The Audacity of Greed

The health-insurance industry has finally revealed itself for what it is.

Insurers hate the idea that's emerged from the Senate Finance Committee of lowering penalties on younger and healthier people who don't buy insurance. Relying on an analysis by PricewaterhouseCoopers, insurers say this means new enrollees will be older and less healthy -- which will drive up costs. And, says the industry, these costs will be passed on to consumers in the form of higher premiums. Proposed taxes on high-priced "Cadillac" policies will also be passed on to consumers. As a result, premiums will rise faster and higher than the government projects.

It's an eleventh-hour bombshell.

But the bomb went off under the insurers. The only reason these costs can be passed on to consumers in the form of higher premiums is because there's not enough competition among private insurers to force them to absorb the costs by becoming more efficient. Get it? Health insurers have just made the best argument yet about why a public insurance option is necessary.

Right now they run their markets and set their prices, and pass on any increased costs directly to consumers. That's what they're threatening to do if the legislation attempts to squeeze, even slightly, the colossal profits they plan to make off of thirty million new paying customers.

They want every penny of those profits. They demand every cent. And if the government dares raise their costs a tad higher than they expected when they first signed on to support the bill, they'll pass those costs on to consumers in the form of higher premiums. They can carry out their threat only because they have unaccountable, untrammeled market power.

But they've now hoisted themselves on their own insured petard. They've exposed themselves. If they had to compete with a public insurance plan, they couldn't get away with this threat. They couldn't pass on the extra costs. They'd have to compete with a public insurance option that forced them to give consumers the best deals possible.

Now's the time for Congress and the White House to say to the insurance industry: You want to play hardball? Okay. We'll play it, too. You didn't want a public insurance option. That was one of your conditions for supporting the bill. You wanted gigantic profits from having thirty million new paying customers and the market to yourself. The Senate Finance Committee and the White House agreed because they wanted your support and were afraid of the negative ads and hurricane of opposition you could finance. But you're even greedier than we imagined. And now you've demonstrated that greed to the American people. They don't want to turn over even more of their hard-earned money to you. So, insurance companies, we've got news for you. We're going to make sure Americans have the freedom to choose a public insurance option that's cheaper and better, and you're going to have to work hard to keep them your customers.

Cross-posted from Robert Reich's Blog

Comments

[Rising Lion]

Rising Lion believes that everyone should have health care. It is definitely a civil and moral obligation as well as a universal right. Everyone deserves the right to get medical attention if they are sick or hurt regardless of social, economic, or cultural circumstance.

Write your senators and congressmen urging them to make health care reform a reality in the US. We owe it to ourselves, our kids, and the generations that follow to take a stand now for what is right.

The present health care system is broken and littered with problems of out of control costs, lack of competition in providers, and thus lack of accessibility for millions of Americans. We need a public option to level the playing field and provide affordable options.

Rising Lion will help make that stand, will you?

Get the facts here:http://www.healthreform.gov

Remember One People, One Aim, One Destiny! Roots, Rock, Reggae for healthcare reform!

[dplum]

The drug companies are taking advantage us.

I have kept records for years of our medical bills.

My wife takes Femara, an anti cancer drug 100 tablets.

These prices are from the web or what we paid not made up.

USA List price in Sept 2007 $735, May 2008 $830 , Oct 2009 $1267

Canada July 2008 Femara $539 Generic Oct 2008 $427 Generic Oct 2009 $300
Just the fact that the price in USA is going up and the price in Canada is going down makes me furious with the present system.

The USA drug companies said they would reduce their prices 50% for people in the so called "doughnut hole" if the drug bill gets passed
So they raise the prices and with a discount they will still be making the same profit.
We need reform in this country and not the slanted quotes from the Lewin group.
"You can fool some of the people all the time, and all of the people some of the time, but you cannot fool all of the people all the time. "

No wonder the people in this country think big pharma is screwing us.

[smower]

Mr. Riech's basic premise is that a public option would be cheaper and better than the options provided by private insurers. I remain unconvinced that this is the case. I believe there are far less riskier COAs to try before resorting to the public option and alternative means such as reducing out of state insurance shopping barriers to foster more competition. I also disagree with the premise that access to health insurance is a universal right. It is a lofty goal but not a right. I am extremely hesitant to support legistlation that risks bankrupting my nation and dramatically expanding the reach of government simply because a segment of our population believes it is the "civil thing" to do. I fear this health care reform effort will ultimately yield another unsustainable entitlement and could bankrupt us.

[littleolwinemakerme]

But I'll bet you weren't so worried about Dubya bankrupting our country in Iraq & on Wall Street.

[df2112]

What on earth does your response have to do with the original post?

[smoothdogie]

I agree that the public option is an important part of this reform effort. Equally important in my opinion is that the insurance industry be subjected to the same anti-trust laws that everyone else lives by. If the industry is still allowed to act in unison and squelch competition there will be no changing their voracious appetites.

[p marie]

Health care should never be a "for profit" industry. It should be a basic right for every human being regardless of income. This is why it should be paid for via income tax, as it is in most civilized countries, and offered without question to all citizens. I am very glad to live in Canada where this enormous worry over your health and ability to pay does not exist.

[Harry Miaflusa]

Good for u & us,stay there,enjoy the weather & socialism...

[LITU]

Personally, I'm supporting HR 676, the single-payer (option). And I don't give a rat's whether the health insurance industry survives or fails.

Why would ANY employer prefer private coverage for its employees? What long-term stability and benefits do they perceive can come out of unrestrained costs and coverage discrepancies? A continuation of the capitalist model? The h_ll you say.

[Harry Miaflusa]

Try to bring down the insurance industry,see if u can...

[LITU]

Spoken like someone with a vested interest, and little interest in the citizenry.

[BenTrem]

Why would ANY employer prefer private coverage for its employees? Because that corporate executive plays 18 holes now and again with the corporate executives who decide what person gets treatment and what person doesn't. You can't ever ignore the social aspect of economy ... "birds of a feather" isn't about just Twitter and FaceBook.

[Leatherhelmet]

The public option is not competition since it can tax and sets the rules. That is not competition, that is dictation.

[MajorNews]

1st, we have Public schools, Public transportation and many other such public services, right?
Or are you saying that we should shut down the Metro in NYC, Washington DC, etc. because they are unfair competition for Taxis!!!

2nd, once again and for the MILLIONTH time, in Canada, ALL European countries, in fact all developed nations of the World and many developing nations too health care is provided on a Universal Nationalized basis AND that is why health care is taking about 9% of GDP on average in ALL European countries in contrast to 18% of GDP in USA and every one in European countries has health care for free, or for little payments, that is free for the Taxes that they pay AND that is why their economies are doing much better than US economy as EVIDENT by:
1- Euro being so much more valuable than US Dollar

2- Europeans Auto makers doing fine while US ones went bankrupt, with 1 German Auto maker, VW, having a market valuation MANY MANY times of all US Auto makers combined and while in Germany Auto makers did not lay off even ONE German Auto worker while US Auto makers laid off 10s and 1000s of US Auto workers
etc. etc.

[Harry Miaflusa]

Go to live in Europe,
with Lego homes,Mickey Mouse cars,
paroled murderers.no guns,
catching flu/tb viruses in public transport,,
paying 50% in income taxes,22% sales tax,150% gas tax,100% heating oil tax.
visiting bordellos with goats ( Denmark),
voting paidophile politicians ( Holland)
& praising some...king or queen...

[Harry Miaflusa]

Pack your stuff & go to Europe.

[gfs5541]

Nonsense. The Public Option is in sheer reality one insurance plan among many! The health insurance industry doesn't want competition. Sheesh, They got an anti-trust exemption via the McCarran-Ferguson Act. Is this what you conservatives call competitive?!

[nexxtep54]

These insurance companies are just begging people to shop out-of-country for their insurance needs.

[georgiaR]

And with a public option "will I still be able to keep my doctor and coverage if I like them?" I just wish Obama would tell the truth.

[nexxtep54]

What planet have you been living on?

[martinchill]

there should not even BE insurance companies in the first place.

HMOs for everybody!

[WhitemoonG]

Greed, Greed, "record profits," "obscene profits," "unconscionable profits," blah blah blah



In case an important BASIC fact matters to anyone during this predictable demagogic feeding/thrashing frenzy,


The profit margin for this industry averages an unbelievable, shocking, whopping 3%!!!
This is toward the BOTTOM of the scale, lower than most average bread and butter industries.



Funny how all the demagogic frenzy, fueled by appropriate concern over COSTS and access, fails to consider the real problems involved.

[MajorNews]

Did you actually say that:
"The profit margin for this industry averages an unbelievable, shocking, whopping 3%!!.."

1st, It is more like 20%
2nd, These profits are also after paying an army of (connected) top execs in each of these health care companies $20 to $50Mill annual salaries, plus having them fly in a fleet of $50Mill private jets, plus many other Multi Million Dollar luxuries, ALL of which we the American (middle class) pay for with our exorbitant health care costs, that is WHY in Canada, ALL European countries, etc. the salaries of Doctors and health care execs are capped, set by the Government, at the very generous level of about 200,000 Euros per year, which is salary of a 4 Start General in US, and which is a salary greater than more than 97% of Americans make.

[nexxtep54]

Yeah, sure. 3% after the greedy CEO's have siphoned off the other 37% into their bonuses.

[df2112]

Then why not just become a CEO yourself and give the 37% away to whoever you deem worthy?

[df2112]

I gotta say, you're pushing it a bit here.

If you want to see Lego homes, go NYC, DC, or Boston and find 900 sq foot condos costing 900K. That's a problem.

If you want to see Mickey Mouse cars, you won't find them in the product lines of Mercedes-Benz, BMW, Porsche, Jaguar, Lamborghini, Rolls Royce, Bentley, or Ferrari. You might, on the other hand, find them within the Ford, GM, or (ex) Chrysler lines.

[MajorNews]

This threat by the health insurance companies to raise rates on American people & businesses if health care reform passes that
threatens their profits, when American people & businesses (and thus Government) are already paying
like 10 times as much for health care than are people & businesses paying for health care in ALL European countries, Canada, etc.
is the ULTIMATE and BEST proof that what we need is Universal Nationalized Health Care AND that is why all developed
nations and many developing nations, from ALL European countries, to Canada, to Japan, to China, to Australia, to Israel, etc.
ALL have one form or another of Universal Nationalized Health Care, which means:

1- Everyone gets health care for little cost, or for free, for the people's obligation to pay Taxes, as we get the Military, Police,
Fire department the same way in US

2- Health care is pretty much operated on a Not-for-Profit basis and also salaries of Doctors, health care execs and cost of drugs, etc. are capped by the Government. So just like the Government in US sets the salaries of the 4 Start Generals or all officers in the Military, or sets the salaries of the Federal Judges, etc. etc. Governments in European, Canadian, etc. countries also set the price of how much health insurance companies or drug companies or anyone involved in Health care can charge.

4 much more on this subject, u can read:
http://www.tiny.cc/bvs2a

[Harry Miaflusa]

The socialised medicine in the countries u refer to,
is a dream on paper
& a nightmare in reality.

[nwhank]

The rising cost of health insurance is already putting millions at risk (http://public-healthcare-issues.suite101.com/article.cfm/underinsured_in_america). If the insurance companies are left unchecked, only the rich and the politicians (http://public-healthcare-issues.suite101.com/article.cfm/health_care_for_the_us_congress) will be able to afford care.

[TLV]

I will never forget what happened when I was pregnant with our first child. I was thrilled that our insurance plan would cover nearly 100% of the costs of prenatal care, delivery, and post natal. What great timing, right? Not so! I got pregnant in October and by November, they had raised their rates by 75%!

Needless to say, my husband's employer dropped the planfor the following year during which time the delivery would take place.

[1differentdrummer]

You think they don't set their own prices? I know a couple who own a small business that just got a 43% increase in their health insurance premium with no change in people insured. If that isn't robbery, tell me what is.