Response to Paul Hodes

I would like to share an email that was shared with me.  Varrin Swearingen wrote this in response to an email from Paul Hodes asking for feedback about health care.

This letter is posted in full with permission by Varrin.

Congressman Hodes,

Thank you for your email. As far as I am aware, this is the first time you've asked me directly for my opinion on this or any other topic. I'm happy to provide you with my opinion. I'll insert my comments amidst selections from your email below:

On Monday 28 September 2009, Congressman Paul Hodes wrote:
> Do you believe that we should reform the American health insurance system?
> -Yes, it needs significant reform
> -Some minor improvements should be made
> -No, the health insurance system is fine just the way it is
> -Other

I think "Other" is the best answer for me. While insurance law itself may require some reform, I believe there is one important change that may be more effective than most others.

Currently, it is the most common practice that employers offer health insurance as a benefit for employees. Sometimes the employees pay a minor portion of the premiums and sometimes none at all. For good insurance plans, the employer portion of insurance premiums has risen to very-high levels (I believe mine is well over $1000 per month). Employees who use the plans often are unaware of that cost until they have occasion to pay it themselves (via COBRA or otherwise due to change of employment or unemployment).

A fundamental cause of this practice is the tax code. While not directly related to health insurance itself, the tax code favors employers offering such benefits. Those benefits are an expense to the employer (reducing their taxable income) and a non-taxable benefit to the employee. However, if those dollars were placed directly in the hands of the employee, money spent on those benefits would no longer be a non-taxable benefit to the employee. The employer keeps their tax benefit (salary and other expenses are all expenses), but the employee is now taxed on that extra income.

The solution to this problem is simple: make all spending for all people for all health-related expenses tax deductible. The incentive would then change so that employees could purchase plans directly if they wanted to without adverse tax consequences. Those employees, then, could keep those policies personally when changing jobs or retiring.

> Are you satisfied with your current health insurance plan?
> -Yes, I am satisfied
> -No, I am not satisfied
> -I am currently uninsured
> -Other

"Other" represents the best answer here. I am satisfied with most aspects of my health insurance plan. I only have two areas in which I'm dissatisfied.

The first area of my dissatisfaction is the total cost of the plan. My portion of the premiums is acceptable to me, however my employer's portion continues to escalate at an unacceptable pace. This is attributable to many factors, however government regulation is a significant contributing factor. Because government regulation is something you are involved in, you could help by forwarding legislation to reduce government regulation. Specifically, a substantial deregulation of the FDA may save half or more (some estimates as high as 85%) on the cost of prescription drugs in the long run.

The second area of my dissatisfaction is my health insurance company's actual and threatened inappropriate denial of claims. This comes in two forms. First, my health insurance company often (not always) denies claims the first time around due to 'administrative' errors. It is my belief that they do this as a matter of policy to delay or avoid payment of legitimate claims which results in a significant financial benefit for them. This practice constitutes breach of contract. Unfortunately, there is no easy legal framework for a civil penalty for these repeated erroneous denials. An example of a proposal would be if more than two claims in any 12-month period are denied and subsequently paid due to paperwork or administrative errors on the part of the insurer, they must pay a penalty equal to 5% of the claim (or some such amount).

A second denial of coverage problem appears to have come directly from the government. I recently received a letter from my employer indicating the Centers from Medicare and Medicaid Services (CMS) has implemented a new reporting requirement. Their new mandatory law (is this really a law?) requires all insurance companies to provide eligibility data to CMS effective January 1, 2010. Included in that reporting requirement is that all covered members must provide Social Security numbers. Requiring Social Security numbers for insurance coverage is a improper use of the Social Security number and should be discontinued immediately. Furthermore, the letter threatens denial of benefits for failure to comply. This is an illegal third-party encroachment on a private party contract (between my insurance company and me). Please see to it that Congress directs all government agencies to cease requiring such things.

> Which part of health insurance reform is most important to you?
> -Keeping the coverage that I currently have
> -Lowering my family’s health care costs, even if I keep my same insurance
> -Expanding the number of health insurance providers that I can choose from
> -Providing access to health insurance for the 47 million Americans who are
> uninsured -Other

It is important that I keep some level of coverage, and that the costs associated with the expensive regulatory burden placed on the entire medical field be reduced. Providing insurance to the uninsured should be the job of the private sector (via lower costs, lower regulation, and charity), not government.

> Do you believe that a health insurance reform plan should include a “public
> option” that gives people a choice between private insurance plans and a
> public health insurance plan, in order to expand choice and lower costs?
> -Yes, I support a public option
> -No, I do not support the public option
> -Other

No, I do not support a 'public option'.

> *I hope to stay in touch with you and will want to continue to hear your
> ideas and share news that affects New Hampshire. So, by responding to this
> survey, you are agreeing to receive periodic Congressional email updates
> from my office. I hope to continue being in touch with you.

I am happy to receive further updates. I hope that you will carefully consider my responses. If you desire clarification or further input, please don't hesitate to ask.

Varrin Swearingen

The response Varrin received was as follows:

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