Insurance

Has your health insurance got you flummoxed? Basic coverage, maximum allowable benefits, UCRs, annual deductibles? Who's covered? What's covered? I don't know! No. He's on third. An old Abbott and Costello joke. But it's no joke for the consumer and insurance policy holder. Health insurance is as complicated today as your auto insurance. And has as many various coverages. You must understand it and you must read the fine print.

The incentive for doctors is to periodically increase their fees, in keeping with inflation, Cost Of Living Adjustment increases, and beyond, rather than lower them, knowing their colleagues would soon follow suit. Arrangements that maximize income are always going to be looked upon favorably by those whose incomes are maximized. As more Americans were covered by health insurance, the doctors' incentive or desire to compete by way of lowering prices was removed, thanks to insurance companies' UCRs.

As you can see, dental or medical insurance is not written the way auto insurance is. Imagine an automobile insurance company writing a policy on a very expensive car (Mercedes), guaranteeing to pay for any needed repairs by any mechanic of the owner's choice, regardless of cost, but not requiring the owner to have the car regularly maintained, inspected, or used in a prudent manner. If the owner never changed the oil or checked the radiator hoses, if he added dubious substances to the fuel, or to himself, to improve his immediate driving pleasure, the company would have to pay for the eventual results. Needless to say such a company would be out of business in short order.

That is precisely the way most medical and dental insurance policies are written today. No stress on prevention and education. Merely insure the client, ensure the profit, pay the bills, collect the premiums, and bank the balance.

Medical and dental insurance are sold by insurance companies or carriers such as Metropolitan Life, Travelers, Cigna, Prudential, ad infinitum. These are for-profit companies similar to Ford, General Motors, Macy’s, or your local pizza place. Then there are Blue Cross and Blue Shield; known professionally as the Blues. The Blues, like the brothers of Saturday Night Live and film fame, are, ostensibly, not-for-profit.

All insurance policies are sold by insurance salespeople to businesses, unions, associations and any small or large group of people under one figurative roof. Different policies encompass different coverages. Does all this sound familiar? Just like your auto insurance? It is.

Your carrier is well aware that dentists and physicians inflate their fees. They learned that from their auto policy holders and auto repair shops when presented with a repair estimate. That is precisely why insurance companies now send out their own adjuster who insists that you get more than one estimate and also provides the insurance company with his and yours. And you can bet his estimate is lower than your repair shop's.

Why do insurance companies such as Prudential, donate huge sums of money to both political parties to guarantee their piece of the health care pie? Because health care policies, on a fee-for-service basis, are very profitable for them.