Bad advice

Below is a funny letter to the editor from the Indianapolis Star - view the original

The Aug. 1 editorial, "Do-it-yourself fixes for high health costs," neglected one significant step consumers can take to hold down costs: If you are relatively young and healthy, don't buy health insurance. Learn to distinguish between the cost of health insurance and the cost of treatment, and be aware that for the large majority insurance premiums are approximately five to 10 times the actual cost of medical care in any given year. For a family of four, the break-even point is about $4,000 to $5,000.
James Huston
Rushville

This advice works just fine if you can see the future. The problem for most people is that, they can't. If you don't have any health insurance and have over $4,000 to $5,000 worth of medical expenses, you're not going to be able to get health insurance. It's like trying to get homeowners insurance after your house burned down or auto insurance after you've totalled your car.
The best solution for the young and healthy is to get catastrophic health insurance that will give them an exposure similar to what James was talking about (between $4,000 to $5,000) in deductible or deductible/ coinsurance mix. Tonik from Anthem Blue Cross Blue Shield is targeted right at that age group. The only problem with the Tonik plans is that they don't cover brand name prescriptions, but that is usually the lowest probability for that age group. It's all a gamble in the end.

Mergers limiting choice

At the end of 2005, Anthem Blue Cross Blue Shield merged with Wellpoint to become the largest health insurance company in the nation. Although that merger didn't remove any competing health insurance companies from the Colorado market, it did give the smaller companies even more of a competitive disadvantage.

The real mergers limiting choice over the last 2 years are when PacifiCare merged with American Medical Security (AMS), United HealthCare merged with Golden Rule, then PacifiCare/AMS merged with United HealthCare/Golden Rule. This will effectively take 4 competing health insurance companies out of the Colorado market and replace them with one super company the size of Anthem/Wellpoint. I'm sure smaller companies like Celtic, Time, IAC, etc, are feeling the pinch and also discovering a need to merge with somebody to stay competitive. Hopefully, Kaiser or Humana won't feel a need to merge with anybody in the near future.

Just think if [Anthem/Wellpoint] and [PacifiCare / AMS/ United/ Golden Rule] were allowed to merge??

The Impact on Doctors

Not only are these mergers taking a toll on the choice health insurance clients have in Colorado and the benefits the competition creates for them, but doctors and hospitals realize a huge disadvantage in their negotiations with these insurance companies. If you belong to a managed care plan like a PPO, the health insurance company will tell you which doctors and hospitals are "in-network" and you will go to those to get the in-network benefits. Before these mergers, United HealthCare (for example) might have come to me (as a doctor) with a contract that would pay me very little for my services. I might have been okay not agreeing to the United HealthCare contract because I would still get plenty of business from being in-network for other companies like PacifiCare, AMS, or Golden Rule. After the merger, the new company of [PacifiCare /AMS /United/ Golden Rule] will have a lot more bargaining power knowing that I might not get enough business without their clients.