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Our Top 10 Favorite Health Insurance Company Innovations

Critics of health reform argue that we only need to unleash the power of the free market to drive down costs and improve quality. It is the innovation of the private sector that will save us, they say. So in honor of those who tout the miracle of the market, here are our top ten favorite innovations of private health insurance companies. (Feel free to add your own.)

10. The “in-network” and “out-of-network” doctor. Want to choose your own doctor? Sorry, not with private insurance. To get covered you have to go to the right doctor and the right hospital. If you guess wrong and go to an unapproved hospital you could get stuck paying thousands of dollars in medical bills. To keep things exciting sometimes a hospital will be “in-network” but the doctor who treats you at the hospital will be “out-of-network”. It’s all part of the fun.

9. Bills that aren’t bills. After any hospital stay the paper begins to pile up. Some of the papers say that you owe money and some say that you don’t owe money and some say that you might owe money at some unspecified later date. Many of the papers will look exactly like bills but red writing across the top will helpfully explain “This is not a bill”.

8. The for-profit nonprofit. Blue Cross and Blue Shield companies across the country are mostly nonprofit, but they act like for-profit companies. Blue Cross and Blue Shield of North Carolina owns subsidiary for-profit entities and pays its CEO more than $4 million per year. But BCBSNC does not have any real oversight from shareholders or the Securities and Exchange Commission.

7. Charging women more than men for the same coverage. Let’s face it, women keep having children. When women have children they demand a room and a bed and all kinds of services that men of the same age rarely use. Luckily, insurance companies have figured out how to saddle women with the expenses of childbirth instead of making men, and society at large, share the costs. After all, men didn’t have anything to do with the pregnancy.

6. Medical underwriting. Slicing and dicing the risk pool doesn’t end with charging women more than men for the same coverage. Insurance companies have developed elaborate models to justify charging people more or less according to geographic area, age, gender, height, weight, eye color, shoe size, etc.

5. Drive-through deliveries. Speaking of childbirth, one of the things women want to do after having a baby is sit around all day in the hospital. Insurance companies tried to end this blatantly lazy behavior by kicking women out of the hospital after less than a day. Pesky government meddlers enacted new regulations that allow women to hang out for 48 hours after childbirth. This is a sad case of thwarting the free market.

4. Lifetime caps. If you break an arm or scrape a knee you should know that your insurance company is there to help you pay the bill. But if you are going to get hit by a car or take a trip to intensive care, well, the insurance company isn’t going to sit around paying bills forever. After a certain amount you reach your lifetime insurance limit. That will teach you not to get cancer.

3. Rescission. We can all agree that people with sloppy handwriting or those who lie about acne medication don’t deserve health insurance. To help fight this scourge, insurance companies developed something called “rescission”. If you get sick then insurance companies will pore over your application to find mistakes or omissions. If you forgot to include something then you can get booted off of insurance and the insurance company can even pursue you for back payments. That’s innovation at its best!

2. Swiss cheese health insurance policies. People keep complaining about expensive health insurance but I see ads everyday stapled to telephone poles for plans that cost only $39.99 per month. You can’t beat that. Some will complain that these policies don’t cover heart attacks, ambulance rides, hospital stays, doctor visits, internal injuries, external injuries, broken bones, or cancer. But you can’t please everyone, and $39.99 per month is a great price.

1. The pre-existing condition. This is the king of insurance industry innovations. Medicare will cover you even with a preexisting condition, but why would a private company that is trying to pad its bottom line want to offer coverage to someone who might get sick? Insurance companies want to collect money, not pay it out. So if you’ve ever had an illness insurance companies will refuse to offer you coverage. Or better yet, the insurance company will offer coverage for a mere $2,000 per month.

I don’t understand why President Obama would want to thwart any of these great American inventions.

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