Thread: What's so great about private health insurance?

What's so great about private health insurance?

The bloody battle in Congress over a 'public option' ignores the insurers' role in creating the nation's healthcare crisis and their efforts to throttle reform.
Michael Hiltzik
4:31 PM PDT, August 2, 2009

Throughout the heroic struggle in Congress to provide a "public option" in health insurance, one question never seems to get answered: Why are we so intent on protecting the private option?

The "public option," as followers of the debate know, is a government-sponsored health plan that would be available as an alternative to, and in competition with, the for-profit health insurance industry, otherwise known as the private option.

On Friday, the House Committee on Energy and Commerce narrowly passed a reform bill incorporating a public option resembling Medicare. It was a bloody fight among members of Congress, some of whom believe that the public option will give the government unwarranted power over healthcare, and all of whom enjoy government-provided healthcare that's a lot better than what most of us get.

But the battle is just beginning. After the committee vote, House Speaker Nancy Pelosi warned that the health insurance industry will conduct a "shock and awe" campaign to kill the public option when Congress returns from vacation in September and starts debating the measure. We can expect to be overwhelmed with an industry ad campaign worth millions of dollars (remember Harry and Louise?) exhorting us to write our lawmakers to preserve the American way of healthcare.

So it's proper to remind ourselves what that American way entails. For if the insurers have proved anything over the last 15 years as the health crisis has gathered speed like an avalanche roaring downhill, it's that they're part of the problem, not the solution.

The firms take billions of dollars out of the U.S. healthcare wallet as profits, while imposing enormous administrative costs on doctors, hospitals, employers and patients. They've introduced complexity into the system at every level. Your doctor has to fight them to get approval for the treatment he or she thinks is best for you. Your hospital has to fight them for approval for every day you're laid up. Then they have to fight them to get their bills paid, and you do too.

One Wendell Potter reminded a Senate committee in June that health insurance executives had assured Congress in 1993 they would work to secure universal medical coverage and end denials of coverage to people with pre-existing conditions. Then they moved heaven and earth to kill reform.

They've made the same promises now, Potter observed. But they're in an even better position to throttle reform. Mergers and acquisitions have turned the industry into a cartel of huge corporations.

"The industry is bigger, richer and stronger, and it has a much tighter grip on our healthcare system," he said. The last thing they want is a government program set up as their competition.

Potter knows the insurers' ways because he was a top executive in the industry for 20 years. But the hard numbers bear him out. The two largest insurers, WellPoint and UnitedHealth Group, each acquired 11 other insurers between 2000 and 2007. They now control a total of 67 million "covered lives" (that's customers in health insurance-speak).

This consolidation has produced functional monopolies in communities across America. The American Medical Assn. (itself no great fan of reform) found in a 2007 survey that in 76% of the country, defined as its major metropolitan statistical areas, one insurer had a share of 50% or more of the conventional insurance market. This phenomenon gives the companies enormous power to drive up premiums and maximize profits.

Why do we tolerate this? The industry loves to promote surveys indicating that most Americans are "satisfied" with their current health insurance -- 37% are "very satisfied" and 17% "extremely satisfied," according to one such study.

Yet these figures are misleading. Most people are satisfied with their current insurance because most people never have a complex encounter with the health insurance bureaucracy. Medical care generally follows the so-called 80-20 statistical pattern -- 20% of patients consume 80% of care. If your typical encounter is an annual checkup or treatment of the kids' sniffles, or even a serious but routine condition such as a heart attack, your experience is probably satisfactory.

But it's on the margins where the challenges exist. Anyone whose condition is even slightly out of the ordinary knows the sinking feeling of entering health insurance hell -- pre-authorizations, denials, appeals, and days, weeks, even months wasted waiting for resolution.

And that's among people with affordable employer-paid insurance, an ever-shrinking cohort. The percentage of small and medium-sized businesses offering health coverage to employees shriveled to 38% from 67% between 1995 and 2008, according to the National Small Business Assn. Without reform, the number will continue to plummet. Meanwhile, people employed by big companies that offer a health plan are within a layoff notice of losing coverage for themselves or their families, joining America's 46 million uninsured.

Their only alternative right now is the individual market, where insurers scrutinize applicants' medical histories, looking for reasons to turn them down or charge them exorbitant premiums. Have hay fever, asthma, a cholesterol pill prescription? Are you a woman of child-bearing age? You're virtually uninsurable at an affordable cost.

Even if you're accepted, your carrier reserves the right to cancel your policy retroactively if it finds that you left even a tiny condition from years back off your application.

The public option may be your lifeline -- if it's enacted.

Signs of the industry's mobilization against the public option are everywhere. I don't claim clairvoyance for having predicted this development back in March; given the industry's record on reform, a child could have done so.

You've heard of the Blue Dog Democrats, those mostly rural conservatives who blocked a summertime vote on reform legislation on Capitol Hill? According to the Center for Public Integrity, the biggest backer of the Blue Dogs’ political action committee is the healthcare industry, which is on the path to pumping a total of $1.2 million into the PAC's maw in the current 2009-10 election cycle.

Then there's the advocacy group called the Campaign for an American Solution, which describes itself as "a grass-roots effort . . . to build support for workable healthcare reform." The organization owns up to being an "initiative" of America’s Health Insurance Plans, or AHIP, the industry's chief lobbying arm. Unless I've missed a radical change in lawn and garden horticulture, you can't get much further from the grass roots than to be a creation of the industry with the biggest stake in the debate.

Despite all this, America's health insurance plans, which helped create our dysfunctional world, are deferred to as though they're a disinterested party. AHIP subtitled one of its policy papers "A Vision for Reform." But are the insurers now, and have they ever been, anything other than a roadblock?

Michael Hiltzik's column appears Mondays and Thursdays. Reach him at

michael.hiltzik@latimes.com, read previous columns at www.latimes.com/hiltzik, and follow @latimeshiltzik on Twitter.

http://www.latimes.com/business/la-fi-h ... 122.column

If you oppose government health care be sure to NOT sign up for Medicare when you turn 65.
The Medicare that you have been paying for with a deduction from every paycheck.
That way all of the money you paid in can be used to make Medicare better for those of who sign up.

People do not only buy health insurance for catostrophic illnesses or even chronic illness, because they think the chances are small that those things will happen. The main reason people get health insurance is because they or their children might get in an accident and suddenly need hospitalization. Or they might suddely get some awful infection and need hospitalization. They know if they get in a car accident, or get hit in the face with baseball.....or have a heart attack, they wont be able to call on the way to the hospital and get insurance. They will have to pay the bill. This is why people buy health insurance. They dont get it in case they get cancer or diabetes, because they figure that is unlikely to happen.

So because of this, insurance companies can cover pre-existing illness and still make a profit. Of course health care has to be affordable. Guess why it is not? I will tell you why. Insurance companies got greedy over the years and inched those premiums up and up. And when they pushed the envelope too far (because they were blinded by greed) they pushed it past the point that some could afford. But they didnt care. It was only a few customers..."who needs 'em, we can just charge the others more to make up the difference." What a bunch of idiots they were. So then when they increased premiums of their remaining customers to cover the ones they had foolishly lost ....they lost even more customers. And from that point on they were on a downward spiral. Health premiums soared.

Meantime the people who were then out of health insurance started going to emergency rooms because they could not always afford to pay the doctor. MEANTIME wages were being depressed. So add all that into one pot....and you have healthcare crisis. The hospital emergency rooms had to take care of the uninsured because now they had no place to go. The cost went onto the bills of the ones that still had insurance. And it gets worse and worse. And it all started with the insurance companies being so blinded by their own greed that they actually initiated their own demise. Now they are unable to provide the service which is their primary purpose. They cant function as health insurance companies anymore. They have become irrelevant.

We need a government run plan. I am all for single payer.

Dear RedPony and John Doe 2:

You folks say you favor a Government Option insurance program, which will become, ineveitably, a single payer government program. If the ills of Canada and the UK do not convince you that government health care is NOT the answer, then look to the health programs the US government is already running:

1. Medicare: nearly bankrupt and will be withour significant cuts in services and tax increases.
2. Medicaid: Same as Medicare
3. Government health services provided to Native Americans: The horror stories should wake anyone up. These services are required by treaty, but again the constant lack of funds and bureaucratic mismanagement provide a level of service no one would willingly choose.
4. VA services to military veterans: If anyone should be getting top quality care from the government our men and women who have been wounded physically and psychologically should be first in line. What the government has done, and has failed to do, is a national disgrace.
5. US Military Health Care for Active Duty and Retired personnel (including dependents)(TRICARE). Of all of the government controlled health care systems, this one is probably the best managed. But note that it is not managed by Government bureaucrats. Most of the doctors and staff are US Military personnel and they (and their facilities) are directly managed by military personnel. Even so, mistakes are made, and the recourse of patients and their families are limited. For example, I know of a woman whose breast cancer was mis-diagnosed, and she wanted to sue. The miltitary threw numerous roadblocks in her path, including denying her access to her won medical records (by law the medical records of military personnel and their dependents are the property of the government).

So I strongly oppose the establishment of yet another government run health system:

a. It will cost too much money and we do not have the money. Remember, the major reason Medicare, Medicaid, Care for Native Americans, (and even Social security) are short of money is that funds come from the general fund. All those social security and medicare taxes we pay....goes into the general fund for the politicos to play with. Now the Democrats want to add another bundle, but don't expect it to go towards health care.

b. The government can not manage anything. Good God, I just read a post on ALIPAC that the Government is now releasing thousands of suspected illegal aliens who were jailed for various felonies (including violent crimes) because they are out of money. You want these idiots having anything to do with your health care?

c. People should have a choice. It is too late for me. The Democrats under LBJ foisted Medicare off on us, and that was my only real option when I turned 65. But folks under 65 should have a reasonable choice. Unfortunately, the House Bill puts so many shackles on the private insurance plans that you will be hard put to find many differences. It is all set up to funnel everyone into a single payer system within a few years.

d. As to the snide remark that if you don't like government health insurance don't sign up for Medicare, I would gladly give up Medicare. Give me back the thousands of dollars I paid into it (plus interest). I feel the same way about Social Security. I was forced to pay into these monstrosities, so I guarantee you I will get my money back. But if you are not drawing it now, and are planning to get it 15 or 20 years from now, I urge you to develop a backup plan. With the national debt at the level it is at (and will be at if this bill is passed), don't count on getting anything from the US government.

When you turn 65 you have a choose, Medicare or private health care that cost more than $800 a month, and up. If you have that kind of money that's great but most of us will not have that kind of money to spend every month for the rest of our lives. If you've paid into Medicare all of you working life and turn 65 and pay around $100 a month for Medicare and a co-pay, that's about all most of us can afford. And then the cost of part D, etc.

We need Health Care Reform but I am not in favor of a Government run program.

I think Non-Profit State Run Insurance would be a good compromise for all.

I watched Bill Moyers Journal Sunday (yesterday) and a guy who was a Dept. Head for Cigna is blowing the whistle on Insurance Co.'s and testified before Congress recently.

You probably can watch it online and I urge everyone to do so,it is an eye opener.

Originally Posted by redpony353

People do not only buy health insurance for catostrophic illnesses or even chronic illness, because they think the chances are small that those things will happen. The main reason people get health insurance is because they or their children might get in an accident and suddenly need hospitalization. Or they might suddely get some awful infection and need hospitalization. They know if they get in a car accident, or get hit in the face with baseball.....or have a heart attack, they wont be able to call on the way to the hospital and get insurance. They will have to pay the bill. This is why people buy health insurance. They dont get it in case they get cancer or diabetes, because they figure that is unlikely to happen.

So because of this, insurance companies can cover pre-existing illness and still make a profit. Of course health care has to be affordable. Guess why it is not? I will tell you why. Insurance companies got greedy over the years and inched those premiums up and up. And when they pushed the envelope too far (because they were blinded by greed) they pushed it past the point that some could afford. But they didnt care. It was only a few customers..."who needs 'em, we can just charge the others more to make up the difference." What a bunch of idiots they were. So then when they increased premiums of their remaining customers to cover the ones they had foolishly lost ....they lost even more customers. And from that point on they were on a downward spiral. Health premiums soared.

Meantime the people who were then out of health insurance started going to emergency rooms because they could not always afford to pay the doctor. MEANTIME wages were being depressed. So add all that into one pot....and you have healthcare crisis. The hospital emergency rooms had to take care of the uninsured because now they had no place to go. The cost went onto the bills of the ones that still had insurance. And it gets worse and worse. And it all started with the insurance companies being so blinded by their own greed that they actually initiated their own demise. Now they are unable to provide the service which is their primary purpose. They cant function as health insurance companies anymore. They have become irrelevant.

We need a government run plan. I am all for single payer.

Well said Redpony! Insurance companies have been screwing us for YEARS. It's time to change the system.

4thHorseman, I talk to many people in Canada. Things have been twisted here in the media (paid for by republicans) to look like things are worse than they really are. There are MANY more horror stories here in America as a result of our current system. The companies decide whether you live or die.