Health insurance carriers get demonized a lot, and for good reason: they’re often demonic. But I’m here to tell you, I’m impressed by a change Humana has made in how they decide whether to grant an individual a health insurance policy. First, some background.
We’ve all heard Democrats, Republicans, and just about everyone else complain about the lack of affordable health insurance. Without a doubt, that is indeed an enormous problem. But for years I’ve thought the deeper problem wasn’t so much that health insurance isn’t affordable, but rather that it wasn’t available, at any price.
In 2003, I tried to get health insurance as a self-employed individual. Most insurance carriers wouldn’t even consider covering me. Why? I had asthma, which meant I had to see a doctor once in a while and needed expensive inhalers. I thought this was silly, since my asthma was very well controlled and the costs of treatment really weren’t that high. Moreover, why wouldn’t an insurance company just put an exclusionary rider on my policy so they wouldn’t have to pay for my asthma treatment? Or – even better – why not cover my asthma but jack up my premiums to compensate for the increased costs of my coverage? Nope, those options would make too much sense. Instead, they just wouldn’t cover me. At any price.
Think about that. Is there anything else nobody will insure? If you have the worst driving record in the world, you can get auto coverage. Expensive, yes, but you can get coverage. You can get insurance on experimental aircraft that have a greater than 51% chance of exploding. You can insure a house in Los Angeles built squarely on the San Andreas Fault. I’ll bet someone will even insure a house in New Orleans’ Ninth Ward against flood damage. But insurance to cover a common, easily and effectively treatable medical condition? Nope. Even for $10,000 per month? Nope. $1 million a year? Nope. It seemed like something went terribly wrong with the free market system.
In 2003, the only insurance provider that would cover me was Humana. The coverage they offered me was not particularly expensive (around $135/month) and was quite good. It was a PPO that covered 80% of most in-network expenses, subject to a relatively low annual deductible, and had low co-pays for office visits and prescription drugs. The catch? A full rider for asthma, allergies, and spinal implants (which I had installed a year prior). Of course, asthma and allergies were, by far, the most common thing I ever saw a doctor for, but under Humana’s offer those treatment costs were on me. My spine probably wouldn’t need any more care, but if it did, the costs could be overwhelming. As fate had it, I did end up needing an MRI of my spine, and that set me back $600 out of pocket. I appreciated that Humana covered me at all, but in the year I had that coverage, I never needed it. My only medical expenses were asthma, allergy and spine related, and I paid for those dearly.
Flash forward to 2008. The COBRA coverage I had from my previous employer was soon to expire and, self-employed again, I went back to Humana to see if they’d cover me. I fully expected them to play the rider game once more, but they didn’t. Instead, they surprised me and offered me full coverage with no riders, but with a 42% hike in my premium. Hallelujah! My new premium of $250 per month may sound high, but I consider myself lucky. You do get what you pay for, and to be fair this is excellent coverage, with no exclusions.
Before you conclude that Humana is the bomb, I should point out that Humana has a long list of conditions that will automatically deny you of coverage. If you’ve ever had a condition on that list, regardless of your health status today, you won’t get coverage. Period. No exceptions. In addition to this being inhumane, this is just bad business policy. If there is a price at which it makes sense to cover asthma treatment, there should also be a price — even if astronomical — at which it makes sense to cover cancer, AIDS, or any other condition on their list. If an individual doesn’t want to or can’t pay that, fine, put a rider on their policy for that condition but still offer to cover them for everything else. Why isn’t it that simple?
I’ll write more about my suggested fixes to the healthcare system in future posts. There’s a lot to fix. And we must fix it. But for now, the fact that Humana will insure people like me gives me a glimmer of hope for our healthcare system and some supporting evidence that, in the end, free market principles prevail.