Rosalea Barker : Health And Taxes

When I was in New Zealand in late 2013, I was shocked to see an ad on TV that brazenly encouraged a “use it or lose it” attitude towards health insurance coverage. Shocked because I had no idea NZ was heading down the path towards health insurance being a common thing, and doubly shocked because the ad was promoting such an irresponsible attitude. Irresponsible because it encourages people to think of their healthcare as a commodity that has to be consumed irrespective of whether you need it or not.

US healthcare insurers, despite knowing that they will never have to pay out to policyholders anything close to what they take in from them, would never use that lure to hook policyholders. Perhaps they did decades ago, but nowadays employers and the government just shovel hapless healthcare consumers their way. Consider this a cautionary tale, in the event the NZ government ever relinquishes healthcare to corporations.

::The mandate::

I’m writing this a week before the February 15 deadline to enroll in a healthcare insurance plan or remain uninsured and pay a penalty in my federal taxes at the end of the year.

Last year, I didn’t have insurance, so I paid a “Personal Responsibility” penalty equivalent to 1 percent of my income; next year, the penalty will be 2 percent. Frankly, I preferred to pay the penalty—it will go directly towards subsidizing government-sponsored healthcare. If I’d paid for health insurance through Covered California (our state’s version of Obamacare), the government’s money would have subsidized health insurance companies instead, on my behalf.

I had no interactions with any healthcare system last year—no doctor’s visits, prescription drugs, labs, or radiology—and I take commonsense care of myself to see that things stay that way. Still, there is always the possibility that they won’t, or that I will be involved in some kind of accident—as small as twisting my ankle or as large as getting hit by a car.

The Covered California brochure addresses those random possibilities in the first paragraph of the pamphlet I picked up at an enrollment session at the local library yesterday: “Health insurance protects you from the what-ifs of life and can bring peace of mind…” Universal healthcare—the kind that used to exist undiluted in New Zealand—provides the same protection from what-ifs, along with peace of mind, without turning it into a complicated system that works to the advantage of the people providing the care at the expense of the people who need it.

::Some thoughts about insurance in general::

Insurance is just a form of gambling. Insurance companies make a bet that the event they are insuring against will never eventuate. My negative view of insurance, however, stems from my perception of it as a kind of “reverse usury” in which I lend the insurance company my money on the understanding that I might, just might, get it back one day. In the meantime, any interest earned on that money goes to them, and I have no guarantee that they will ever pay it back to me by settling my insurance claim. (Christchurch, anyone?)

Healthcare insurance companies in the US are notorious for the ways they wriggle out of paying the money back to the folks who are lending them money via insurance premiums. The Wikipedia entry for Health Net, for example, lists several controversies about the methods they used to avoid payouts, and the stipulation in the 2012 Affordable Care Act that a person cannot be denied coverage because of an existing condition is there because those instances are the norm for all healthcare insurers, not the exception. (I chose Health Net as the example only because it is the company I was insured through when I had employer-subsidized insurance.)

Of course, you could argue that people are pooling their money by putting it in the insurance company’s account. It’s that pool of money that allows some people to “get back” far more than they loaned out. But the huge profits made by those companies belies any notion that this is somehow a fair and balanced way of doing things. Health Net’s 2013 total revenue was $11 billion, its gross profit was $2 billion, and its net income applicable to common shares was $170 million.

::Getting help to decide::

The first major decision around healthcare insurance has already been made for me—my income is just slightly above the amount that would qualify me to get free or low-cost and more comprehensive healthcare through California’s state-run, federally subsidized, system Medi-Cal. So I have to choose between a plethora of plans from private companies, as evidenced on the Covered California website here. It perplexes me that nowhere on the website is it explained how the difference between what I have to pay and what the insurance company is going to get from the federal government via a tax credit linked to my IRS account works. So, I decide to go to a free advice/enrollment session at my local library.

There, I am hooked up with a licensed insurance broker, certified as a counsellor by Covered California. She avoids answering my one question—how does this work in practice?—to concentrate on getting me enrolled. I assume by her pushiness that she gets a commission. When I explain that I’ve already started the enrollment process online myself but cannot get any further because I have to find a document I put in a “safe place” several years ago, she says she’ll be there for two hours and I could go home and get it and come back to her. (“Safe place” is code for “somewhere no one will find it, including me.”)

There isn’t any need for me to log onto the website using my own credentials in order for her to see what I’m asking about, and she surely does know the answer because she repeats several times that the plan she wants to recommend to me is the one she’s had for the past year. But still, she tries to get me to log on. Mistaking my refusal to do so for extreme wariness about privacy concerns and identity theft, she shows me her listing on the Covered California website page of certified counsellors, complete with photo.

When I still insist there’s no point in my logging on, she finally loses interest and I leave none the wiser. Back home, I cheer myself up with repeated viewings of this TV ad for pizza that actually has a *happy* ending when someone decides to abandon technology to walk somewhere to talk to people.

::The deciding factor::

Quite apart from the “what if” uncertainty factor, the 2014 change to Republican control of Congress has introduced a whole new level of uncertainty. It’s all very well to have assurances that Obama will veto any Act of Congress that tries to repeal or roll back parts of the 2012 Act that established health insurance exchanges like Covered California, but will he be able to? And what about an upcoming Supreme Court decision that might invalidate parts of it anyway?

There is also little comfort in knowing that the 2015 rates have been “locked in” with the healthcare insurance providers. What if the rates stay the same, but the federal subsidy is taken away by the Republicans, leaving individuals liable for the full amount each month? Millions of people are only able to enroll because of the subsidies—they have no hope in hell of actually paying the full price of the premium.

Healthcare insurance is a dog’s breakfast, and I have no desire to eat it at all. Don’t ever, ever let anyone put it on your plate, New Zealand.

--knock on wood—

rosalea.barker@gmail.com

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