The Odd Thing About Insurance

by Joanna Smith on Feb 7, 2013

I was in the waiting room of a doctor’s office recently, and I overhead a patient talking with the receptionist.  She was saying she would wait to have a skin biopsy scheduled because she was only a few months from being on Medicare.  She currently had a high deductible insurance policy, and if she had the procedure done now, she would have to pay for it completely herself; if she waited for Medicare, she would only pay a very small amount for the procedure.

This conversation started me thinking about insurance in the U.S..  In an attempt to offer policies that people could afford, insurers designed and started to offer “high deductible” policies where the initial $2,500 or $5,000 or even $7,000 would be paid by the consumer and then the insurer would step in if the yearly amounts for healthcare exceeded that amount.  The problem, of course, is that many people started using their insurance as a “major medical” policy only and did not seek routine care because they would be responsible for the cost of the care.

Enter Medicare, where there are HMOs and Original Medicare–each of which costs the patient much less when they need a procedure or other care.  But that is exactly the problem:  people who must self insure defer care during the years they self-insure.  They build up “unmet need” by the time they are Medicare eligible, and  Medicare will then cover it.  This is the opposite of the way medical care needs to be delivered.

If we are to reduce the cost of Medicare, let’s start with providing complete care for people in their earlier lives so they won’t build up so much unmet, expensive care needs as they age.  Yes, older people have serious and complex medical conditions, but some of those are the result of deferred care earlier in life.

We need to start with government-funded care for everyone early in life: early intervention saves later intervention.  If we want to reduce the cost of Medicare, we have to start providing care early in life,  ensuring good access to care.  It will be cost-effective and it will be good care at the right time.