During the healthcare reform debates, Republicans and others argued that malpractice awards and the litigation surrounding them contributed to the high cost of health care in this country.
I suggest they might be looking in the wrong courtrooms.
Last week I wrote about the new age 26 rules and the costs that don’t get counted towards the already outrageous costs of health care, costs that are born by employers as they split hairs on eligibility rules.
Rather than a simple system of universal eligibility that opens one door to everyone, the United States has built a system of silos that forces Americans to navigate a maze of rules that makes distinctions based on relationships, age, residence, economic status, and other criteria.
Some get lost trying to find the right door.
Some end up in court.
In fact, there are whole industries built around two such silos, and that overhead is not counted towards the cost of health care. Such expense only makes sense in a through the looking glass world where ideology trumps practicality.
We hear of deadbeat dads (and moms). But often the child needs, not just financial support, but access to health care. The effort to obtain financial support from the non-custodial parent is often accompanied by an effort to obtain medical coverage from that parent’s employer. That results in Qualified Medical Child Support Orders (QMCSO). Every county in the United States has a bureaucratic apparatus that keeps this system oiled. It took federal legislation in 1993 to standardized and streamline an even more cumbersome process so that disputes about medical child support didn’t devolve into disputes about local processes and definitions.
There is a court that adjudicates the dispute between the employee with health care coverage (the non-custodial parent) and the custodial parent. And then there is a child welfare agency inside the court system or county government that enforces the QMSCO and mediates between employee, employer, custodial parent and child.
There needs to be someone at the employer sponsored health plan who receives, responds and processes these documents. A small plan may not encounter a QMCSO very often so they may lose an occasional day or day and half as they try to figure out what this strange multi page form means or is asking them to do. A larger plan sponsor may have a dedicated staff member or even a department.
Who pays for this elaborate dispute resolution process erected soley to determine a child’s eligibility for health care?
Did I hear someone express a concern about government bureaucracy driving up the cost of health care. I would love someone to challenge me on this, but this cost does not show up in the National Health Expenditures accounting. It does show up in our tax bills, because it is paid for from local tax dollars – tax dollars that are already stretched thin.
And how does it add value to the health and the health care of the nation’s children? How do you justify that cost compared to a system of universal eligibility?
Workers’ compensation was designed to provide an efficient system for responding to workers’ injured on the job. It was intended to be a no-fault system, but has degenerated into a highly litigious one.
When employers dispute a workers’ compensation claim they are disputing both the wage replacement and the cost of medical care. Medical care is eating up an increasing percentage of total workers’ compensation cost.
When a workers’ compensation case is denied initially, the claimant may appeal the decision to a higher administrative process and sometimes to a court. Meanwhile, if the claimant has other insurance, the other insurance will pay related medical expenses. Most plans have an exclusion for work related injuries.
As an aside, does it even make sense for an employer sponsored program to have an exclusion for work related injuries? Only in a world that feels the need to have different insurance companies pay for each type of claim.
If the claimant wins their appeal, the payment is made to the claimant and not to the insurance companies who already paid the medical bills. Every insurance company has an Other Party Liability department whose responsibility it is to track down exactly those situations in which someone else might be paying for medical claims it already paid for.
Does this system contribute to the efficient delivery of health care services? It is only moving money around.
Who pays that bill?
Age 26 – Things I have learned.
Questions posed on the blog MoneyFunk have taught me some things about the age 26 requirement since my post last week.
- It does not apply to “stand alone” retiree plans
- It does not apply to children who are on Tri-Care, the program offered to the families of soldiers and sailors in the military.
- At least one employer seems to think it does not apply to prescription drug programs.
- Everyone is confused about the effective date.
Some people react to these bureaucratic quirks by suggesting a return to the status quo ante. I argue that they highlight the illogic of the current system that depends on hair splitting and disaggregation.
We need to move to a single system of simplified eligibility – a simplified mechanism of delivering patients into the health care system. It will make for a more efficient delivery system, more efficient labor markets and more efficient business enterprises.