One more way a bad health care bill can backfire

As you ought to know by now, the health care legislation taking place in Congress right now is largely modeled on the reform legislation we have been living with in Massachusetts for the past three years. Insurers are required to issue coverage to everyone and they can't do medical underwriting. They can charge more to older customers, however. There is an individual mandate -- everyone must have insurance or pay a fine. There are subsidies for low-income people, but for those who don't qualify for the subsidies, insurers are required to offer a so-called "affordable plan" which has some minimum benefits but also has high co-pays and deductibles.

The net result is that there are people who are forced to buy the "affordable plan," for whom it is not really all that affordable, but what is worse, it doesn't actually cover their health care needs. They are out of pocket for much of routine care, because of the deductibles and co-pays, and they can't afford their share of any major expenses they may incur so they don't get necessary surgery. People over 50, whose premiums are more expensive, may be in this category; so are people on the other end, as it were, students and recent graduates who are impecunious.

The insurance companies are taking advantage of the individual mandate to totally screw students. Sayeth the Globe:

After heavy lobbying by the student group, the state began requiring schools to track and report data they had never before collected. That information was compiled in the report released last month.

It showed that, on average, 30 cents of every premium dollar goes toward profits and administrative costs, compared with 12 cents for plans sold to the general public. The remainder of the premiums is what is used to pay medical bills.

Students attending state schools face the greatest disparity: 45 cents of every insurance dollar they pay goes to profit and administrative costs, according to the state’s data.

Although students are free to buy more expensive policies, many are covered by plans that cap payments at $50,000 a year per injury or illness, leaving them vulnerable to enormous medical debts. Some plans place even lower limits on prescription drugs and doctor visits. The report showed that in the 2008 school year, 951 students exceeded caps for medical services provided outside of hospitals.

BTW, let us name names: Aetna and Nationwide are pocketing the majority of the vigorish. A student writes:

I am a graduate student . . . enrolled in the Aetna Student Health Plan. After months of agonizing stomach pain, I recently learned that I need to have my gallbladder removed.

My plan only covers 80 percent of surgical costs, which may be quite high even for this routine outpatient procedure. I am now faced with an impossible decision: Do I get the surgery soon, but rack up several thousand dollars in debt (on top of my student loans)? Or do I skip the surgery, hope my stomach aches don’t keep me out of class, and pray to find a job with decent health insurance coverage when I graduate in the spring?

I pay more than $3,200 a year for my insurance, plus a school health fee of more than $600 for my primary care. For nearly $4,000 a year, I shouldn’t be forced to suffer through stomach pains because I cannot afford the treatment.

Dear Senator Reid: What do you think will happen to the Democratic Party if you give in to Joe Lieberman and Evan Bayh and pass legislation that does this to all the college students in America? Why do you think that is smart?