American Health Care’s Good Old Days

With all the talk of Obamacare victims, it might be helpful to take a trip back in time to when acne and pregnancy were considered preexisting conditions.

National Journal
Lucia Graves
Nov. 8, 2013, 10:28 a.m.

Amer­ica’s health care sys­tem is in chaos. Or at least, im­per­fect. The pres­id­ent’s sig­na­ture Health­Care.gov site is riddled with prob­lems and, so far, not enough young healthy people have signed up for in­sur­ance to off­set the costs of caring for the old and the sick. Nev­er mind that pre­dict­ive mod­els say the young pro­cras­tin­ate on en­rolling.

If you’ve been fol­low­ing the news cycle, you prob­ably read the stor­ies about Obama­care’s vic­tims: the healthy, em­ployed couples mak­ing $70,000 or $80,000 a year, just above the sub­sidy threshold for Obama­care, who now need to pay a bit more each year for in­sur­ance. If you live in New York or San Fran­cisco, that may in fact feel like a hard­ship. But the reas­on that couples’ in­sur­ance is more ex­pens­ive now is be­cause in­surers are no longer able to dis­crim­in­ate against the less for­tu­nate, driv­ing up the costs for the re­l­at­ively healthy and wealthy.

To put Obama­care vic­tims’ strife in per­spect­ive, let’s take a trip down memory lane. You know, the golden years of Amer­ic­an health care in “¦ oh, let’s say 2007, back when you could be denied cov­er­age for something as be­nign as acne or as mundane as preg­nancy.

Back then, an­ec­dotes about people who were denied cov­er­age aboun­ded. They in­cluded this 12-year-old boy who died in 2007 from an abs­cessed tooth after his fam­ily’s Medi­caid lapsed. And this 17-year-old boy whose in­sur­ance was re­voked after he tested pos­it­ive for HIV. This wo­man who was denied cov­er­age for breast can­cer be­cause she wasn’t dia­gnosed at the cor­rect clin­ic. And this wo­man whose double mastec­tomy was denied after her in­sur­ance com­pany learned she had vis­ited a der­ma­to­lo­gist for acne treat­ment the year be­fore. Ah, yes, those were the days!

For those who put more stock in head­lines, here are a few that help con­vey the state of the Amer­ic­an health care sys­tem back in its hey­day.

From The Wash­ing­ton Post in 2009: “Acne, Preg­nancy Among Dis­qual­i­fy­ing Con­di­tions.” From the As­so­ci­ated Press that same year: “Work­er Health Care Costs Soar.” From USA Today in 2007: “People Left Hold­ing Bag When Policies Re­voked.” And from The New York Times in 2004: “Cost of Be­ne­fits Cited as Factor in Slump in Jobs.” And in 2002: “Hard De­cisions for Em­ploy­ers as Costs Soar in Health Care.”

Of course head­lines and an­ec­dotes are a hor­rible way to ex­plain health care policy. For those of you who want a more thor­ough jog­ging of your memory, here’s a roundup of some of the wonki­er stor­ies.

From the Har­vard Busi­ness Re­view in Novem­ber: “In 1980, the na­tion­al ex­pendit­ure on health care in the United States was just over 9% of Gross Do­mest­ic Product. Today it ac­counts for nearly twice that — close to 18%.”¦ Health in­sur­ance premi­ums rose four and half times faster than the rate of in­fla­tion over the same peri­od.”

From Kais­er Health News in 2009: “Em­ploy­ers strug­gling with the steady rise of health in­sur­ance costs — which in 2009 in­creased 5 per­cent to an av­er­age of $13,375 for fam­ily cov­er­age — are passing on more of the ex­pense to their work­ers through high­er de­duct­ibles and co-pay­ments, ac­cord­ing to sur­vey re­leased today.”

From Mc­Clatchy in 2009: “The av­er­age cost of job-based fam­ily health in­sur­ance climbed 5 per­cent to $13,375 in 2009, mak­ing this the 10th straight year that health care premi­ums have in­creased faster than work­ers’ wages and over­all in­fla­tion have. In­sur­ance costs have in­creased 131 per­cent since 1999 … that su­per­charged growth rate far out­paces the 38 per­cent in­crease in wages and 28 per­cent growth of in­fla­tion over the same peri­od.”

From The New York Times in 2008: “Since the re­ces­sion of 2001, the em­ploy­ee’s av­er­age cost of an an­nu­al health care premi­um for fam­ily cov­er­age has nearly doubled — to $3,300, up from $1,800 — while in­comes have come nowhere close to keep­ing up. Factor in oth­er out-of-pock­et med­ic­al costs, and the por­tion of the av­er­age Amer­ic­an house­hold’s in­come that goes to­ward health care has ris­en about 12 per­cent, ac­cord­ing to the con­sult­ing and ac­count­ing firm De­loitte, and is now ap­proach­ing one-fifth of the av­er­age house­hold’s spend­ing.”

For those par­tial to stud­ies, there’s no short­age!

From Kais­er Health News in 2013: “Cur­rently, about one in five plans sold to con­sumers makes them re­spons­ible for at least half their med­ic­al costs after they’ve paid their premi­ums and met their de­duct­ibles, ac­cord­ing to an ana­lys­is of gov­ern­ment data by U.S. News & World Re­port and Kais­er Health News.”

From the Com­mon­wealth Fund in 2012: “Most adults who try to buy plans in the in­di­vidu­al in­sur­ance mar­ket find it dif­fi­cult to com­pare plans and find af­ford­able cov­er­age.”

From Academy Health in 2011: “On av­er­age, premi­ums for people who stayed in in­di­vidu­al mar­ket plans for more than a year went up 15% per year.”

From the Health And Hu­man Ser­vices De­part­ment in 2011: “Ac­cord­ing to a new ana­lys­is by the De­part­ment of Health and Hu­man Ser­vices, 50 to 129 mil­lion (19 to 50 per­cent of) non-eld­erly Amer­ic­ans have some type of pre-ex­ist­ing health con­di­tion “¦ without the Af­ford­able Care Act, such con­di­tions lim­it the abil­ity to ob­tain af­ford­able health in­sur­ance if they be­come self-em­ployed, take a job with a com­pany that does not of­fer cov­er­age, or ex­per­i­ence a change in life cir­cum­stance, such as di­vorce, re­tire­ment, or mov­ing to a dif­fer­ent state.”

From the Com­mon­wealth Fund in 2009: “On av­er­age, small firms pay up to 18 per­cent more in premi­ums than large firms do for the same health in­sur­ance policy.”

And for any­one look­ing for an ex­plan­a­tion in one chart, there’s this:

SOURCE: Kais­er/HRET Sur­vey of Em­ploy­er-Sponsored Health Be­ne­fits, 1999-2012. Bur­eau of Labor Stat­ist­ics, Con­sumer Price In­dex, U.S. City Av­er­age of An­nu­al In­fla­tion (April to April), 1999-2012; Bur­eau of Labor Stat­ist­ics, Sea­son­ally Ad­jus­ted Data from the Cur­rent Em­ploy­ment Stat­ist­ics Sur­vey, 1999-2012 (April to April). (The Kais­er Fam­ily Found­a­tion.)

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