By Molly Mulebriar
Health insurance indemnifies insureds against loss. However, not all insureds are indemnified equally. One may receive more in benefits than another for the same health care services even though premiums remain equal across classes of risk.
For example, Tom gets an MRI costing $4,000 while Dick gets the same MRI procedure for $950 at a clinic ten minutes down the street. Both are the same age, work for the same company, and pay the same premium for health care. Yet Tom receives +400% more in benefit than does Dick. Is that fair?
Harry, who selected a high deductible plan option needs an MRI too. As a cash pay customer, Harry negotiates a cash price of $450.
Neither Tom, Dick or Harry see this inequity. In the case of Tom and Dick, they believe their benefits are equal since both have the same deductible, same copays, same out-of-pocket limits and identical premiums. This common ignorance is abetted by health care providers and their managed care partners through a scheme called Assignment of Benefits.
An Assignment of Benefits acts in two capacities. The first provides “free” credit to insureds at the point sale. Some view this an Entitlement Credit Loan. The second provides the health caregiver direct access to policy benefits.
Free credit, in the case of Tom, amounted to $25 down payment (copay) for $3,075 credit line. No credit history was necessary even though Tom’s credit score is dismal. The provider assumed the risk in the hope and belief the collateral (insurance policy) will be sufficient to cover the debt.
Dick’s loan required a larger down payment in comparison.
The Solution – Health Insurance Earned Income Credit
Since almost all health insurance indemnifies policy holders against unequal loss in today’s world, doesn’t it makes sense to end this discrimination by mandating equalization of indemnify loss for every American?
Tom, Dick and Harry’s MRI costs should be equal.
“It’s simply not fair Tom got $3,550 more in benefits than I did!” says Dick. “I demand equal benefits!!!!!”
To rectify the inequity Dick should be indemnified another $3,050 while Harry should receive $3,550, ensuring all three receive equal benefits. It’s only fair.
A government mandated Health Insurance Earned Income Credit would bring equality to all.