Hostage Capitalism, the ACA and RIP Medical Debt

(a CBS promo for a story about RIP Medical Debt)

I don’t wish to join the conventional chorus of nay-sayers about ‘Obamacare’ (formally the ACA), but results are in after the Supreme Court upheld the law a few weeks ago, and it ain’t pretty. It appears that the insurance companies are jacking up insurance rates some 20-40%, with Blue Cross of New Mexico threatening to raise rates 50% for 2016. Moreover, there’s an amazing wave of consolidation going on in the industry, with both insurance companies and provider networks merging in the kind of unbridled glee that informed the likes of Ivan Boesky and Michael Milken. Wall Street is voting on ‘reform’ and the numbers are up sharply for both insurers and ‘care networks’. Interestingly, the Feds consider medicine and its financial permutations to be beyond the reach of trust laws, leaving the states in charge of trying to regulate these giants. Robert Reich does an excellent job of explaining the problems here. Yes, we’ve dropped the number of uninsured. But we could have done the same under single-payer, and that wouldn’t have given healthcare CEO’s multi-million dollar paydays. All of this goes on in a field which exemplifies what I call Hostage Capitalism–if you are struck by a car or by appendicitis, you are hardly in any position to negotiate with a system that is notoriously opaque about the way it charges for service.

Now (in the interests of honesty), I have friends who have embraced the ACA–friends who had not been able to get insurance before (too poor or big pre-existing conditions), who would have been rendered destitute by a sudden illness (one bud had signed up for a plan literally hours before an intestinal tract infection put him in a hospital).  No, they won’t give up the ACA. But they would’ve gotten the same healthcare through a Medicare For All program, and their dollars wouldn’t be enriching the insurance industry.

Meanwhile, the chicanery that the insurers (who never should’ve had a place at the ACA negotiation table) have engaged in is becoming clear. One of the ‘reforms’ in the insurance I was promised by the POTUS that I could keep my present insurance (through my DW). But the insurance I could keep now comes with huge deductibles. The employer will reimburse some of those through a payroll deal, but it was cheaper for them to patch together this Rube Goldberg system than pay the standard rate for insurance. And this had begun before the SCOTUS decision.  A friend under a similar deal found the following–the insurance company was ‘negotiating’ a deal with the provider–a visit to a specialist used to be billed as $175, of which she was responsible for the co-pay of $20. But now she knows that this $175 visit was only reimbursed $65. So why does an insurance company get away with paying only half of what an uninsured individual is paying? And my understanding is GP’s get an even worse cut of the ‘official’ cost, with the end result being that GP’s are in business only to recommend treatment from specialists. My former GP fully accepted his role as ‘gate-keeper’, to the point where he wouldn’t treat anything in-office. If I’d walked into his office and said ‘I have a horrible hangnail’ and my primary care guy had been standing with a nail clipper, he would’ve put it down and written out a scrip for me to arrange an office visit with his pal the hangnail specialist. (I’m embellishing these stories only slightly to protect employers and the identities of those who’ve confided with me)

And the insurers are not the only pigs at the trough–the ‘provider networks’ are also in on the monopolies. When you’re being treated for certain medical care issues and you need a specialist not in-network, you’ll pay out of pocket or eat huge costs. Provider networks are hitting the insurers with huge rate increases, and (because medical care is exempt from anti-trust), the insurers have few options. The NPR program This American Life did a long piece on such monetary Darwinism, and there’s a transcript here.

And now we’ve seen the beginnings of a death spiral–people pay more for insurance that covers less, so they’re still vulnerable to medical bankruptcies owing to growing deductibles (while the ACA mandates insurance coverage from employers, it doesn’t mean worthwhile insurance coverage). People who (between lackluster salary growth and bigger salary withholdings to pay for shittier insurance coverage) are taking a bigger economic hit are thus nearly as likely to be bankrupted by medical bills as they were before the ACA passed. 

Which brings me to the work of economic writer Jerry Ashton. My friends Jerry Ashton & Craig Antico have begun a new non-profit, RIP MEDICAL DEBT, that is beginning a year-long campaign to raise 177.6 thousand dollars and abolish $17.76 million of this debt. From their press release: “RIP Medical Debt is the only organization in existence with the mission to abolish medical debt for needy Americans, by purchasing millions of dollars of medical debt for pennies on the dollar”.

(warning–wording taken from their website, highlighted by dark blue type)

RIP’s goals are ambitious but not unrealistic. As former executives in the debt collection industry, Jerry and Craig, are using their decades of industry experience to compete with collection agencies in buying distressed medical debt. The two helped abolish $20 million of debt in 2013 with Occupy’s Strike Debt to show the predatory practices of the debt collection agencies. Did you know these collection services purchase debt for pennies, then charge the full debt to the patient, with penalties and interest. To me, that is unconscionable and Jerry & Craig are here to expose this, so watch tonight — such knowledge could help with your own financial situation!

Essentially, RIP Medical is taking on the model originated by the Occupy Wall Street offshoot Strike Debt. Delinquent debt (regardless of source) is sold for as little as .5 on the dollar. Bill collectors buy up the debt and can charge the full balance, taking the chance that the bill can’t be collected against the potential for big profits. What Strike Debt (and RIP Medical Debt) do is compete with bill collectors in buying up debt. The difference is that RIP Medical Debt then releases the debt, dissolving it. 

RIP Medical Debt is not a panacea–but it provides the only respite for millions of desperate people who have no other recourse from a healthcare system built on Hostage Capitalism. Supporting them would be a good idea. 

 

 

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