The biggest applause line Senator Diane Feinstein (D-Calif.) got at a gathering of Democratic Party activists last week came when she endorsed a ballot initiative to give the California Insurance Commissioner power to reject excessive health insurance rate increases.
Consumer advocates there decided to go the ballot initiative route after the insurance industry's friends in the legislature blocked a bill last year that would do the same thing. Feinstein became the first Californian to sign a petition. Insurance Commissioner Dave Jones became the second. To get the measure before voters in November, the advocates, led by Santa Monica-based Consumer Watchdog, must collect half a million more signatures.
In her San Diego speech before the party faithful, Feinstein pointed out that in the first quarter of this year, the five largest health insurers -- UnitedHealth, WellPoint, Aetna, CIGNA and Humana -- posted profits of $3.6 billion, 16 percent more than the same period a year earlier. One of the ways those companies were able to achieve such Wall Street-pleasing success was by jacking up the rates on policies bought by individuals and small businesses. While most of these policyholders dug deeper into their pockets to avoid joining the 50 million Americans who are uninsured, many others had no choice but to let their coverage lapse.
As Feinstein noted, thousands of Californians have been forced into the ranks of the uninsured in recent years because of policies being priced beyond the ability of individuals to pay. She said many people in the state had received rate increase notices twice over the past year alone.
According to the California HealthCare Foundation, health insurance premiums in the state increased 153 percent from 2002 to 2011, more than five times the rate of inflation for other goods and services during the same period. As a consequence, a growing number of the state's residents have been priced out of the health insurance market.
And this is not a situation unique to California. A review of financial statements filed with the Securities and Exchange Commission shows that while the five biggest insurers earned billions in profits last year, the number of people enrolled in what they call "fully insured policies" -- primarily employees of small businesses or individuals who have no alternative but to buy coverage on their own -- decreased.
That is a continuation of a trend that's now several years old. The vast majority of the big five's membership comes from service agreements they have with large employers, not from actually insuring individual Americans. The companies have, in essence, transformed themselves into benefit administrators for big corporations that self-insure and for the Medicare and Medicaid programs. It's no longer even accurate to refer to those five companies as insurers. They certainly don't. If you look at their websites, you'll see that they call themselves "health services" companies or the like. You'll be hard pressed to find the word "insurance" on their sites or in their promotional materials. That's because the number of people they actually insure continues to dwindle.
While the big five reported covering 3.5 million more Americans at the end of 2011 than at the end of 2010 -- from 106.5 million to 110 million -- the number of people enrolled in their individual and small business plans actually declined by more than 400,000. The enrollment gains came almost exclusively from their "administrative services only" customers.
The federal Affordable Care Act should reverse that trend when the states get their health care "exchanges" (online marketplaces) up and running by 2014, as required by the law. Starting that same year, insurers can no longer refuse to sell policies to people because they've been sick in the past. Additionally, the requirement that all of us must have coverage will become effective.
While the law grants the Secretary of Health and Human Services the ability to question rate hikes of 10 percent or more and to proclaim such increases excessive, it doesn't give regulators at either the state or federal level to the authority to reject them. Which is why consumer advocates in California are hard at work to get the requisite number of signatures to get the initiative on the ballot. While the state's insurance commissioner can reject excessive auto insurance rate increases, he doesn't have the authority, which regulators in several other states have, to block exorbitant health insurance hikes from taking effect.
Feinstein said at the San Diego party conference that a growing body of evidence indicates that California insurers are raising rates in the individual and small group markets even higher than usual this year in anticipation of being required to insure everyone who applies starting in 2014. That, too, is not limited to California. As enrollment statistics reported by the big five earlier this month show, it is a nationwide phenomenon. A former insurance commissioner in Missouri told me recently that agents and brokers have told him that insurers are now rejecting far more individual applicants than usual and hiking premiums much higher than in previous years.
When insurers behave this way, they are demonstrating that they care more about their bottom lines than their policyholders. Which makes it all the more imperative for California voters to sign those petitions and vote for the ballot initiative this fall.
Follow Wendell Potter on Twitter: www.twitter.com/wendellpotter
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this is the real solution Mr Potter.
She is a disgrace.
Otherwise- getting tired of Wendall. Excess raete increases are what exactly??
My wife just dropped her insurance finally after a 25% rate hike- AGAIN- on a get nothing policy.
Censorship is evil.
Profit is not evil, except to individuals that can not make any.
As for state-run health care, Medicare is administered much more efficiently than any private insurance company - that is a fact. When the state has to answer to its taxpayers for their state-run health care, exorbitant profit-making goes out the window and is replaced with a far better system of preventative medicine, which lowers the cost all around and is by far in the best interests of actual patients. Here in the US, most of us are paying 12 months of overpriced premiums plus the deductible and co-pays every year without receiving any benefit at all. Is this really what you'd want to choose over a modest tax-increase that would replace an inefficient, profit-oriented, private system whose best interests are served only when the general population is unhealthy?
I think if you check your facts, and don't just regurgitate the usual anti-socialist rhetoric, you'll find that people who live in socialist countries with universal, state-run health care are quite happy with the service they get. Doctors are paid less, hospitals are owned by the state and are non-profit, and a focus on preventative care ensures a healthier population, for less money all around.
F&F
Medicare will never be as efficient as private insurance companies. Remember, government is never as efficient as private industry.
Profit is only evil to those who can not make any.
Do you really understand the structure of the medical cost and payment system?
It is not about rhetoric, it is about learning that socialism does not work for society as a whole, just for certain special interest groups.
ACA mandates insurers pay out 80% of the money they take in. Meaning, you pay over 25% extra by having insurance, instead of paying for it yourself. I'm 61 and uninsured, and get 25% off for medical, hospital and ER because I pay cash.
And I never get checkups, tests or drugs that ACA mandates I pay for. I'm a scientist, worked in medical imaging. So-called "preventative medicine" does not save money, the CBO says ER use and total medical expense will rise as more get insured by ACA.
ACA mandates insurers pay back 80%, and they'll do that. After that, every extra mandated ACA coverage raises the cost of insurance, more than if people paid for it themselves. That will cost employers more, they will take out of workers wages and raise employer contributions. The extra cost will discourage hiring. The increased cost for individuals will cause more to violate ACA and be uninsured. Millions will become bankrupt because they couldn't afford the bloated medical plan - to pay for drugs for much richer people.
Insurance companies are forced to re-act and anticipate further abuse.
The Law of Unintended Consequences ALWAYS rules with an iron fist.
You do not want any solution.
freedom is fundamental ??
then how can anyone be really FREE if all their essential needs cannot be met ???
YOU NEED to RETHINK Freedom
However, 75 years of social democratic bastardization of language designed to distort the term, "freedom" into its opposite can help you understand the difference between freedom and its social democratic bastardization.
Unless your mind is entirely shut, see:
http://plato.stanford.edu/entries/liberty-positive-negative/
for a basic explication of the difference between the negative liberty upon which this nation was founded and the positive liberty FDR and other social democrats have designed as freedoms bastardization.
When someone in Canada complains I ask them to take their dog to the veterinarian who is not under Healthcare and see what the costs are..
Ultimately Healthcare MUST be Nationalized it really is the only way and struggle against it all you want; it will happen. Just not soon enough for my generation. Believe me, I've had many, many conversations over the years about nationalization...people within the industry are well aware that it is inevitable.
SINGLE PAYER is the real SOLUTION.
faved
Keep electing REpublicans,conservatives and especially tbaggers and keep getting ******
One thing that is for certain is that if California institutes de facto price controls, availability of health insurance will decline. The last century is full of examples that confirm that price controls reduce the availability of the product or century, and there is no reason why California's health insurance industry would be different.
To be clear, this is a major change that would put California on the path toward less choice and likely on the road to state-funded insurance for all. I'm sure some of the backers of this initiative have that as an unstated objective, but if so, they should be honest about it. Bleeding an industry with regulation prior to moving in for a state takeover based on its lackluster performance is a tactic for banana republics, not honest, open democracies.
I'm 61, older than Medicare and originally it and private policies were "major medical" only. My parents and I paid for everything except hospitals and ERs - and the US spent half as much on medical, as a percent of GDP. The more that got covered, the more we spent.
It's simple: medical plans are like mandatory auto insurance that covers maintenance, repairs and gasoline. Do you think we would spend less on driving with that system - or about twice as much, as we did with full-blown medical plans?
I have a suspicion (though I have no evidence) that the reason that most insurance is no longer "major medical expenses only" is because of cost creep. I'm only 30, but my parents were able to easily afford getting checkups and routine medical expenses. When I look at the "standard rate" for similar practices for my kids, I'm shocked by how much they are. Covering every little thing via insurance has become a self-fulfilling prophecy because it drove costs up to the point where only those with insurance can pay for anything.
And if the industry is out of control, isn't it possible that excessive government invervention is part of what created the current state of affairs? If this can't be completely ruled out (and I don't think it can), how will additional government restrictions help?
But what is killing me and all of us here on the gulf coast is homeowners insurance rates. I have a (2004 built) house with strict hurricane building codes and have never had a claim. I don't live near the water or in a flood zone and my premiums have increased since Katrina over 500%. I don't care what the reasons are, I and most here have been priced out of the market. I simply can't afford to be insured any more. I have to have insurance because I have a mortgage for now. I had to lower my coverage and raise my deductible so high I will never be able to make a claim. I called the insurance commissioner but he basically said, too bad. Suck it up.
All of the insurance I pay is outpacing pay increases so fast I don't know how we will survive in retirement. We won't. Many here who have paid-for homes have had their wind insurance dropped by their insurance company. Those are mostly older homes that are more vulnerable.
Americans need help from the burdening costs of ALL insurance. I would gladly welcome paying for a "Government" non-profit insurance.
It used to be that having insurance was a no-brainer because it was very affordable. Now it's better to save your money and take you freaking chances.
It seems to me that it started going downhill in the mid eighties after Reagan deregulated it...
A HD plan is like: you pay all your own costs, up until the first (say) $5K in a year, everything above that is paid for. That policy might cost $3K. Instead you'll buy a plan with no deductible, covers everything, and it will cost $6K. So unless you spend more than $3K in a year, you save money with the HD plan.
I don't use checkups, tests and drugs, but ACA requires I buy a plan that pays for them. An HD plan would give me insurance, not force me to pay for others use of services I will never use.
SCOTUS will probably find ACA unconstitutional - BECAUSE it doesn't allow HD plans. Forces us to pay for things we don't use, instead of just insuring ourselves.