typically receives a fixed fee, but has no risk financial risk for claims paid. Employees rarely understand that. 

Every year I receive a copy of Medicare & You, a 130 page booklet explaining how Medicare works and the choices I have. Section 8 tells me my rights and protections and how to file an appeal. Section 2 describes what services are and are not covered. Page 29 says Part B covers “medically necessary” services. Some services are limited and covered only under certain circumstances. For example, acupuncture is covered for 12 visits in 90 days, but only for chronic low back pain without an identified cause. Starting on page 122 there is a detailed comparison of all the Medicare Advantage plans in my state. And yet, a fellow retiree recently lamented there was no easy way to see his plan choices. 

What’s on your reading list?

A person complained on Threads about the total he paid for all types of his insurance premiums, $40,000 a year he claimed. He concluded the entire industry was a scam because he hadn’t collected a penny. I call him lucky. I’d be very happy never collecting from any of my insurance. 

Not understanding the purpose of insurance is common. Failing to make the distinction between paying for a service and providing it is widespread.  If every insured person received in benefits an amount equal to or greater than premiums paid, there would not be any insurance companies and yet I read that health insurance is a scam because that doesn’t happen. 

Making the connection between premiums and claims paid is virtually non-existent. Instead, paying CEOs high salaries and providing personal jets is claimed where the money goes. 

Insurance is a pooling of risk designed to protect from unforeseen, generally costly, risk. You insure your home from the risk of fire and storm damage, but health insurance has morphed where the expectation is it should pay for even easily predictable, modest costs like vaccines and even inexpensive prescriptions. I have sixty bucks for a tattoo, but not a flu shot. 

I often used a auto vs health insurance analogy when talking to employees and during labor negotiations. I recall once at union negotiations explaining the parallels between auto and health insurance. The auto coverage paid for repairs, but did not provide the service. Health insurance paid for a surgery, but did not provide care.  Auto does not pay for oil changes. Health insurance did not pay for routine, preventive services (at that time). It didn’t go well. From the back of the room on the union side someone shouted, “are you comparing my wife to a car?”

Enough, I’m ranted out for 2024. 

I’m going to check my IRMAA premium for next year and my new Medigap and Part D premiums. Nobody told me once on Medicare my premiums would be five times what they were while working.