“The economic recession and rising unemployment—plus changing demographics and baby boomers aging into Medicare—are among the factors expected to influence health spending during 2009-2019. In 2009 the health share of outrageous domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent—the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.” - Health Affairs, 2/4/2010
For all the clamoring that is being expressed across the nation by some about how the government’s efforts to reform health care will increase costs, the actions of the PRIVATE health insurance industry lately are making it positive that this just doesn’t wash anymore. Without the government being involved at all, costs are projected to increase this year from anywhere to 10 and 25% by the PRIVATE sector. These increases come on the heels of record profits already raked in by the PRIVATE health insurance industry. Last year in 2009 “the five largest health insurance companies—WellPoint, UnitedHealth Group, Cigna, Aetna, and Humana—took in combined profits of $12.2 billion, up 56 percent over 2008.” SOURCE
It needs to be noted too that these increases reflect only half of what PRIVATE health care insurers wanted to charge had they had their way. But then whose to say that what they wound up with wasn’t really what they wanted anyway? Would it be out of the bounds of reasoning to believe that by scaring the beegeebers out of us with increase demands of 30, 40 and 50 percent that somehow these higher rate scares were intended to be “negotiated” for the lower ones they are actually going to get, … and wanted in the first place?
If you are one of the many “lucky” ones who has a job AND employer-provided health care coverage, you may be starting to think that R-E-F-O-R-M is not such a bad word after all. By now you have seen your paycheck deductions and are surprised to find that the decrease had nothing to do with T-AX-E-S (Actually, if you made less than $250,000 you probably received a tax increase). It’s in that column that deducts your share of the health care coverage which your employer provides as part of your befriend package. If you haven’t seen it yet, thank your employer and be ready for an up-tick in health care costs to you.
Thank your employer because they haven’t passed on to you the cost of health care coverage they are being asked to pay by the PRIVATE health insurance company they purchase it from YET. But eventually they will because such increases affect their bottom line and a business can not prosper if profits decrease. Large companies, especially those who have share holders, will be expected to pass on costs to their employees to keep dividends high for stock holders. This may seem like a critical course of action in these hard times. Surely even the health care industry has to do what it needs to do to survive, right? No, that’s not entirely proper.
You’re PRIVATE health care costs are going up in order for the PRIVATE health care insurance industry to contain their unusual historical high profits. Over the last half century your insurance premium dollar has gone from spending 95 cents on health care costs you incur to roughly 80 cents, and in some cases 75 and 70 cents, depending on who insures you. Compare this to the 5% administrative costs of the government-run Medicare program today. What has gone up are the “administrative costs” PRIVATE insurance companies are charging to cover the expense of doing business. Choices that doctors and patients make when selecting higher cost technologies to assess “more accurately” health care needs is part of this but without such choices a closer look reveals that big chunks are generated within the PRIVATE insurance industry to serve their bottom line – profits.
To maintain these high profit margins there are several practices that PRIVATE insurance companies are enchanting in that unfortunately hurt the consumer.
- Policy holders who bought their insurance in good faith from PRIVATE insurance companies are being refused treatment and procedures prescribed by their personally chosen physician because the bureaucrats at the PRIVATE insurance company have deemed them “unnecessary” (meaning: “too costly”). Though these high cost procedures are deemed essential and even life-saving for patients, decisions are made by non-medical professionals at insurance companies to deny these requests often because these costs will cut too deep into company profits, especially if this procedure is allowed with everyone who requires them. This practice is similar to the actions of “death panels” that Sarah Palin claimed would be formed if “socialized medicine” became a part of health care reform in this country.
- Denying coverage of patients that may have had some pre-existing condition that PRIVATE insurance bureaucrats feel MAY re-occur sometime in the future. These are deemed “high risk” people who, by virtue of past health problems may have future ones along the same lines. Dispassionately presented, the business of PRIVATE health care insurance is to hope that they collect premiums from individuals who never have to utilize their health care insurance before they die or that what they employ will not exceed what they cough up in premiums. Even if you can afford high premiums, they don’t want to cover you for fear they may have to pay for coverage they insured you for.
- Bonuses are paid to health industry employees who can dissect customer policies and find any error in their applications so they can reject their claims on an as-needed basis. This doesn’t become a legitimate concern until you need it most, when you incur a long-term, debilitating illness that will cost tens of thousands over a long period. Most insurance companies advertise their product in a warm fuzzy mode that associates them with the welfare of you and your family. You’ve seen them, like this one here. Some are cute. Some are even meant to be funny. But they all fail to convey this practice that your coverage is only apt until it’s not anymore, as THEY deem necessary.
- The health insurance industry needs more money to fight health care reform. “Medical providers, businesses and other groups battling over a health care overhaul have spent more than $100 million this year on television advertising – an enormous sum that highlights the stakes alive to,” – Campaign Media Analysis Group, 10/1/09 This “enormous sum” comes out of the premium dollar you pay for health coverage. This of course does not include thecost of advertising they buy to sell you on their products, many of which are deceptive.
Without getting off topic here too mighty I should state that there are other concerns also being raised by a vocal minority that don’t hold up to closer scrutiny either should a GOVERNMENT option be included in health care reform. Many of those fears have been debunked here. Other prominent fears raised by nay-sayers about a government option resulting in socialized medicine and raising already high deficits have been debunked too, here and here. This unfounded angst is bemoaned by what appear to be industry insiders posing as independent advocates to stoke the fears of uninformed consumers and voters.
In the unique climate of economic uncertainty it is easy to descend prey to fears of manufactured views regarding health care costs by those who realistically stand to lose from health care reform – Big Health Care Insurance. It’s not a loss they cannot absorb but it will be a change from the high profits they now command from unethical practices to a time when we got more bang for the buck in health care coverage.
An argument could be easily made that PRIVATE, for-profit health care coverage threatens human life by its current standards to forsake the patient for the sake of higher stock holder dividend yields. This is NOT an argument against the profit motive contained within the capitalistic free-enterprise concept. Profits are a good thing and anyone within business that doesn’t strive for high profits within reasonable limits is perhaps better suited for other work in the not-for-profit enterprises that serve the public in many ways. But life-dependent areas should fall outside this principle for the simple fact that human greed will ultimately turn a blind view to human need, as has happened on more than one occasion.
Outside the self-interest of the health insurance industry there are those purists within capitalism that feel threatened by ANY government intervention into what they feel can and should be handled by the PRIVATE sector. Like fundamentalist Christians who often cherry-pick the Bible to justify their orthodox views, these purists quote chapter and verse of Adam Smith’s “Wealth of Nations” to defend there position on this while ignoring those parts that warn against the inequality of wealth. Smith worried too about the undue influence of wealth on government where legislation would be “instituted for the defence of the rich against the poor.”(Book V, Chapter I, Portion II, 775). A little over a century later one of the greatest capitalist this nation has produced would concur. Andrew Carnegie stated in the opening line of his essay “On Wealth” that the proper administration of wealth should be “that the ties of brotherhood may still bind together the rich and poor in harmonious relationship”, NOT, as some see it within capitalism and the health insurance industry specifically, for the sole benefit of the wealthy
The reality is that aspects of both systems can work hand and hand to improve the well-being of all it’s citizens. Though “you will always have the poor” there is no reason to fill that market mechanisms are sacrosanct and will always prevent abuses and excesses of a wealthy oligarchy, or likewise to believe that socialistic interventions will insure equitable resources to be distributed for all to enjoy a life of relative prosperity. But if we are to rein in these anticipated high health care costs and prevent further damage to our struggling economy we must be able to get past the rhetoric that supports the status quo.
Providing economical health care for every person shouldn’t be based on an economic notion that supports the more fortunate amongst us. If we truly value life as most within our culture claim, then a system that achieves this should be created rather than sustaining one that doesn’t while it also takes more of our earned income to do so.
For further reading on the issue of increased PRIVATE health care cost, check out these sites:
WellPoint Price Hike Defense Fails To Satisfy Feds
California Death Spiral
Physicians for a National Health Care Program
Spreading the Wealth Around to the Insurance Industry and Friends
