It's Time For Private Insurers To Prove Their System Works: Fix It Yourself

07/31/2017 08:13 am ET Updated Jul 31, 2017
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If, as Republicans claim, the private health insurance system really works, then it’s time for our fine private insurance companies to prove that America needs them, and not a federal single-payer system. You really run the American health care system.

Fix it.

The health insurance cartel has been gaming both sides of the Affordable Care Act (ACA) debate to huge profit. Republicans have been trying to destroy the law that was “Romneycare” for their own, different agenda. Both have added billions in needless costs and complexities to a system that serves itself first, and its subscribers as an afterthought.

IS BIPOLAR BACKING COVERED?

In 2010, 105 insurance companies lobbied heavily to influence the legislation that became the ACA. They were given federal subsidies called “risk corridors.” If they fell short of the proper balance between healthier younger subscribers and sick ones, until the system could balance itself out, the federal government would compensate them, to the tune of $2.9B.

Then, in 2012, insurance companies spent $100M dollars of money that they collected from your premiums not on your good health, but to defeat the ACA.

Why play both sides? In Republicans’ zeal to uninsure millions of Americans, they stepped on the health care insurance industry’s toes in two big ways:

  • Republican governors, after losing lawsuits against the federal government to stop the ACA, tried to tank it by not participating. Governors of 22 states refused to take the ACA-authorized Medicaid assistance to pay for millions of poor people to get the medical insurance that they need. Today 19 states still do not participate. That pulled a lot of money out that insurance companies were counting on.

FamiliesUSA.org
  • As was done with Medicare, “risk corridors,” payments to insurance companies by the Federal government to stabilize the system while insurers and government worked to bring everyone on board to having their own health insurance, were slashed. Florida Senator Marco Rubio spearheaded legislation to bring the $2.9B in risk corridor payments to just $400M. “Rubio bragged that he’d ‘saved taxpayers $2.5 billion,’” Salon noted. The insurance industry sued, and won. Rubio’s recklessness may cost the federal government $8B in back-payments plus court costs and damages.

HEALTH INSURANCE IS HEALTHIER THAN ITS SUBSCRIBERS

Don’t feel too bad for the insurance companies which have had a half-decade of record share price growth under the ACA:

Five year snapshots of the stock prices of some of the top publicly-traded insurance companies that have profited hugely off
Source: Google/Yahoo Finance
Five year snapshots of the stock prices of some of the top publicly-traded insurance companies that have profited hugely off of the ACA.

FIX YOUR OWN (DAMN) MESS...

You let private insurance turn into a mess by not working collaboratively, as an industry. Hundreds of insurance bureaucracies. Hundreds of thousands of plans in 50 states and territories. SIngle payer’s biggest advantage is the streamlining of all that duplicative bureaucracy and the huge cost burdens to the medical business.

Republicans tell us that the private sector can solve all problems? Then avoid the ’nanny state.’ Why wait for the government? The health insurance industry can fix itself:

  • Simplify. In some states, one insurance company alone can have hundreds or thousands of variations of plans. It overwhelms physicians, hospitals, and suppliers. Just to figure out how to get paid, health care providers shelled out $471B in 2012 alone in billing and reimbursement. A simplified system puts $350B of that back into medicine, nearly 15% of total health care spending.

  • Standardize - There is far too much variation in the quality of health insurance from state to state. Many of the top carriers are national. Lobby for a national system that will improve care by nationalizing risk pools and plans. Care needs to be available in all 50 states. Someone working for three months away from home can’t be paying for care that’s only good where they reside.

  • Subscribe - There is a staggering cost of uncompensated care. Doctors and hospitals have been hit with approximately $424.5B in uncompensated care over the last five years. Lobby to strengthen the ACA’s compulsory insurance mandate. Get everyone under a policy.

  • Self-regulate. You are in an unusual business. You have the shareholders’ interests, the American public’s health, and the viability of the American economy in your hands. Oh, and eight of you CEOs rake in $171M a year. You all bristle when government tells you how much profit you can make. Report, transparently, on what you put into subscriber care, and how much you keep for yourselves and shareholders.

  • Shepherd. Every aspect of the health industry, from doctors and hospitals to pharmaceutical companies and medical device makers depends on you. Team up with Medicare. Call all of those players to the table. Hammer out much more simplified deals to approve procedures, pills, and potty prices, everyone profits and service to your customers improves. Lobby the 19 states who don’t take Medicaid to join the ACA.

  • Sign Up. Insurance companies spend a lot of money to market. Republicans talk a lot about Health Savings Accounts. Set up your own. Give a young person a plan that they can keep their whole life, that can move with them to another company should they prefer to do business with another insurer. Help young buyers see that they’re buying a long-term product that has value to them.

  • Share - Develop better collaborative risk pools and/or reinsurers to keep people covered and keep your bottom lines intact.

  • Structure - Insurance companies do great. Per capita average lifetime costs of paying out on insurance y’all are roughly $316,600. Medicare covers most Americans after age 65 for the majority their expenses. If an insurance company charged $375.00 a month (about $4,500 per person) over 72 years, they bring in $324,000. Now, assuming, as they do, that insurance companies invest that money to make a lot more, based on the gains of the stock market over the decades, the company can turn that, over a subscriber’s lifetime, into more than double what they take in. Plan long term as an industry with more cohesion.

THE REALITY

We all know that the private sector could never do this. It does not work collaboratively. They do not work in the public interest. They are only accountable to themselves and their shareholders. Victimization of the insured is guaranteed in our private system. Profit precedes people.

When you need it most, most Americans know that they can’t really count on their health care providers, and that they will have to pay huge out of pocket costs to stay alive. Personal bankruptcy for major illness remains a huge problem with an unmodified ACA.

With more people losing good jobs to technology, including physicians, private insurance will fail to cover as many as 80M people by mid century.

Government is the only agency accountable to all citizens, and where citizens can demand, via elected officials, some accountability for essential services.

All health care systems have warts. Being tossed from plan to plan by insurers who treat your health care like it was the slot machines in Las Vegas? Is that acceptable to you?

Will your insurance company keep you from going bankrupt when you have cancer? Pay for years of care when your mom when she has Alzheimer’s? Your kid when they have a spinal deformation? Or will they stop insuring you one day, which is their right, because you don’t meet their demographic. Try to move to a new company without your employer’s good health care for your sick kid?

It’s time to stop being held hostage. The real right to life in “Life Liberty and the pursuit of happiness” is health care for all. The only real insurer of that happiness is the government that makes that social contract with you, not Anthem, Cigna, or Aetna.

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