Health insurers have managed to hijack our health care system and are holding the American people hostage. By commercializing health care, the health insurance industry is enjoying excessively high record earnings while millions of Americans get less medical care, if any. United Health Care made $9.3 billion in profits in 2012. They used $3.1 billion of that to repurchase its own stock, which effectively boosted the earnings per share for their stockholders. Even worse, in fiscal year 2013 United Health Care reported $122 billion in revenue, with 99,000 employees, and they are just one of 1300+ health plans.
The health insurance industry is enjoying record earnings while millions of Americans get less medical care. Wall Street investors are delighted with the industry’s profits, and to health insurer executives, that’s all that counts. Health insurer CEOs want investors to buy their stock and keep share prices marching higher, and that’s exactly what has happened. To achieve excessive profits, insurers are happy to gouge consumers, do little to control medical costs, and spend billions of our premium dollars on lobbying, secret political activities, bloated executive pay and stock buybacks.
They continue to make their billions in profits, but don’t ask them to share in the cost of making affordable care available to the uninsured, aging and sick among us. Even though the Affordable Care Act (ObamaCare) requires us to buy coverage from them, thus generating billions of dollars in new revenue for them, they don’t want to part with a penny of that money to help expand coverage to more Americans.
“I believe it’s time to focus on the value—or lack thereof—that private health insurance companies actually add to our health care system. Americans might reach the conclusion that private insurers are no more essential than travel agents (remember them?), and that by dispatching health insurers to the history books, we could reduce spending on health care by billions if not trillions of dollars.” – Wendell Potter
Taking all this into consideration, exactly what value do these health insurers bring to the table. What value do they add to our health care system?
We do know this much:
- They take as much money as possible from people who need health insurance coverage
- They pay out as little money as possible to settle claims from creditors for health services and products that have been delivered (not by them, a third-party)
- They keep as much money as possible for the incomes of their executives and other employees, and to enhance share value for their owners
- They do try to attract enough premium money from customers so that they can spread the risk of a few high-cost customers across the premiums of many low-cost customers
- They try as much as they legally can to cover as many low-cost customers as possible, and to keep as many high-cost customers out of their plans in order to maximize revenues and minimize expense
- They try to minimize their costs by reducing (denying) the use of expensive procedures/services and covering only profitable procedures/services
- In addition to monthly premiums, they also require some form of cost-sharing (also called out-of-pocket costs) when customers receive a health care service covered by their plan (Copays, Deductibles, Coinsurance)
- They have succeeded in growing their companies, making their executives rich, and rewarding their shareholders with obscene profits
I must have my dark sunglasses on because I can’t seem to see any value the health insurers add at all. They are just middlemen, skimming huge profits off the top.
At some point capitalism took over health care and it became a for-profit business, focused on bottom-line profits and shareholder value versus health care outcomes of patients. We now have health care decisions made for us by business people, based on how it affects their bottom-line.
A recent report issued by the Consumer Financial Protection Bureau (CFPB) found that medical debts account for a majority (52%) of debt collections actions that appear on consumer credit reports. An earlier Kaiser Family Foundation report found that 1 in 3 Americans struggle to pay medical bills, and that 70% who do so are insured.
The CFPB report confirms that medical debt frequently occurs among people with no other history of credit problems. When it does, it can have serious and long range financial consequences. Referral of medical debts to collections damages a person’s credit rating significantly and for many years, limiting access to mortgages, car loans, and other consumer credit. Health consequences are also possible; as the Kaiser report observed, once in debt, people may delay or forego other needed care to avoid incurring further unaffordable medical bills.
This is insane. We pay for expensive insurance that won’t cover the cost of our health care, so we go into debt while the health insurers continue to make outrageous profits.
Sounds like a monopoly to me. We are being ripped off. Big time.
So, what do we do about this out-of-control commercialization of health care?
Other countries have figured out this whole health care problem, but America still believes that capitalism and free enterprise is the only solution to any problem. Today’s health care industry is just another application of trickle-down economics; if the health insurers make more money, that money will eventually trickle-down to a more affordable and improved health care system for all. Well, we know all too well how trickle-down economics has succeeded in taking us back to the Gilded Age, by creating an incredibly wealthy and elitist upper class (1%) while everyone else are pushed down to fend for themselves.
I don’t know what the grand solution is, maybe single-payer, universal health care. However, I do know that we can’t continue with this same model of having bottom-line focused, for-profit health insurers making billions in profit by limiting access to health care to those that can’t afford it. Letting these companies get filthy rich off of people’s health is unconscionable.
Do we want to continue with this model that puts profits before the needs of the American people? Health care should not be a for-profit business model, it’s totally unacceptable to put a price on someone’s life and well-being. I believe if we take profit out of health care, we will have a system that works for the people.
America does not have a HEALTH CARE system, we have a WEALTH CARE system.
- Differing Notions of ‘Affordability’ | by Wendell Potter
- Medical Debt Among Insured Consumers: The Role of Cost Sharing, Transparency, and Consumer Assistance | by Karen Pollitz
- Kaiser Family Foundation, KFF.org