Each year, I watch the classic 1946 Christmas movie It's a Wonderful Life on TV. The battle between good and evil pits the righteous George Bailey, who runs the credit union owned by the townspeople of Bedford Falls, against the sinister Henry Potter, the bank mogul who keeps them downtrodden and in poverty.
This movie resonates today because so many of us have been ripped off, not only by the big banks that thrust us into this recession, but also by the big health insurance companies who raise our rates, co-pays and deductibles beyond reason.
I recently glanced at Aetna's 2013 New Jersey small business health insurance plans and was amazed that its most comprehensive plan had gone up 407 percent! Unfortunately we have little or no defense against these Henry Potters of the health insurance industry except to try and find another health insurer that won't gouge us quite as much.
Revolution No. 2014
But don't despair. In 2014 help is on the way. Section 1322 of the Affordable Care Act, aka Obamacare, is every big health insurer's worst nightmare: government-sponsored consumer-run health insurance cooperatives. Following in the footsteps of George Bailey and the folks of Bedford Falls, you could be in charge of your own health care and have a voice in what happens.
"For once it won't be 'a suit' [insurance executive] making all the decisions," says Ellen Zane, who chairs the non-profit Minuteman Health Initiative in Massachusetts, where the Minutemen started the American Revolution. Through this health insurance cooperative, Zane wants to reform health insurance with the support of hospital chains, financial advisers and even former health insurance executives.
In 2014, health care cooperatives nationwide will be up and running with $1 billion in federal loans and temporary boards to run them, until their membership can take control. Their goal is to attract individuals, families and small businesses -- those hardest hit by the big insurers -- and offer them affordable health insurance.
Bigger isn't better
But will these co-ops serve our health care needs better than the big insurers? The big health insurers are full of "bloat," says Zane. They have a perverse incentive not to become efficient "because they get more administrative money as premiums grow."
Zane believes that Minuteman Health will streamline billing with simpler systems and processes, and treat providers like doctors and hospitals fairly. In other words: none of the special deals that insurers offer to -- or demand from -- providers, such as Blue Cross Blue Shield of Michigan, which required hospitals to charge other insurers more if they wanted to do business with Blue Cross, according to a federal lawsuit.
"We won't ask for specific discounts from the provider, but we will expect all providers to have rates in and around the average" says Zane. "All will be welcome if they can provide services at reasonable, average rates." And without violating patient confidentiality, Minuteman Health will share information with employers that will enable them to tailor their employee wellness programs to their staff, helping them deal with problems like smoking, diabetes and obesity, thus lowering the employer's cost for health insurance.
Zane says that we will want to work together because the additional savings go back to us, rather than making the owners of the for-profit health insurer rich. The savings will lower our cost either in the form of reduced premiums or provide us with additional benefits. "We will save a significant amount," Zane predicts.
By the people, for the people
Do health insurance cooperatives sound too good to be true? Perhaps. But I've found true believers even in the business world. Minuteman" is health insurance by the people, for the people," says Forbes magazine writer Rick Ungar, in reference to Lincoln's Gettysburg Address. The current health care system is overpriced and broken, he argues and "if you don't try something, you will never find better solutions."