If the Insurance Companies Win, We Lose

As the health care debate rages, one thing has become increasingly clear. This battle is not mainly some academic argument about the best approaches to health care policy -- or even a clash of ideological world views. It is a fight over who gets what. It is a battle between the health insurance industry and the rest of us -- as consumers, as patients, as taxpayers.

And one thing about this conflict is certain: if the insurance companies win, we lose.

Fundamentally, the big insurance companies are fighting tooth and nail to make sure they can continue to skim billions off the top of the dollars we spend on health care.

This does not mean that if we win, the insurance companies will lose in some existential sense. If real health insurance reform -- with a strong public option -- is signed into law this fall, we won't have to have a tag day or bake sale for the big health insurers. They are very good at figuring out how to make lots of money.

What is at stake is whether we continue to be the world's greatest health care chumps -- paying 50% more per person for health care and still being 37th in the world in health care outcomes. More importantly, what is at stake is whether the rapacious drive of big health insurance companies to skim off money for Wall Street investors and their corporate CEO's will continue to create health care victims.

Take Stacie Ritter. She's a mother of twins who lives in Pennsylvania.

Both of her daughters, now 11, were diagnosed with leukemia when they were four. They both needed stem cell transplants and other cancer treatments. They did survive, but the treatments damaged the glands that control their growth beyond repair. Their doctors indicated that in order for them to continue to grow normally, they needed regular growth-hormone injections.

But there was a problem. Each time Stacie took her daughter to the doctor for shots, it cost her $440. CIGNA refused to pay.

Stacie and her husband were not about to deny their daughters the right to grow up, so they spent every spare dollar on the injections. In the end, those expenses -- coupled with other costs they had to pay for the twins' cancer treatment -- forced them to declare bankruptcy.

Their story is not unusual. Sixty-two percent of all bankruptcies are caused by medical bills -- and often when an insurance company denies care. People think they are doing the responsible thing for their families. They have health insurance, but then a tragic illness hits and they lose everything anyway.

CIGNA didn't refuse to pay for the kids' hormone injections because it hates kids, or wanted the twins to stop growing. It denied the shots because its principal mission has nothing to do with those kids' health -- it is making money.

Ed Hanway, CIGNA's CEO, can tell you about that. In 2008, Ed made $12.2 million. That's $5,883 an hour. Ed makes more in one day than the average worker makes all year long. He makes 30 times more than the President of the United States.

Ed makes enough each day to cover 106 of those shots.

And for CIGNA, the case of Stacie's twins was not unusual.

Doctors said a liver transplant could save Nataline Sarkisyan's life. But CIGNA wouldn't pay for that either. Nataline died in 2007, just before Christmas. She was 17.

That same year, CIGNA CEO Ed Hanway locked in a $73 million golden parachute for his retirement.

The average transplant operation costs about $250,000. Hanway's golden parachute would pay for 292 liver transplants. Nataline needed only one.

Hanway has a number of homes, including a beach house in New Jersey worth $13 million. Many ordinary Americans are losing their only homes each year because of medical bankruptcy.

Of course Hanway is not the exception, he's the rule. Stephen Hemsley is the CEO of UnitedHealth. In 2009 Hemsley made an astonishing amount of money selling stock in UnitedHealth -- $128,000,000. As you might imagine, he has a very nice house too.

People like Hanway and Hemsley don't provide one iota of health care to anyone. They have simply figured out a way to route billions of our health care dollars through the companies that they control so they can skim some off the top before it is used to pay for doctors and hospitals.

The incentives created by this system also produced Staci's bankruptcy and Nataline's death. These companies hire armies of bureaucrats whose only mission is to deny claims in order to fatten corporate bottom lines. The only relationship those armies of bureaucrats have with health care is that what they are employed to do is, itself, sick.

We're approaching key decision moments in the health care war. Don't sit on the side lines. This battle is about each of us. Any one of us could be Stacie or Nataline. Ask your Member of Congress if he or she lines up with us, or the insurance companies. Demand to know which side he's on. This time they can't have it both ways, because if the insurance companies win, we lose.

Robert Creamer is a long time political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

 

 

Comments

[prepgroove]

You said that 62% of bankruptcies are caused by medical bills. Where did you get that figure?

http://www.ncpa.org/sub/dpd/index.php?Article_ID=18175
17% is the number

[exmate]

Why do we continue trying to re-invent the wheel? The French health care model is recognised by several studies including ONE by the World Health Organization. It is liked by Private Insurance companies, doctors, the French people. It leads other nations in : life expectancy, infant survival, preventing unnecessary deaths, preventing uneccessary hospitalizations for : asthma, bacterial pneumonia, diabetes and congestive heart failure. ALL THAT AT HALF THE PER CAPITA COST IN THE USA.

[exmate]

There is now a window of opportunity. The Democrats have majorities in both houses and a Democrat as sitting President. The window of opportunity may well close a year from now. (The GOP used a similar situation to get us into the Iraq situation.) If the American people could be convinced that the government needs to take control of the private health care insurance providers. Obama would have to display extraordinary courage, risking not being re-elected in 2012, in using the bully pulpit, although he could still recover in the event of a setback in the next year. There is much that we can learn from the French model which actually call out first in the same study by WHO that ranked the USA 37th.

Those members of Congress who vote against the bill would be choosing between the fat cats in top management of health care insurance providers and those who sincerely want health care reform. If they choose the former, they will do so at their own peril.

[Wood-Harp]

“In 2008, Ed [CIGNA's CEO] made $12.2 million. That's $5,883 an hour. Ed makes more in one day than the average worker makes all year long” A registered nurse may earn (in many areas) $47,000 - a year. He or she had to achieve a challenging college degree in order to realize that professional & respectable position - one based on providing care for patients. How might a typical (middle-class) nurse react, knowing that CIGNA’s CEO receives $47,000, from behind a desk - in eight hours (which includes chauffeured commutes and other assorted “perks” - like “healthy” massages)? Assuming a 35% tax rate, what could be done with $7.8 million - net - in one year? Aside from commitment to causes focused on making the world a better place, some could settle for a $1.8 million mansion, $2 million in basic checking, and $4 million in an interest-bearing account - as a setup/parachute - For Life. But, if others want to stand out even more spectacularly for their children on shows like “My Super Sweet 16," then their goals have to be higher - like (CEO of UnitedHealth) Stephen Hemsley’s ($128 million). Question: Regardless of graduate degrees or experience, who, in salaried positions, deserves to “[make] 30 times more than the President of the United States” - yearly? Another question: Would it be more worthwhile to work for a respectable wage, which covers all the basic desires & essential needs, or to endlessly seek the next $10-100 million - while

[Wood-Harp]

Would it be more worthwhile to work for a respectable wage, which covers all the basic desires and essential needs, or to endlessly seek the next $10-100 million - while losing one’s soul?

[exmate]

The notion that earning more money is the way they keep score is a principle that is dragging this whole country down.

[johnsopinion]

If we lose, we only have ourselves to blame. Each one of us. Individually.

It will mean that we have accepted what we have been told as the gospel
truth from all outside sources without examining it to see if in fact it is true.
Any little part that we allow into our belief system becomes a part of us,
becomes who we are, what we believe. In other words, those beliefs we
accept become our world, our reality. And we will continue to create a world
based on those beliefs, right or wrong.

In order to change the world, you must change your beliefs. There is no
other way. Think about it.

[robadeaux]

Mr. Creamer isn't paying attention... it isn't that we have already lost... it's that we were never really in the game.

[gaebolgaes]

we lost!

[ntmessage]

Many of the staffers handling the phones have been trying to talk people out of their opposition or spinning their constituents by using the buzzwords and misleading language we hear every day in the media. They are “handling” the people instead of listening to them. Phone calls alone seem to be useless, especially in smaller communities where “the fix is in”, like a back office of an insurance company that was put their specifically for getting that congressman’s vote alone. This was a page right out of the defense contractor’s handbook that puts factories in as many states as possible to gain political advantage. Similar techniques to overcome the stranglehold as used in those battles are needed. Putting the people paid off in the spotlight. We can forgive anyone who has taken contributions from the industry, and yet is still for a public option. Those that still are not for the public option the message is clear. Instead of health care for my children, the congressman wants to put money in the pockets of a bloated, inefficient, wasteful, corrupt and immoral user of our taxpayer money. Not defense contractors, but the health care industry. Blackwater = Health Care Industry.

[Zorro124]

This is the last straw. I supported Obama on the health care issue, however if we do not get a ROBUST plan, I am done with the party. The party of no spine!!

Z

[wildedge]

This is the case Obama had to make - and didn't - the insurance companies are not our friends, they are greedy, blood-thirsty profit-motivated abusers of a system originally designed to control the profit-motivated costs of the heath-care providers. The free-market has failed us in health care - thef orces of the market place cannot rectify our costs and damages because of the inherent corruption of the third-party payor structure.

[exmate]

Maybe the insurance companies need to be taken over- nationalized. There are majorities that could make that happen.

[justobserve]

Of course! It means Obama was bluffing us when he vowed to fight for us! Now, look at how he fights! It's just incredible that he saw people were desperate for change and used it to get to the WH. He won't win a second term if there is no public option in the reform. He didn't even support it and now even wants a mandatory insurance! This is too incredible for words!

[valboski]

The losers are the Ameican citizens. Insurance should be available a la carte and across state lines. It should be tax exempt and portable. Do the House or Senate Bills give us this? NO. It isn't about us, it is about power and $ for politicians.

[JShep]

Before we get down on the insurance companies too much, consider the government versions of healthcare insurance. Both Medicare and Medicaid will go in the red within the next 10 years and they currently have tens of trillions of dollars of unfunded mandates (cost our grandchildren will have to pay). There is no way they can continue without major cost increases and/or cuts in care. With all the proposed healthcare bills cutting funding from Medicare, it should be apparent that some coverages will have to be denied. Before we throw out the private insurance, we should take a good look at the current problems that exist in our government insurance also. I bet there will be just as many horror stories about denied coverage.

[cybexg]

wait...Medicare and Medicaid have been consistently underfunded, have had their funds redirected to other useages, etc and they WON"T go broke untill 10 years from now???

Right there that indicates they are well managed...well that and the republican backed study that actually determined that medicare was nearly 10 times more efficent (in terms of dollar in to dollar paid for health care) than the best performing insurance company...

[rf-hawaii]

There is no comparison. Something like 5% overhead versus 31% for private insurance.

Private health insurance in America is a disgrace.

[BillyPilgram57]

They are already spending the money.....­..........­....... Looks like getting
America back will take baby-steps­..........­..... starting by throwing out
the "bought off" politicians.

[alex61]

I'm no fan or defender of insurance companies, but beating up on them isn't the only way to save money. Why doesn't the gov. change the regulations to make it okay to shop for insurance in other states and with other companies? That increased competition would help bring down costs as well as profits, salaries, bonuses, etc. What's the hold up? Is this part of the proposed reforms?

And how about tort reform? It does seem that the special interest group known as the trial lawyers have the Dems in their pocket. Cutting down on lotto lawsuits would help lower the cost of health care.
These two things might allow more people to be able to afford their own insurance.

Whatever else we do in the name of "reform," these two changes should certainly be part of the package.

[babina]

Tort Reform: The Be All and End All for Right Wingers and Republicans to Solve the Health Care Insurance Emergency. Another lie.
http://www.huffingtonpost.com/miles-j-zaremski/the-last-shall-be-first-k_b_269322.html

"And many seemed to applaud efforts to reform our tort laws, because it was said (that such reforms would save the health care system billions of dollars -- though Congressional Budget Office and government studies relied on have published reports indicating that the states' medical-legal liability system only adds .58 of one percent to overall health care costs. .58 of 1% of overall health costs. Hello? How in the heck does lowering medical malpractice insurance for doctors, i.e., tort reform, decrease health care insurance costs and ensure patients are being treated fairly? How does that eliminate the recission of coverage at the direction of the insurance company, the insurance company finding any way they can not to pay for your care, the astronomical increases in monthy premiums and out of pocket costs? One thing has nothing to do with the other. The health care insurance company will still dictate your care and make the decisions regarding your care. Tort reform will only result in making doctors richer and the middle class struggle even more, especially when a mistake IS made. That would be the republican way.

[babina]

In addition, being able to purchase insurance from a company in another state won't lower costs without the public option or strict regulations. So an insurance company in Alabama will be able to charge whatever they want the same as an insurance company in Pennsylvania or Washington or any other state, which they will because they can.

Why would any company running a successful rackett lower costs for their fool customers when their fool customers have no choice but to pay what they say? This is a no brainer!

[cybexg]

Lawsuits represent only 2% of the costs to malpractice insurance providers. ONLY 2%!!! In the states that have passed tort reform, they have received NO (NONE, ZIP, NOTHING) benefit. In fact, they have actually lost ground (as compared to states that have not passed tort reform). Tort reform is yet another lie intended to further weaken the average citizen.

[serena1313]

Perry convinced a lot of Texans to vote for tort reform in-part by promising our insurance rates would go down. They did not go down, they went up. "Frivolous" lawsuits and lower premiums are more myth than truth.

The only ones who profit from tort reform are insurance companies. They still charge exorbitant prices, but pay less for malpractice suits. If a patient's life is drastically changed (handicapped and/or unable to work or a death occurs) as a direct result of a doctor's incompetence such as amputating the wrong leg or prescribing the wrong medication or botching an operation that was unnecessary in the first place or some other act the patient should be compensated accordingly.

Tort reform, however, would put a cap on the amount of compensation the injured person could receive. Imagine being crippled or handicapped, unable to work -- at no fault of your own -- how would you survive?

The high cost of insuring doctors is not due to frivolous lawsuits, but because insurance companies have to pay whatever the jury decides is just compensation. Although there are relatively very few that cuts into their profit margin so they make-up the difference by raising (everyone's) premiums.

Texans found out the hard way that 'tort reform leads to lower insurance premiums' is nothing more than a myth. The harsh reality is insurance companies profit at the expense people's health and welfare. Don't let anyone convince you otherwise.