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U.S. health care system encourages cheating

Politicians are now fighting about health care reform. Many of them are defending the status quo and propose that there should be no changes, even though a report by the World Health Organization in 2000 ranked the United States in 37th place in health care after countries like Belgium, Chile, and Morocco. Many Americans do not have health insurance because they cannot afford it. Many middle-income families choose to be without health insurance even when coverage is offered by their employers because of the cost. In 2005, approximately 47 million Americans, or 16 percent of the population, did not have health insurance.

The medical establishment and the pharmaceutical industry benefit from the current system and consistently pressure congress to avoid changes. People who work for employers that offer medical Flexible Spending Arrangements (FSA) also benefit by cheating the system.

A medical Flexible Spending Arrangement allows you to set aside part of your yearly salary for health expenses. The limit is usually from two to five thousand dollars. This money is not taxed, but if you don't spend the money within the tax year that you allocated it, you lose it. People who have large medical expenses generally use all that they allocate. People with normal health expenses who use the money for prescriptions, medical deductibles, and over-the-counter drugs may risk to lose a lot of money unless they cheat. But cheating is easy. Toward the end of the year, when people know that they are not going to need the FSA money, they go to one or more drugstores to buy items that can be returned unopened. They buy crutches, blood pressure monitors, glucose meters, and any other items that qualify under the FSA plan. They then send copies of the receipts to the FSA administrator to get a check for their "medical expenses". Once they have the FSA check, the original receipts and the unopened items are brought back to the stores to get complete refunds. In essence, these people receive tax-free income corresponding to the cost of the fake medical expenses.

Medicare Health Insurance is also subject to a lot of fraud. It is not unusual for people with impaired cognitive abilities or a poor knowledge of English to sign multiple blank forms for goods and services which a dishonest provider will use to obtain money from the government. Medicare patients may notice unusual charges made on their behalf, but they usually do not complain because they get what they need from the provider at no cost. Let us say that a patient needs some specialized walker or equipment for mobility, but Medicare will only cover a portion of the cost. The shrewd (and dishonest) provider will tell the Medicare patient to sign two forms to get the item free. One of the forms will be used by the provider to cover part of the cost. The other form will be filled out with some fictitious claim that will cover the rest of the cost, plus a nice bonus for the provider. It is a win-win situation. Right?

Learn about Medicare Health Insurance

Comments »

MaineBob OConnor said,
2009-07-07 @ 23:52:24

Two things... I am a strong proponent of "Single Payer" "Medicare for All" plan. But Single Payer has not been allow at the table because the politicians have been paid off bigtime by drug and ins companies. The second part is to have a government plan that prevents waste as outlined by Dr. Gawande in the New Yorker article: "Cost Conundrum" [http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande ]

"According to Gawande, switching to a single-payer system won't in itself control medical costs. He gives examples of communities where Medicare is the prime payer but where overall health care costs are extremely high. He also gives examples of US communities where health care costs are low. The difference is that in the expensive communities the model of medicine as a for-profit business predominates -- which leads to unnecessary tests, procedures and medication. In the low costs communities (such as where the Mayo Clinic is) physicians have banded together and created organizations in which patient care, not profit, is the primary driving force."

Lots of interesting facts and analysis, like:

"Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later?" [http://www.opednews.com/populum/diarypage.php?did=13502 ]

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