Don Daniels worked in the health insurance industry for 35 years. In this Q5 he discusses the complexities of health care and the need for a single-payer system.

Don Daniels worked in the health insurance industry for 35 years. In this Q5 he discusses the complexities of health care and the need for a single-payer system.

1. Don, with your experience of working 35 years in the health insurance industry what changes do you think would come with the Affordable Care Act’s replacement by the American Health Care Act?
The impact of the greatest concern for all citizens would be the number of persons who would no longer be insured. The AHCA change in tax credits and the premium surcharge for late enrollment will make insurance unaffordable for many people who now have coverage. The increase in the number of uninsured will contribute to increased premiums for everyone else because both providers and insurance companies would experience loss of income and their charges and premiums would go up accordingly. This will also eventually impact the premiums paid by those who have Medicare and Medicare supplemental policies. The ACHA change in the definition for qualified health plans about coverage for abortions could reduce the number of plans available in the exchanges. This also could ultimately result in increased premiums for everyone else.

2. As the national and state debates continue about the best way to deliver health care options do you think the ideas being put forward are addressing the real issues of providing good, affordable health care plans for all Americans?
The most recent debate in Kansas has been about Medicaid expansion which was the part of the Affordable Care Act (ACA) that Gov. Brownback refused to implement in Kansas. At the national level, they are now debating the American Health Care Act (AHCA) which is the long-awaited ACA repeal-and-replace legislation. However, these debates have little to do with health care, i.e. the delivery of services by providers to patients. The debates are all about who is going to pay for which services and how much they will pay. In most cases the four sources of payment are the citizens through tax-supported government programs, the insured through their insurance premiums, the patient out of pocket, and the provider through write-offs. So primarily the debates are about the impact on taxes and government budgets and how to shift the burden of the underwriting of health care to the providers and patients.

3. What are the root causes of the high cost of health insurance in the United States? What do you tell people who say they don’t want health care systems like in Canada and England because they don’t work?
The root cause of the high cost of health insurance in America is primarily the result of four factors. First is an increasingly older and sicker population of patients. Second is the high utilization of increasingly costly medical services. Advanced drugs and medical procedures are expensive. They are used even if there is no long-term health benefit. Third is the decreasing number of young and healthy persons purchasing insurance.
Fewer people paying who are not submitting claims increases premiums. Fourth is profit building by the providers and insurance companies. Higher premiums are needed to satisfy the business needs of the companies.
As for the systems in other countries it is a matter of perspective and how one defines a system that works.
So, I tell them that those systems work for everyone with no concerns about payment for the services. However, there may be a wait for elective services. Delayed services for some are better than no access to services for others.

4. How has the health care industry changed over your 35-year career?
When I entered the industry many health insurance companies were not-for-profit charitable organizations. Most employers provided health insurance for their employees. Providers did not have financial interests in the lab and radiology facilities to which they referred patients. Over time the number of for-profit companies increased and fewer employers provided insurance. Providers started receiving financial gain from services they prescribed. Also over the years various government entities started mandating benefits. These changes contributed to increased costs. The insurance policies were originally mostly fee-for-service based, i.e. a claim for each service was submitted by a provider or patient and the insurer paid based upon the contracted reimbursement rate with the provider. When this could not control the costs insurance companies introduced managed care and other business models to limit the number of services performed and the amount of reimbursement for them. Lastly, there were legislated changes such as HIPPA and COBRA that increased the administrative costs of the companies.

5. Would the passage of the Health Security Act of 1993 have helped Americans avoid many of the mounting problems they face each year as costs continue to go up? In your opinion, what is the only viable system that can now be implemented to protect all Americans and get health care costs under control?
The HSA of 1993 was similar to the ACA and AHCA in many ways. However, its stated goal was to be a universal health plan where every citizen and permanent resident alien would have insurance. If it had been enacted the problem of too few healthy people in the rating pools would have been avoided and our insurance premiums would be much lower now. It still had the issue of how to manage the utilization of health care and the enforcement of the mandated enrollment of people into the program.
The only system that can provide long-term financially sustainable insurance is a single-payer system that is government run with premiums paid through taxation. Some call this Medicare-for-all. Everyone who is subject to taxation or is a dependent of such a person is automatically enrolled and covered. Benefits are the same for everyone.
— Rimsie McConiga