Why Patients Need To Opt Out Of Third Party Health Insurance

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By Dr. Richard Amerling

If the mandate to buy insurance survives constitutional challenges, individuals should consider defying the mandate and not purchasing insurance.  Why is opting out a sound idea for patients?

All third party payers limit options.    Limitations will by necessity become more stringent as the system expands.   The idea that “universal coverage” will make everything available to everyone is absurd.  Care is a finite resource and it will be heavily rationed.  Trading liberty for the illusion of “free” care is a fool’s bargain.

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Limitations begin with choice of physician.  While many plans (even Medicare!) partially reimburse payments to out-of-network physicians, it’s discouraged by the financial structure.  As more physicians drop third party payment, choices will become even more limited.  Since the 21% cut in Medicare reimbursement to physicians did go through on April 1, Medicare beneficiaries will find it harder to find a physician.

Since participating physicians’ reimbursement is constrained, large numbers of patients are needed to generate adequate revenue.   There are frequent distractions by requests for “prior authorization” (see below) and other time-wasters.  The result is crowded waiting rooms followed by brief, rushed, and stressful encounters with the doctor.  High quality care is rendered all but impossible.

Payers try to control costs by limiting access to consultants, expensive tests, drugs, hospitalization, and procedures by requiring “prior authorization” before approving payment.  This is usually a time-consuming, frustrating phone conversation with a minimally educated person who goes through inane screening questions prepared by an accountant.  Many doctors are so fed up with this process that they become reluctant to order anything out of the ordinary.

Participating physicians agree to periodic chart audits by the payers.  This is a blatant violation of medical confidentiality.

Choice of drugs is limited by a formulary—a list of “approved” drugs.  The list is set up to maximize profit for the pharmacy benefit managers (e.g., Medco) by promoting drugs for which they have negotiated low prices.  All patients are unique and drugs are idiosyncratic.  It is to the patients’ advantage to have a broad selection of pharmaceuticals, not a narrow one.

Increasingly, treatment decisions are being controlled by payers through “payment-for-performance,” where doctors get a bonus for treating according to official “practice guidelines.”  I will go into more detail about this in my next column.  For now, suffice it to say that this promotes a “one-size-fits-all” approach—the antithesis of good, individualized care.

The best solution for the vast majority of citizens is to open and fund a Health Savings Account (HSA) linked to a high-deductible policy to insure against catastrophic illness.  Routine health-related expenditures such as office visits, drugs and many tests would be paid for directly from the HSA.

Unused money grows, tax-deferred, year to year.  Most people would never need to trigger their policy, and such insurance would be very cheap.  Some states impose coverage mandates that make such arrangements impossible.   This is why across-state sale of health insurance has so much appeal, and also why it was never considered by the ruling class in Washington, DC.   ObamaCare is expected to extend mandates to all states, creating “Cadillac plans” for all with the stroke of a pen.

Thousands of new rules and regulations from newly minted bureaucrats will determine the gory details of ObamaCare.  One thing is clear—the government will force insurance companies to accept all comers, regardless of pre-existing conditions.  It may therefore be economically advantageous to not buy insurance! Take that $10,000 per year and put it into a savings account.  HSA contribution limits will be lowered, but they have not been outlawed.

Even if the tax penalty for non-compliance survives legal challenges, most will be better off financially, and more in control of their lives.  It may also be wise for seniors to opt out of Medicare Part B and D (doctors and drugs) and pay for these services directly.  Part A, which is mandatory, covers hospital expenses.

Relying on government for health care is exactly what the statists want.  But no government can ever deliver health care.  Medicare and Medicaid are already broke, and neither can sustain the expected growth.   The system will implode.

Together with the growing community of opted-out physicians who will compete for patients on quality and price, a thriving free market will be created that will actually deliver health services to ever-greater numbers of patients.

Richard Amerling, MD, is a nephrologist practicing in New York City.  He is an Associate Professor of at Albert Einstein College of Medicine in New York, and the Director of Outpatient Dialysis at the Beth Israel Medical Center. Dr. Amerling is the author of the Physicians’ Declaration of Independence (http://www.aapsonline.org/medicare/doi.htm).


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