For those of you unfamiliar with the health insurance terms in this news clip (the full clip as its discussed), it goes like this.
Each month if you have health insurance, even if its covered by an employer, you pay a monthly premium fee. Some plans are $40 if you have a good employer, some charge $80-150 a month. This is taken out of your paycheck automatically. When you enroll in a plan you cannot unenroll, even if you don't like the plan you are put into. The plan requires you to visit a network of doctors that accept the insurance plan. You do NOT choose your own doctor in a real sense, but most people don't mind if the insurance network has a lot of members and you have some choice within the plan. Usually if you go to an out of network doctor, regardless if its a PPO or HMO plan, they will charge you exhorbitant fees and more than double your deductible.
If you have to purchase insurance on the market if you don't have employer sponsored care, its almost always more expensive. It will usually cost $200-1,000 per month depending on your medical history for coverage.
After paying your monthly premium, you must meet your yearly deductible that starts every calendar year. The standard deductible today is $500, many people are being coerced into a $1,000 deductible. Before insurance coverage even begins to go into effect you must pay $500 or $1,000 of care.
After you pay the premium and you pay the deductible for the year, insurance finally begins coverage. After coverage starts, many insurance plans still have co-insurance fees. Most employers no longer offer fully covered medical care. Co-insurance fees are anywhere between 10% and 50%.
So AFTER paying a premium and the first $500 or $1000 of your medical care for the year, you still will pay 10% to 50% of the fees after insurance starts to pay. So if the service is $1000 and you have a 10% coinsurance its going to charge you $100 out of pocket.
That's how PPO, HMO, and Indemnity plans work in the private market whether employer sponsored or not.
People on lower incomes who make $8-10/hr many times cannot easily afford the $500 out of pocket deductible and then coinsurance AND premiums, so this is the group of insured people who still can't access health care easily. This category is called the underinsured. Many times their deductible is $1000 or more.
Employers who choose to do the right thing are at a market disadvantage. Since government does not handle any responsibility unless its the poor or elderly, the working and middle class work for companies that must compete with one another. When Company A does the right thing and offers $0 deductible insurance (which is increasingly rare today) the company must spend more of its capital on health care, and it puts it at an economic disadvantage in regards to Company B who may be spending far less on health care because they do not offer care or offer much poorer services (like making their workers pay $1000 deductible before coverage starts, with a 20% coinsurance fee).
So Company A who spends and spends is at a market disadvantage and the company is likely to fail competing with the business spending less on health insurance. This is one of the biggest reasons for GM's insolvency in the global marketplace. But, its just one company. It happens across the board. Walmart offers cheaper products because it offers poor benefits, and Costco offers a beefier health insurance program to its employees with higher pay. Costco is at a disadvantage even though its corporate business practices are on a higher ethical standard.
And the list goes on and on...
...and conservative Republicans say government has no significant role to play in this situation.
