I’ve been researching the state health insurance exchanges that are part of the health “reform” law, and am struck by how little they may end up doing, and how much furor they are causing. Republican state lawmakers in more than half the states are scaring their governors away from participating in setting up exchanges, on the theory that insurance exchanges are part of an unconstitutional health reform law.

But let’s look at this from the typical consumer’s point of view. A majority of Americans get their health coverage from an employer or from Medicare or Medicaid. A large fraction buy health plans on their own from insurance companies and another big chunk go without.

So the exchanges, in an ideal world, would make it easier for the people buying on their own or remaining uninsured to buy insurance from private insurance companies, and some with lower incomes would qualify for financial help to pay for the premiums.

So what is so threatening about an expansion of the private marketplace? The problem, of course, is that the marketplace might actually come with some consumer-friendly rules that make insurers (and their friends in state legislatures) uncomfortable. So we have the typical dynamic of insurers resisting rules that might make it easier for consumers to have health coverage that actually pays their bills and is reliable. Same old, same old.

Call me cynical, but I’ve been struck from the beginning of the health “reform” debate by the unwarranted optimism of those who think that dynamic will somehow be overwhelmed by Congress’ desire to reduce the number of uninsured. We can see already how the Affordable Care Act’s provisions are being eroded by legal challenges, failure to appropriate money to carry them out, and out-and-out refusal to play along in the states.

It would be great if we got some real consumer-friendly insurance rules, and the law has actually put a few of those in place. But by setting up the exchanges on a state-by-state basis, Congress has simply allowed the debate to continue in every state capitol rather than resolving it once and for all at a national level. Oh well.

My most recent article is about a fleeting tax deduction for health insurance premiums of the self-employed. It’s good only for the 2010 tax year, so act fast.

Check out the website for lots of other good basic information about health insurance.

So what does all this mean for health plan consumers? Not much. Even if Congress manages to approve some consumer-friendly insurance regulations and maybe even a new, improved marketplace for buying insurance (an exchange), Americans will still be dealing with the same old health plans, haggling over bills and struggling to keep control of it all.

So I’m convinced this blog is still worthwhile, as is my original intent of helping consumers keep up with all the new ways insurers will try to confuse them. So I’m back.

OK, I need to comment on what we’re starting to hear about the cost to our healthcare system of lifestyle choices — fast food, lack of exercise, etc. I’m seeing more commentaries alleging that Americans are just too lazy about their own health and need to “take responsibility for their own healthcare,” a phrase that really sets my teeth on edge.

Here’s the part that’s usually missing from this analysis, whether it’s coming from the right or left: Maintaining a healthy lifestyle is an issue of economic class. Sure, more middle- and upper-class Americans are heading into their later years and developing chronic ailments such as hypertension and diabetes and many of those cases are likely preventable with some effort. But you know who most of these chronically ill people are? They’re the low-wage workers of America, the single moms who are eking out a living, working a tiring shift at a job not many people want to do, coming home to feed the kids whatever she has time to slap together, and spending what energy she has on the basics of getting through life. She doesn’t have the time, energy or money to pay Oprah’s life coach to tune up her lifestyle. She has time to drive through KFC for the bargain bucket and make sure her kids are getting their homework done. She can’t go to the gym for a spinning class and leave her school-age kids alone at home. Her health is the last thing she has time for, and her stressful lifestyle is nearly guaranteed to result in extra weight and a chronic illness or two.

So lay off all the talk about Americans taking responsibility for themselves. As soon as we give this person some support — like a sick day off, some decent day care, some economic opportunity and equal pay — she’s going to continue to be a “drag on the system.” And an average American.

But they are talking a lot about how healthcare bills are knocking the stuffing out of average people out there. I think that’s why healthcare reform is finally gaining momentum. Even businesspeople are recognizing how the offerings of the insurance industry are not really helping them and their employees pay for medical care in a realistic way.

For instance, I just talked this week with a small business owner in Tennessee who takes pride in providing health insurance to his employees even when others in his industry do not. But keeping up with the double-digit premium increases has been a challenge. So a couple of years ago he switched to a high-deductible plan. Pretty soon he and his employees were finding themselves at the pharmacy and instead of paying a $30 copay, they had to pay the whole $150 price tag of a medication. They were blowing through their $2000 deductible quickly. More importantly, the design of these plans forces an individual to pay full retail or try to figure out how to negotiate the price down in a market that’s not designed for haggling. The pharmacy tech isn’t interested in bargaining over a price, she just charges you the list price.

This business owner had enough of this craziness after a year and switched back to a plan that gives his people some actual coverage and help dealing with a system that was never meant for civilians to interact with on their own.

Beyond the expense, I think these folks paid an emotional cost in the stress of yet another area of their lives where they’re left on their own in an unacceptably complex marketplace. It’s fine to give people some responsibility for their health when they have a fighting chance to succeed — walk around the block, turn down that donut at the staff meeting. But throwing them to the wolves of our insane medical billing system, which is barely understood by the experts, is just unfair.

Hospitals are like the fanciest, most exclusive restaurants — the ones where the menus carry no prices. If you have to ask what it costs, the punchline goes, you can’t afford it.

The same goes for health care in America these days, sadly enough. If you’re on the hook to pay a big chunk of that MRI or knee surgery that’s not fully covered by your insurance, you’ll be looking for a price tag ahead of time to know whether you can afford it. In too many cases, the hospital or imaging center or surgical facility can’t tell you how much it costs.

In an interview on a blog called WorldFocus, Princeton economist Uwe Reinhardt explains in his usual clear and direct style how this came to pass. Read the entire interview to find out more about how the U.S. and Canadian health care systems compare.

Uwe Reinhardt: Well, I once did a dumb thing: I asked an insurance executive “What do you pay in New Jersey for a colonoscopy?”

And he just laughed at me and said, “What a silly question. There is no price for a colonoscopy. We have a different price for every hospital. And for the same hospital, we might have six prices depending on the insurance product, is it an HMO, etc.”

So I said, “This is mad. How many could there be?”

He says, “There could be 30, 40 for us, but then with Aetna, they could have another 30, and everyone has a different contract, so a hospital might receive 60, 80,100 different prices for a colonoscopy, depending on which insurance company and what contract it is. So when you say ‘What are the private market prices?’ there is no price.”

And I said, “Well how, when you have consumer-directed health care, where people are supposed to shop around, what are you going to tell them?”

And he said, “We can’t, really. What would you tell them?”

There is no real price, and every price has been negotiated and haggled over. So imagine what it costs compared to a system where a government negotiates with a physician association. Here’s the fee schedule, and that’s it, and everyone uses the same fee schedule. You can put that into a computer. You have a little card like an American Express card. The price list is already there. You swipe it through, the doctor keys what he or she did and here’s your bill. Well here you have to look at what contract was it and the coding turns out to be wrong, and the bill isn’t clean.

Gee, I love having individual insurance. Just got a 17 percent rate increase in the mail for my high-deductible policy. Which means I’m likely paying $8500 this year to insure my young daughter and I, given that it’s likely I’ll end up spending the $2500 deductible, as I have the past two years. Each time it was the cost of one expensive medical test, a a fairly common biopsy in 2007 and a nuclear scan of my back in 2008.

I’m not unhealthy, and neither is my kid. But our medical costs keep going up. Why isn’t the individual insurance market handled like one big group insurance plan that evens out the risk among millions of people? I imagine the companies would say that people in the individual market tend to be older and sicker than the average group insurance member. But I wonder about that because they deny insurance to anybody with even a moderate risk of anything chronic.

It’s not news to say that our system is a mess. I feel sorry for all the people being laid off who get to join the individual market and its frustrations and uncertainties. Good luck to you and welcome to the madhouse.

Just came out of a session at Health 2.0 about websites that help consumers with their medical bills and health insurance. Here are the highlights:

Change:healthcare is my current favorite among these types of sites. It addresses the same issue as this blog talks about: The yawning gap between what consumers are now expected to know about managing their healthcare dollars and their practical ability to do so. It has detailed information about medical bills and is regularly adding tips on how to handle specific difficult situations, such as negotiating with a provider before you get a medical service.

Another one, bwell-informed, is useful for choosing the right health insurance plan for you. There are a number of websites that allow you to buy health insurance online, but this one has a nifty tool that will let you compare plans and predict your out-of-pocket costs given your typical use of healthcare services.

Getinsured.com is another website that helps people buy health insurance. The interesting thing about this was the company CEO’s comments about the difficulty of many of his customers to afford health insurance. He thinks the marketplace will in the next year or two offer many more low-cost catastrophic insurance plans for people who can’t afford $200 or more to insure themselves and their families. He also noted that some of these kinds of products, such as discount cards, being marketed today aren’t worth the money. This is a problem we’ll address here soon.

Medicaresaver is a handy site for people looking for Medicare Part D insurance, which can be a bewildering search because of the complexity of prescription drug plan choices for the elderly and others who use Medicare.

More later!

I'm blogging live, because that's what bloggers do. Exciting, isn't it?
I'm sitting in a roomful of 1,000 people who are hearing about how innovations on the web are going to help people better understand their health, find providers, stay healthy and figure out their medical bills. This is a daunting task but it's nice that so many people are working on it. This conference had half as many people show up last year, and most of the folks here are entrepreneurs coming up with new ways to serve you, the consumer.

They're spending a lot of time trying to figure out what you want and whether web-based services can help. One of the big questions is how to find a doctor or hospital or other healthcare provider that you would like and trust. There are some services doing this (ratemds.com, Zagat, HealthGrades, etc.) but not many have had enough people comment to produce a reliable sense of what a given provider is like. It's also a little worrisome how these sites could potentially be manipulated either by someone with an ax to grind about a given provider or even by the provider him or herself.

Still, the web has amazing potential to give individuals a quick way to wade through the fog of marketing to get the quality and humane care that they seek. I'll report back if I find it here.

This may be a foolish thing to do, but I'm going to publicly discuss my lower back problems. This is dangerous because I buy my health insurance on the individual market, which means that anything that places me in a category of undesirable risk could make me uninsurable in the future. But what's happening to me is not uncommon and raises interesting questions for consumers.

I've been buying my own health insurance for the past five years or so. My premiums have doubled in that time; to some extent it's because of my age — I'm 47, a time of life when medical expenses tend to creep up. But premiums for everyone have also been rising at the same time.

Like an increasing number of Americans, I have a high-deductible health insurance plan. I pay $2,500 before the 70 percent coverage for most things kicks in. There are exceptions for many prescription drugs and a certain number of doctor appointments. But for both of the past two years I've spent that deductible and more because of what seemed like relatively routine medical tests that turned out to be really expensive even after the insurance paid its part.

So I sought out help from an insurance broker to see if I could get a better deal. I'm healthy, except for some chronic low-back pain that I deal with on my own with exercise and stretching. The broker, though, said I could not qualify for a lower deductible/higher premium plan because I've had a diagnosis of degenerative disk disease. This sounds rather dire until you realize that the medical world views this dwindling of the pads between the vertebrae as "a natural process of aging" that affects the majority of people over age 50.

But to insurance companies, the chance that a person with low back pain will seek out expensive surgery or long-term physical therapy appears to be such a terrible risk that they don't want to give insurance to people with that diagnosis, or at least not without a big spike in premiums. A friend of mine went through a similar process, seeking to buy better coverage from her existing insurer, and was turned down because she once sought very short-term treatment for insomnia.

So the message seems to be that if you want to stay insured you should never use your insurance. I've certainly avoided asking my insurer to help me pay for physical therapy appointments for my back, which I use every so often, or consultations with mental health professionals when my emotions need a tweak, such as after my mom died a couple of years ago. Why put red flags on my record for a measly $30 payment, which covers barely a third of the cost of the appointment?

Theoretically, though, even if I pay for those kinds of things myself, my insurer expects to know about it and take it into account if I ever apply for a better plan or ask a different company to insure me. It would be nice if they could take into account the fact that I'm only going to make claims for the bigger things I can't afford and that they can negotiate good rates for, given their clout in the marketplace. But these are large corporate entities that don't flex well to account for individuals and their problems.

I'm interested in hearing from other people about whether you carry out stealth healthcare, paying out of pocket even though you're insured, so you don't make waves with the insurer. In California this has become a big issue because several of the big insurers have been accused by state officials of finding flimsy excuses to cancel the coverage of people who make substantial claims (because they're particularly sick). It's scary out here, and getting more so. As a journalist I don't like to advocate one way or another, but I do get chills when I hear free-market supporters talk about how the marketplace is the best way to provide health security. I have my doubts.