Monday, September 21, 2009

And We Wonder Why Insurance Costs So Much.

For those that don’t know, my sister is permanently disabled. She has Reflex Sympathetic Dystrophy Syndrome, which basically means that untreated, she’d experience pain, 24/7, to the tune of 10% worse than natural childbirth. In fact, RSD patients—who are overwhelmingly female—often report that pregnancy decreases their pain level, so while most pregnant women are complaining that their back hurts, the RSD patients are rejoicing that their arms and legs don’t.

Thankfully, my sister has been blessed with amazing health benefits. Until their retirement, a few months ago, my parents were both middle-school teachers in New Jersey, which basically means that their insurance is phenomenal compared to just about everyone else’s. (Case in point: growing up, my sister and I took prescription chewable vitamins because our $1 copay was cheaper than over-the-counter Flintstones vitamins. True story.) While many insurance companies won’t even admit that RSD exists, let alone cover it, I’m not aware of Jaci ever being stuck with a bill—despite running up hundreds of thousands of dollars worth, every single year. Of course there’s the occasional bout with bureaucratic red tape, but by and large, the status quo keeps her illness within reasonable financial boundaries.

So this brings us to the point of this post: back in 1993, Jaci had her first surgery for what we would eventually discover was (or at least led to) RSD. As the surgery was podiatric, she wound up on crutches and, eventually, in a wheelchair. The insurance company could certainly be forgiven for not wanting to buy the wheelchair outright, since at that time nobody knew that she would be permanently disabled. As such, they dutifully paid the $50 to rent it for a month.

The month passed. Jaci still needed the wheelchair. I’m sure her doctors had to okay it, but the point is that insurance dutifully shelled out another $50 for the rental. Still no big deal; they’ve now paid $100 to rent a $500 wheelchair. The rental company gets their due, the insurance company comes out ahead.

Here’s the problem, though: this went on for years. Even after the government issued Jaci a permanent handicapped placard for her car, the insurance company—despite my father’s suggestion to the contrary—kept right on paying $50/month for the rental. After ten months, the price of the rental had already exceeded the price of the wheelchair; after 100 months, it was tenfold. If I remember correctly, it wasn’t until the state switched providers that somebody finally said, “Hey! Why are we renting this stupid wheelchair instead of just buying it?” and threatened to take it away altogether, unless my parents allowed the purchase (which, of course, was absolutely fine by them).

I was reminded of all this, a little while ago, when I discovered an article about Roger Ebert’s struggle to have his health insurance cover an iPhone or iPod touch. You can read the article, if you like, but the Reader’s Digest version is that Roger Ebert has lost his voice to cancer. According to overwhelming user consensus, the best speech-synthesis software out there is a $150 app installed on an Apple mobile device, such as the $199 iPod touch. Unfortunately, Ebert’s insurance would only cover an $8,000 PC that, according to those that use it, doesn’t work anywhere near as well as the proposed $349 solution (nor helps you at all, unless you’re sitting at it).

This article then cites an earlier New York Times article about an ALS patient on Medicare:

Asked why Medicare refused to cover cheaper, better alternatives for users, Peter Ashkenaz, a spokesman for the federal Centers for Medicare and Medicaid Services told the Times, “We would not cover the iPhones and netbooks with speech-generating software capabilities because they are useful in the absence of an illness or injury.”

Since the $8,000 PC in question is apparently just a $500 PC that has had everything but the included text-synthesis software disabled, it’s not “useful in the absence of an illness or injury.” (Of course, once insurance ponies up the $8,000, the recipient is free to unlock the rest of the computer for a $50 upgrade fee, at which point s/he is free to do anything that doesn’t turn out to be incompatible with the text-synthesis software and crash the computer.)

So here’s the bottom line: both insurance companies and the federal government refuse to pay for a device that does everything you need and fits in your pocket, plus costs roughly 1/23 the price of a device that does virtually nothing and can’t travel with you, because—wait for it—the less expensive device is too useful.

I suppose there’s some doctor out there that would be happy to fit whoever made this decision with a prosthetic clue, but he’s probably not in network.

1 comment:

  1. The sad part is that I'm sure the two stories you've shared about insurance companies' illogical overspending just scratches the surface of similar situations/stories.

    My take on it--if buying the cancer survivor a $199 iPod plus the necessary software is going to result in lower insurance premiums for me and every else in the long run, who cares if he also uses it to listen to some music or surfing the Internet?

    I'm hoping that the healthcare mess can get straightened out, but I am admittedly not very optimistic. We'll see...