PNHP

Profits for largest insurers now 30%

Profits for largest insurers now 30%

Health Insurers Break Profit Records As 2.7 Million Americans Lose Coverage

Health Care for America Now!
February 2010

The five largest U.S. health insurance companies sailed through the worst economic downturn since the Great Depression to set new industry profit records in 2009, a feat accomplished by leaving behind 2.7 million Americans who had been in private health plans. For customers who kept their benefits, the insurers raised rates and cost-sharing, and cut the share of premiums spent on medical care.

Executives and shareholders of the five biggest for-profit health insurers, UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp., enjoyed combined profit of $12.2 billion in 2009, up 56 percent from the previous year. It was the best year ever for Big Insurance.

Of the estimated $809 billion spent on private health insurance in 2009, the five biggest forprofit companies…  captured $232 billion.

Medical loss ratios for 2009:
WellPoint – 82.6%
UnitedHealth – 82.3%
Humana – 82.8%
Cigna – 81.2%
Aetna – 85.2%

http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf

Is health insurers’ profit 2% or 22%?
https://pnhp.org/news/2009/october/is-health-insurers-profit-2-or-22

Comment: 

By Don McCanne, MD

In a previous Quote of the Day (link above) it was pointed out that, for investor-owned private health insurers, the percentage of revenues reported as profits does not represent how lucrative the profits actually are for this industry. In light of record profits being reported, let’s look at an update of the numbers.

For purposes of these ballpark calculations, revenues are assumed to be premiums paid for purchase of the private plans (ignoring investment returns on reserves). The revenues are split into 1) a fund to be used to pay for health care benefits, and 2) funds to operate the business entity that is selling insurance services. The latter portion includes all administrative expenses and other costs of running their businesses, plus profits.

Those funds being held to pay for health care, in essence, are funds that belong to the insured and are merely being held by the insurers “in trust.” They are not part of the actual business operations of the insurers. Their exposure to risk is almost negligible since their actuaries continually adjust premiums so that they cover the potential risks.

Their actual business entity is the creation, marketing and servicing of their products that provide administrative services for health care financing. This is comparable to the service that they provide to self-funded employer health benefit programs. The actual business entity is very similar, but the employees’ health care funds are held “in trust” by the employer rather than the insurer.

Setting aside the “trust funds,” let’s look at what the actual expenses and profits are for the five biggest for-profit health insurers.

The non-weighted average of their medical loss ratios for 2009 is 82.8%. That means that 82.8% of revenues go into the “trust funds,” and 17.2% is retained for their administrative and other business expenses plus their profits.

These five companies had combined revenues of $232 billion. Of that, $192 billion went into the “trust funds,” and $40 billion went into their business operations and profits. Their combined profit was $12.2 billion. That $12.2 billion profit out of the $40 billion that they retained for their business expenses means that their actual profit averaged over 30%. Over 30%! No other industry has returns anywhere near this level.

The insurance industry often responds by saying that their profits are less than one percent of our total national health expenditures (NHE). Even if that is true, these five companies alone kept one-half of one percent of our NHE as their profits.

Some in the policy community say that eliminating profits of the private insurers won’t save enough to make a difference. But they miss the point. First, that $12.2 billion would provide for quite a bit of health care. But a far greater amount could be recovered by eliminating the administrative excesses of the insurers and the costs of the administrative burden that they place on physicians and hospitals.

But the most important reason is not even quantified. This intrusive industry has taken away our choices in health care by assessing heavy penalties for care provided outside of their restrictive networks, while putting in place numerous barriers to the health care that we need. Why do we reward these despicable people so richly for their unseemly, heinous acts?

We want a system that helps us get health care that we need, like Medicare, not one that impedes our access to care as they pick our pockets and snatch our purses.

Profits for largest insurers now 30%

Health Insurers Break Profit Records As 2.7 Million Americans Lose Coverage

Health Care for America Now!
February 2010
The five largest U.S. health insurance companies sailed through the worst economic downturn since the Great Depression to set new industry profit records in 2009, a feat accomplished by leaving behind 2.7 million Americans who had been in private health plans. For customers who kept their benefits, the insurers raised rates and cost-sharing, and cut the share of premiums spent on medical care.
Executives and shareholders of the five biggest for-profit health insurers, UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp., enjoyed combined profit of $12.2 billion in 2009, up 56 percent from the previous year. It was the best year ever for Big Insurance.
Of the estimated $809 billion spent on private health insurance in 2009, the five biggest forprofit companies…  captured $232 billion.
Medical loss ratios for 2009:
WellPoint – 82.6%
UnitedHealth – 82.3%
Humana – 82.8%
Cigna – 81.2%
Aetna – 85.2%
http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf
Is health insurers’ profit 2% or 22%?
https://pnhp.org/news/2009/october/is-health-insurers-profit-2-or-22

In a previous Quote of the Day (link above) it was pointed out that, for investor-owned private health insurers, the percentage of revenues reported as profits does not represent how lucrative the profits actually are for this industry. In light of record profits being reported, let’s look at an update of the numbers.
For purposes of these ballpark calculations, revenues are assumed to be premiums paid for purchase of the private plans (ignoring investment returns on reserves). The revenues are split into 1) a fund to be used to pay for health care benefits, and 2) funds to operate the business entity that is selling insurance services. The latter portion includes all administrative expenses and other costs of running their businesses, plus profits.
Those funds being held to pay for health care, in essence, are funds that belong to the insured and are merely being held by the insurers “in trust.” They are not part of the actual business operations of the insurers. Their exposure to risk is almost negligible since their actuaries continually adjust premiums so that they cover the potential risks.
Their actual business entity is the creation, marketing and servicing of their products that provide administrative services for health care financing. This is comparable to the service that they provide to self-funded employer health benefit programs. The actual business entity is very similar, but the employees’ health care funds are held “in trust” by the employer rather than the insurer.
Setting aside the “trust funds,” let’s look at what the actual expenses and profits are for the five biggest for-profit health insurers.
The non-weighted average of their medical loss ratios for 2009 is 82.8%. That means that 82.8% of revenues go into the “trust funds,” and 17.2% is retained for their administrative and other business expenses plus their profits.
These five companies had combined revenues of $232 billion. Of that, $192 billion went into the “trust funds,” and $40 billion went into their business operations and profits. Their combined profit was $12.2 billion. That $12.2 billion profit out of the $40 billion that they retained for their business expenses means that their actual profit averaged over 30%. Over 30%! No other industry has returns anywhere near this level.
The insurance industry often responds by saying that their profits are less than one percent of our total national health expenditures (NHE). Even if that is true, these five companies alone kept one-half of one percent of our NHE as their profits.
Some in the policy community say that eliminating profits of the private insurers won’t save enough to make a difference. But they miss the point. First, that $12.2 billion would provide for quite a bit of health care. But a far greater amount could be recovered by eliminating the administrative excesses of the insurers and the costs of the administrative burden that they place on physicians and hospitals.
But the most important reason is not even quantified. This intrusive industry has taken away our choices in health care by assessing heavy penalties for care provided outside of their restrictive networks, while putting in place numerous barriers to the health care that we need. Why do we reward these despicable people so richly for their unseemly, heinous acts?
We want a system that helps us get health care that we need, like Medicare, not one that impedes our access to care as they pick our pockets and snatch our purses.

Gruber says middlemen brokers can function as exchanges

Md. health care receives good marks

By Shantee Woodards
Maryland Gazette
February 10, 2010

Health care reforms in Maryland need only minor adjustments to be as effective as an insurance “exchange” established in Massachusetts, according to a new report that compared both states.

The report, released Wednesday in Annapolis by two insurance trade associations, found that Maryland’s current system of distributing insurance to small employers and individuals is adequate and takes the place of the so-called health insurance exchange offered in Massachusetts.

In Maryland, there’s an environment “where brokers can buy health insurance and it’s sold to individuals and it looks like our ‘Connector,’ ” said Jonathan Gruber, an author of the report and professor of economics at the Massachusetts Institute of Technology.

http://www.hometownglenburnie.com/news/Health/2010/02/10-21/Md.+health+care+receives+good+marks%0A.html

And…

A Health Insurance Exchange for Maryland?

Comparing Massachusetts and Maryland

By Robert L. Carey and Jonathan M. Gruber, PhD.
Maryland Association of Health Underwriters
National Association of Insurance and Financial Advisors of Maryland

The success of the reform generally, and the Connector specifically, in Massachusetts has motivated similar approaches both at the Federal level and in other states. Virtually every current proposal for reform at the state and Federal level includes some form of “exchange” that would organize and sell health insurance in the non-group and small group markets. The popularity of this approach raises the important question of whether the Massachusetts model can be replicated – and how much government involvement is required to make that a reality. The answer will clearly vary from place to place, and with the details of the proposed exchange.

In this report, we evaluate the possibility of setting up an exchange in Maryland. We begin with a detailed description of the non-group and small group markets in Massachusetts before health reform. We then discuss health reform in that state, discussing both the establishment of the Connector and its early role in health reform. We next turn to an evaluation of the non-group and small group markets in Maryland, and in particular the much more significant role played by intermediaries in that state. In many senses, intermediaries in Maryland play a role much like the Connector plays in Massachusetts. This makes the transition to an exchange much less onerous in Maryland.

http://www.marylandahu.com/broker_images/marylandahuorg/documents//mahu_exchange_study.pdf

Comment: 

By Don McCanne, MD

Many experts touting the Congressional reform proposals have singled out the insurance exchange concept as being one of the most important avenues of reforming the private health insurance market. MIT Professor Jonathan Gruber was involved in designing the Massachusetts exchange and has been an independent-expert-on-the-dole for the administration and Congress as they move forward with the concept of private insurance exchanges.

In this report, commissioned by the insurance intermediaries that would be threatened by an insurance exchange, Robert Carey and Jonathan Gruber conveniently show that Maryland’s brokers are already providing the function of an exchange, so the transition to an exchange would be “much less onerous.” They seem to suggest that we could retain this middleman industry to fulfill the function of the exchange.

They are careful to say that they addressed this one issue only, and did not address the many other issues involved in reform. That’s important since Maryland’s private quasi-exchange has left 800,000 uninsured – over 14 percent of their population. Also Maryland citizens are facing the same outrageous increases in insurance premiums that citizens of other states face. Exchanges alone will not solve these problems.

The Gruber/Obama/Baucus approach to reform has been to take a group of individual policy proposals, such as the exchange, and patch them together in a comprehensive reform package. Each policy concept used has significant deficiencies. When you patch them all together, you still end up with a system that will leave tens of millions without insurance, with inadequate measures to stem health care inflation, with an expansion of underinsurance products, and with increasing financial hardship for America’s workforce and their families.

Private insurers are providing us with expensive, intrusive, and largely worthless services that take away our choices in health care. What good will it do to line them up in a private insurance exchange that adds only the imprimatur of the federal or state governments?

Using the most expensive and dysfunctional model of reform to build on the most expensive and dysfunctional health care system of all industrialized nations makes no sense whatsoever, especially when the goals of universality, comprehensiveness and affordability have been so mercilessly compromised.

The least expensive and most effective model would be to improve Medicare and include everyone. But Gruber’s microsimulation model is designed to assess private insurance solutions. It does not work for a single payer Medicare model.

Isn’t it time that we told Gruber to pick up his model and take a hike? Let’s bring in Steffie Woolhandler and David Himmelstein and take a closer look at their model. Of course the sponsors of this new report by Gruber and Carey would cringe at that prospect.

Gruber says middlemen brokers can function as exchanges

Md. health care receives good marks

By Shantee Woodards
Maryland Gazette
February 10, 2010
Health care reforms in Maryland need only minor adjustments to be as effective as an insurance “exchange” established in Massachusetts, according to a new report that compared both states.
The report, released Wednesday in Annapolis by two insurance trade associations, found that Maryland’s current system of distributing insurance to small employers and individuals is adequate and takes the place of the so-called health insurance exchange offered in Massachusetts.
In Maryland, there’s an environment “where brokers can buy health insurance and it’s sold to individuals and it looks like our ‘Connector,’ ” said Jonathan Gruber, an author of the report and professor of economics at the Massachusetts Institute of Technology.
http://www.hometownglenburnie.com/news/Health/2010/02/10-21/Md.+health+care+receives+good+marks%0A.html

And…

A Health Insurance Exchange for Maryland?

Comparing Massachusetts and Maryland

By Robert L. Carey and Jonathan M. Gruber, PhD.
Maryland Association of Health Underwriters
National Association of Insurance and Financial Advisors of Maryland
The success of the reform generally, and the Connector specifically, in Massachusetts has motivated similar approaches both at the Federal level and in other states. Virtually every current proposal for reform at the state and Federal level includes some form of “exchange” that would organize and sell health insurance in the non-group and small group markets. The popularity of this approach raises the important question of whether the Massachusetts model can be replicated – and how much government involvement is required to make that a reality. The answer will clearly vary from place to place, and with the details of the proposed exchange.
In this report, we evaluate the possibility of setting up an exchange in Maryland. We begin with a detailed description of the non-group and small group markets in Massachusetts before health reform. We then discuss health reform in that state, discussing both the establishment of the Connector and its early role in health reform. We next turn to an evaluation of the non-group and small group markets in Maryland, and in particular the much more significant role played by intermediaries in that state. In many senses, intermediaries in Maryland play a role much like the Connector plays in Massachusetts. This makes the transition to an exchange much less onerous in Maryland.
http://www.marylandahu.com/broker_images/marylandahuorg/documents//mahu_exchange_study.pdf

Many experts touting the Congressional reform proposals have singled out the insurance exchange concept as being one of the most important avenues of reforming the private health insurance market. MIT Professor Jonathan Gruber was involved in designing the Massachusetts exchange and has been an independent-expert-on-the-dole for the administration and Congress as they move forward with the concept of private insurance exchanges.
In this report, commissioned by the insurance intermediaries that would be threatened by an insurance exchange, Robert Carey and Jonathan Gruber conveniently show that Maryland’s brokers are already providing the function of an exchange, so the transition to an exchange would be “much less onerous.” They seem to suggest that we could retain this middleman industry to fulfill the function of the exchange.
They are careful to say that they addressed this one issue only, and did not address the many other issues involved in reform. That’s important since Maryland’s private quasi-exchange has left 800,000 uninsured – over 14 percent of their population. Also Maryland citizens are facing the same outrageous increases in insurance premiums that citizens of other states face. Exchanges alone will not solve these problems.
The Gruber/Obama/Baucus approach to reform has been to take a group of individual policy proposals, such as the exchange, and patch them together in a comprehensive reform package. Each policy concept used has significant deficiencies. When you patch them all together, you still end up with a system that will leave tens of millions without insurance, with inadequate measures to stem health care inflation, with an expansion of underinsurance products, and with increasing financial hardship for America’s workforce and their families.
Private insurers are providing us with expensive, intrusive, and largely worthless services that take away our choices in health care. What good will it do to line them up in a private insurance exchange that adds only the imprimatur of the federal or state governments?
Using the most expensive and dysfunctional model of reform to build on the most expensive and dysfunctional health care system of all industrialized nations makes no sense whatsoever, especially when the goals of universality, comprehensiveness and affordability have been so mercilessly compromised.
The least expensive and most effective model would be to improve Medicare and include everyone. But Gruber’s microsimulation model is designed to assess private insurance solutions. It does not work for a single payer Medicare model.
Isn’t it time that we told Gruber to pick up his model and take a hike? Let’s bring in Steffie Woolhandler and David Himmelstein and take a closer look at their model. Of course the sponsors of this new report by Gruber and Carey would cringe at that prospect.

Sen. Russell Feingold on single payer

Health care on their minds

By Bryan Horwath
The Dunn County News
February 9, 2010

It was clear what topic was at the forefront of most people’s minds during a listening session with Sen. Russell Feingold (D-Wisconsin) at Boyceville High School on Saturday — health care, health care and more health care.

The topic of the day included concerns over health care costs, the so-called government takeover of health care, requests for universal health care, and horror stories from individuals and small business owners over what many described as a broken system.

After a couple of questions about the perceived lack of civility among politicians in Washington and the possibility of peak oil becoming a real concern, the health care questions started coming in droves.

Singling out single payer

One resident wanted to know why the single-payer system — popular in other industrialized nations — isn’t on the table any longer with regard to President Obama’s health care reform bill.

The health care bill passed in the U.S. Senate on a bitter partisan vote in December of last year, but is currently tied up in the House. Some in Washington think the bill is on the verge of falling apart because of strong opposition by Republicans and the recent election of Scott Brown to the U.S. Senate in Massachusetts.

“If you would have been to some of the other town meetings I’ve been to in the past year, you would know why (health care is fading),” Feingold said. “The opposition is unbelievable. The bill that we passed in the Senate not only doesn’t have single-payer, but there isn’t even a public option. People are calling it a government takeover of health care, but it’s just the opposite — it’s a big increase in private health care.”

The senator got applause from the mostly pro-Feingold crowd when he said he was in favor of a single-payer system, but said he has not seen enough support for single-payer in recent months.

“There wasn’t near enough support for single-payer at this point,” Feingold said. “I’m willing to see if this bill that we passed in the Senate works. If it doesn’t, however, then maybe we have to go back and look at single-payer. I’m suddenly hearing more talk about it, so if the current health care bill dies, we might eventually hear more about (single-payer).”

Reform is overdue

Feingold did say that the time for health care reform is long overdue.

“I’m worried about this,” he said. “I was in this job in the early 90s when the health care plan with the Clintons failed. Every year in the 90s when I went to town meetings like this, health care was the number one issue. I’ve been going to these types of sessions for 17 years, and by far the thing people ask for the most is universal health care.”

Feingold did say that the current health care bill would still be a victory for health insurance providers.

“When we had the public option die with our bill in the Senate, the champagne bottles were popping over at the insurance companies’ offices,” Feingold said. “My only hope is that people decide they don’t want to be dominated by the big insurance companies any more than they want to be by big government. You have to balance big government with big business so that people are protected, but that’s not where we’re headed.”

One resident said he was happy that Democrats have been attempting to pass a health care bill, but was dismayed that nothing seems to be getting done.

“I think the president is absolutely right,” Feingold said. “You can’t talk about the deficit or the economy without talking about health care. We’ll see what happens.”

http://www.dunnconnect.com/articles/2010/02/09/news/doc4b7193d6509f4816839479.txt

Comment: 

By Don McCanne, MD

Sen. Russell Feingold seems to be saying what we’ve been saying all along. If the Senate bill fails, then we’ll “hear more about (single-payer).” If this bill passes but doesn’t work (and it won’t), then “we have to go back and look at single-payer.”

One way or another, we eventually will have single payer or some form of social insurance very close to it. With increasing intolerance to rising costs which result in diminished access and impaired health outcomes, no other end result is possible.

Sen. Russell Feingold on single payer

Health care on their minds

By Bryan Horwath
The Dunn County News
February 9, 2010
It was clear what topic was at the forefront of most people’s minds during a listening session with Sen. Russell Feingold (D-Wisconsin) at Boyceville High School on Saturday — health care, health care and more health care.
The topic of the day included concerns over health care costs, the so-called government takeover of health care, requests for universal health care, and horror stories from individuals and small business owners over what many described as a broken system.
After a couple of questions about the perceived lack of civility among politicians in Washington and the possibility of peak oil becoming a real concern, the health care questions started coming in droves.
Singling out single payer
One resident wanted to know why the single-payer system — popular in other industrialized nations — isn’t on the table any longer with regard to President Obama’s health care reform bill.
The health care bill passed in the U.S. Senate on a bitter partisan vote in December of last year, but is currently tied up in the House. Some in Washington think the bill is on the verge of falling apart because of strong opposition by Republicans and the recent election of Scott Brown to the U.S. Senate in Massachusetts.
“If you would have been to some of the other town meetings I’ve been to in the past year, you would know why (health care is fading),” Feingold said. “The opposition is unbelievable. The bill that we passed in the Senate not only doesn’t have single-payer, but there isn’t even a public option. People are calling it a government takeover of health care, but it’s just the opposite — it’s a big increase in private health care.”
The senator got applause from the mostly pro-Feingold crowd when he said he was in favor of a single-payer system, but said he has not seen enough support for single-payer in recent months.
“There wasn’t near enough support for single-payer at this point,” Feingold said. “I’m willing to see if this bill that we passed in the Senate works. If it doesn’t, however, then maybe we have to go back and look at single-payer. I’m suddenly hearing more talk about it, so if the current health care bill dies, we might eventually hear more about (single-payer).”
Reform is overdue
Feingold did say that the time for health care reform is long overdue.
“I’m worried about this,” he said. “I was in this job in the early 90s when the health care plan with the Clintons failed. Every year in the 90s when I went to town meetings like this, health care was the number one issue. I’ve been going to these types of sessions for 17 years, and by far the thing people ask for the most is universal health care.”
Feingold did say that the current health care bill would still be a victory for health insurance providers.
“When we had the public option die with our bill in the Senate, the champagne bottles were popping over at the insurance companies’ offices,” Feingold said. “My only hope is that people decide they don’t want to be dominated by the big insurance companies any more than they want to be by big government. You have to balance big government with big business so that people are protected, but that’s not where we’re headed.”
One resident said he was happy that Democrats have been attempting to pass a health care bill, but was dismayed that nothing seems to be getting done.
“I think the president is absolutely right,” Feingold said. “You can’t talk about the deficit or the economy without talking about health care. We’ll see what happens.”
http://www.dunnconnect.com/articles/2010/02/09/news/doc4b7193d6509f4816839479.txt

Sen. Russell Feingold seems to be saying what we’ve been saying all along. If the Senate bill fails, then we’ll “hear more about (single-payer).” If this bill passes but doesn’t work (and it won’t), then “we have to go back and look at single-payer.”
One way or another, we eventually will have single payer or some form of social insurance very close to it. With increasing intolerance to rising costs which result in diminished access and impaired health outcomes, no other end result is possible.

When health care is a right: Right-wing claims that Britain's government-run health care system is a disaster are lies

By Helen Scott
Socialist Worker
September 2, 2009

WHILE I was recently visiting England, my country of birth, my 79-year-old mother fell ill. Worried by her worsening condition, my sister and I contacted her health center and were told to call the emergency number, 999, as her symptoms indicated heart failure.

Almost before we put the phone down, we heard the ambulance sirens, and within minutes, two efficient and friendly medics had moved our mother in to the ambulance, where they proceeded to take her vital statistics and make her comfortable.

When we reached the hospital, a bed with her name on it was ready, and a registered nurse performed a physical check-up and took an exhaustive medical history, asking my mother and me, as her next of kin, a myriad questions about her current and past health. Next came an examination from a doctor, a diagnosis and prescribed medications to stabilize her.

For almost two weeks now, she has received constant care from a team of remarkable orderlies, doctors and nurses. Not only the immediate condition, but also an unrelated chronic hip complaint, has been treated.

Having lived in the U.S. for over two decades, this encounter with Britain’s National Health Service (NHS) was in stark contrast to my usual experience with health care.

First, never did anyone mention health insurance or bills for service or drugs. Even though I currently have what is considered to be one of the best employer-based Blue Cross/Blue Shield health plans, trips to the hospital or doctor are always circumscribed by time-consuming referrals, paperwork and co-pays. A shocking one-third of all health care spending in the U.S. goes to such bureaucracy.

In the past, when I had an inferior health insurance plan, my diagnosis with multiple sclerosis–which was traumatic enough on its own–was made even worse by constant battles with a hostile insurance company, and then the steady accumulation of debt as I struggled to cover one-third of the costs of MRIs, consultations and treatment.

It is common knowledge that for the almost 50 million uninsured Americans today, getting sick can be an economic catastrophe. But this is also the case for many millions more of the “underinsured.”

In England, in contrast, no one referred to the cost of ambulance, X-rays, blood tests, doctors, hospital beds or medications. We were assured that my mother would not be discharged until she was medically fit to cope at home, and that they would provide an assessment and a care package–including such services as a visiting home aide, physical and occupational therapy, meals-on-wheels, etc.–to enable this.

The doctors didn’t restrict themselves to the particular health problem that led to the hospitalization, but rather were interested in the overall picture, including mental and social well-being–again, in stark contrast to the hyper-specialization that defines health care in the U.S.

SO IT was surreal to follow the right-wing propaganda against “socialized medicine” in the U.S. while experiencing the benefits of a government-run national health care system.

The lunatic right-wingers stacking town meetings and monopolizing the airwaves warn that a government-run system would mean death panels to decide whose Granny gets to live or die, inefficient and substandard care, no choice, long waits, cumbersome bureaucracy and soaring costs.

In reality, it is the U.S. for-profit system, dominated by the big pharmaceuticals and insurance companies, that produces the kind of horrors conjured by right-wingers.

Countless studies have confirmed that while the U.S. far outspends other industrialized nations that have national health plans, including the UK, it ranks at or near the bottom in terms of access, quality, equity and public health. While death panels do not exist here any more than they do in the UK, whether or not someone gets necessary treatment in the U.S. is determined by ability to pay, unlike in the UK where provision of medical care is universal.

The NHS is not perfect. One of my criticisms of Michael Moore’s otherwise brilliant critique of for-profit health care, Sicko, is that the documentary fails to mention the cuts and creeping privatization that have eroded health care in the UK and elsewhere. As underfunding has created long waiting lists for routine procedures, those with the money, or workplace-provided plans, have turned to the growing private health care system.

There is also some regional unevenness in health care provision (both within and between the separate health authorities in Wales, England, Scotland and Ireland). And fees have been introduced for some prescriptions and dental care.

But even so, the NHS provides health care that is vastly superior to, and far less expensive than, that in the U.S. This is why it has retained immense public support, to the degree that none of the major political parties dare to attack it, and neither Margaret Thatcher nor New Labour under Tony Blair succeeded in privatizing it.

The overwhelming majority of Britons believe that health care is a fundamental right that should be guaranteed by government, not something that corporations should control and make money from.

The right-wing slander in the U.S. produced an outpouring of support for the NHS in England, with local and national news outlets running stories about the difference in care in the two countries, and glowing personal testimony from countless individuals.

But there was also a lot of misinformation about the debate. Many people are under the illusion that the “Obama plan” offers universal government-provided health care, and that the American people “just aren’t ready” for such radical reform.

In reality, U.S. public opinion polls for years have consistently found that around two-thirds of Americans do favor a national health plan akin to Medicare, run by the government and supported with tax money. As David Sirota writes in a recent Salon.com article, Obama in the past publicly favored a single-payer system–for example, in a speech in 2003, at which time “ABC’s 2003 poll showed almost two-thirds of Americans desiring a single-payer system ‘run by the government and financed by taxpayers,’ just as CBS’s 2009 poll shows roughly the same percentage today,” Sirota wrote.

It is certainly true that support for Obama’s health care reform has dropped precipitously, but this has happened as the debate in Washington has moved further and further away from the proposal for a single-payer system–and as it has become increasingly evident that the pharmaceuticals and insurance industry are overrepresented in the Baucus committee. (For a good overview of this, see Chad Terhune and Keith Epstein’s August 6 Business Week cover story, “The Health Insurers Have Already Won.”)

We desperately need fundamental health care reform in this country, but for that to happen, the terms of the debate need a drastic reorientation. As Physicians for a National Health Program wrote in an open letter to the president:

Only single-payer, by redirecting the vast sums wasted annually on bureaucracy and paperwork back into care, can assure high-quality coverage for everyone with no net increase in U.S. health spending. Only single-payer can rein in costs. Lesser reforms, with or without a “public option,” won’t fix our broken system.

http://socialistworker.org/2009/09/02/when-health-care-is-a-right

When health care is a right: Right-wing claims that Britain’s government-run health care system is a disaster are lies

By Helen Scott
Socialist Worker
September 2, 2009

WHILE I was recently visiting England, my country of birth, my 79-year-old mother fell ill. Worried by her worsening condition, my sister and I contacted her health center and were told to call the emergency number, 999, as her symptoms indicated heart failure.

Almost before we put the phone down, we heard the ambulance sirens, and within minutes, two efficient and friendly medics had moved our mother in to the ambulance, where they proceeded to take her vital statistics and make her comfortable.

When we reached the hospital, a bed with her name on it was ready, and a registered nurse performed a physical check-up and took an exhaustive medical history, asking my mother and me, as her next of kin, a myriad questions about her current and past health. Next came an examination from a doctor, a diagnosis and prescribed medications to stabilize her.

For almost two weeks now, she has received constant care from a team of remarkable orderlies, doctors and nurses. Not only the immediate condition, but also an unrelated chronic hip complaint, has been treated.

Having lived in the U.S. for over two decades, this encounter with Britain’s National Health Service (NHS) was in stark contrast to my usual experience with health care.

First, never did anyone mention health insurance or bills for service or drugs. Even though I currently have what is considered to be one of the best employer-based Blue Cross/Blue Shield health plans, trips to the hospital or doctor are always circumscribed by time-consuming referrals, paperwork and co-pays. A shocking one-third of all health care spending in the U.S. goes to such bureaucracy.

In the past, when I had an inferior health insurance plan, my diagnosis with multiple sclerosis–which was traumatic enough on its own–was made even worse by constant battles with a hostile insurance company, and then the steady accumulation of debt as I struggled to cover one-third of the costs of MRIs, consultations and treatment.

It is common knowledge that for the almost 50 million uninsured Americans today, getting sick can be an economic catastrophe. But this is also the case for many millions more of the “underinsured.”

In England, in contrast, no one referred to the cost of ambulance, X-rays, blood tests, doctors, hospital beds or medications. We were assured that my mother would not be discharged until she was medically fit to cope at home, and that they would provide an assessment and a care package–including such services as a visiting home aide, physical and occupational therapy, meals-on-wheels, etc.–to enable this.

The doctors didn’t restrict themselves to the particular health problem that led to the hospitalization, but rather were interested in the overall picture, including mental and social well-being–again, in stark contrast to the hyper-specialization that defines health care in the U.S.

SO IT was surreal to follow the right-wing propaganda against “socialized medicine” in the U.S. while experiencing the benefits of a government-run national health care system.

The lunatic right-wingers stacking town meetings and monopolizing the airwaves warn that a government-run system would mean death panels to decide whose Granny gets to live or die, inefficient and substandard care, no choice, long waits, cumbersome bureaucracy and soaring costs.

In reality, it is the U.S. for-profit system, dominated by the big pharmaceuticals and insurance companies, that produces the kind of horrors conjured by right-wingers.

Countless studies have confirmed that while the U.S. far outspends other industrialized nations that have national health plans, including the UK, it ranks at or near the bottom in terms of access, quality, equity and public health. While death panels do not exist here any more than they do in the UK, whether or not someone gets necessary treatment in the U.S. is determined by ability to pay, unlike in the UK where provision of medical care is universal.

The NHS is not perfect. One of my criticisms of Michael Moore’s otherwise brilliant critique of for-profit health care, Sicko, is that the documentary fails to mention the cuts and creeping privatization that have eroded health care in the UK and elsewhere. As underfunding has created long waiting lists for routine procedures, those with the money, or workplace-provided plans, have turned to the growing private health care system.

There is also some regional unevenness in health care provision (both within and between the separate health authorities in Wales, England, Scotland and Ireland). And fees have been introduced for some prescriptions and dental care.

But even so, the NHS provides health care that is vastly superior to, and far less expensive than, that in the U.S. This is why it has retained immense public support, to the degree that none of the major political parties dare to attack it, and neither Margaret Thatcher nor New Labour under Tony Blair succeeded in privatizing it.

The overwhelming majority of Britons believe that health care is a fundamental right that should be guaranteed by government, not something that corporations should control and make money from.

The right-wing slander in the U.S. produced an outpouring of support for the NHS in England, with local and national news outlets running stories about the difference in care in the two countries, and glowing personal testimony from countless individuals.

But there was also a lot of misinformation about the debate. Many people are under the illusion that the “Obama plan” offers universal government-provided health care, and that the American people “just aren’t ready” for such radical reform.

In reality, U.S. public opinion polls for years have consistently found that around two-thirds of Americans do favor a national health plan akin to Medicare, run by the government and supported with tax money. As David Sirota writes in a recent Salon.com article, Obama in the past publicly favored a single-payer system–for example, in a speech in 2003, at which time “ABC’s 2003 poll showed almost two-thirds of Americans desiring a single-payer system ‘run by the government and financed by taxpayers,’ just as CBS’s 2009 poll shows roughly the same percentage today,” Sirota wrote.

It is certainly true that support for Obama’s health care reform has dropped precipitously, but this has happened as the debate in Washington has moved further and further away from the proposal for a single-payer system–and as it has become increasingly evident that the pharmaceuticals and insurance industry are overrepresented in the Baucus committee. (For a good overview of this, see Chad Terhune and Keith Epstein’s August 6 Business Week cover story, “The Health Insurers Have Already Won.”)

We desperately need fundamental health care reform in this country, but for that to happen, the terms of the debate need a drastic reorientation. As Physicians for a National Health Program wrote in an open letter to the president:

Only single-payer, by redirecting the vast sums wasted annually on bureaucracy and paperwork back into care, can assure high-quality coverage for everyone with no net increase in U.S. health spending. Only single-payer can rein in costs. Lesser reforms, with or without a “public option,” won’t fix our broken system.

http://socialistworker.org/2009/09/02/when-health-care-is-a-right

Nurses Blast 39% Anthem Blue Cross Rate Hike

“Stronger Medicine Needed to End Insurance Abuses”

From National Nurses United
Press Release

For Immediate Release
February 9, 2010

Contact: Charles Idelson, 510-273-2246, Shum Preston, 510-273-2276

The nation’s largest union and professional organization of registered nurses, National Nurses United, today joined the national condemnation of Anthem Blue Cross for imposing rate hikes of up to 39 percent for Californians with individual policies, but said the outrage must “go beyond words to action to end insurance abuses once and for all.”

“Anthem’s disgraceful behavior may be particularly offensive, but it is not out of character for an industry engages systemically in price gouging and denial of care,” said NNU Co-president Deborah Burger, RN.

“Condemnation is well deserved, but not enough. We need stronger medicine to cure what ails our healthcare system by removing the ability of insurance companies to indiscriminately price people out of access to care, and routinely deny claims they don’t want to pay.

“The best way to achieve that goal would be expanding Medicare to cover everyone, which would retain our private delivery system, more effectively control healthcare costs, guarantee choice and access to care for everyone, and put patients, their families, and their doctors in charge of their care, not insurance bureaucrats,” Burger said.

For companies like Anthem skyrocketing price hikes and denials are highly profitable. Anthem’s parent corporation, Wellpoint, recorded record 2009 profits of $4.7 billion, nearly double its 2008 profits, with a five year total of $16.1 billion.  It’s top five executives were paid more than $20 million in 2008. And during the debate on healthcare reform in California in 2007, it was reported that in the individual insurance market companies spend as little as 50% of premiums on direct healthcare.

While Congress remains stalled on healthcare reform, some states are moving ahead. Burger noted, for example, growing support for single payer bills in California, where SB 810 recently passed the State Senate, and Pennsylvania, where the Pennsylvania Democratic State Committee last weekend unanimously endorsed two single payer bills, HB 1660 and SB 400.

Anthem’s latest rate hike is expected to affect some 800,000 Californians.

Anthem was also one of six major California insurance companies which, NNU research uncovered last fall, deny more than one-fifth of all claims. For the first nine months of 2009, Anthem’s denial rate was 27 percent.  One such patient is Kim Kutcher of Dana Point, Calif. In 2008, six days before Kutcher was scheduled to have special back surgery, Anthem Blue Cross denied authorization for the procedure as “investigational” even though the lumbar artificial disc she was to receive had FDA approval. At the time of denial, which she calls “insurance hell,” Kutcher had “already gone through pre-op testing, donated a unit of blood, had appointments with four physicians.” Kutcher paid $60,000 out of pocket for the operation and is still fighting Blue Cross.

Why does Anthem Blue Cross need a 39% premium increase?

Anthem Blue Cross dramatically raising rates for Californians with individual health policies

By Duke Helfand
Los Angeles Times
February 4, 2010

California’s largest for-profit health insurer is moving to dramatically raise rates for customers with individual policies, setting off a furor among policyholders and prompting state insurance regulators to investigate.

Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage — people not covered by group rates — that its prices will go up March 1 and may be adjusted “more frequently” than its typical yearly increases.

The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year.

Insurers are free to cherry-pick the healthiest customers in the lightly regulated individual market. They can raise rates at any time as long as they notify the state Department of Insurance and prove that they are spending at least 70% of premiums on medical care.

Many policyholders say the rate hikes are the largest they can remember, and they fear that subsequent premium growth will narrow their options — leaving them to buy policies with higher deductibles and less coverage or putting health insurance out of reach altogether.

The insurer said it had a team of workers to help customers balance costs and insurance.

“Anthem offers a variety of health benefit plans,” the company said, “and we are dedicated to working with our members to find health coverage plans that are the most appropriate and affordable for their needs.”

http://articles.latimes.com/2010/feb/04/business/la-fi-insure-anthem5-2010feb05

And…

Letter from Kathleen Sebelius, Secretary of Health and Human Services, to Leslie Margolin, President, Anthem Blue Cross

U.S. Department of Health & Human Services
February 8, 2010

Excerpt:

One of the biggest pressures facing families, businesses and governments at every level are skyrocketing health insurance costs.  With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39 percent. These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.

Your company’s strong financial position makes these rate increases even more difficult to understand. As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.

http://www.hhs.gov/news/press/2010pres/02/20100208c.html

And…

‘A Wasted Opportunity’

By Joseph Rago
Wall Street Journal
February 7, 2010

Mrs. (Angela) Braly is the CEO and president of WellPoint, the largest U.S. commercial health insurer by membership. Her company’s affiliated health plans in 14 states cover 34 million people—or roughly one out of nine Americans. It contracts with 82% of the nation’s primary-care physicians, 84% of specialists, and 94% of hospitals. That scale lands her on the most-wanted list in President Obama’s Washington.

The tragedy, as she sees it, is what “a wasted opportunity” it all turned out to be. “Health-care reform” soon became “health-insurance reform” exclusively. “It was a pivot that was—unfortunate,” she says, “because it is not going to solve the longer-term problem.”

The solution is to “reintroduce the consumer to the health-care equation,” and on that front, she believes, insurers “are actually the part of the health-care delivery system that is there to create the value.” Mrs. Braly thinks patients will make more cost-conscious decisions if they have the incentives and the tools—namely, the information about cost and quality that is the basis of any ordinary market.

Mrs. Braly concedes that some people with pre-existing conditions can find it difficult to find affordable coverage, especially if they lose their job, get divorced, move, etc. “It’s when people have no option that we’re really in trouble and need to find a solution,” she says. But a better alternative to central insurance planning is public-private partnerships to create insurance pools for those with high risks. “That was a great idea that got pushed aside, and I think we need to revisit that concept.”

http://online.wsj.com/article/SB10001424052748704259304575043861057904360.html?mod=rss_opinion_main

Comment: 

By Don McCanne, MD

WellPoint’s California subsidiary, Anthem Blue Cross, has provoked appropriate outrage in response to its announcement of premium increases as high as 39 percent. Why would they risk creating this potential public relations nightmare when Congress is considering major increases in regulatory oversight of their industry?

Keep in mind that Anthem Blue Cross has been very successful in keeping its individual insurance products competitive by selling only to the healthy by subjecting applicants to medical underwriting. With the unabated rise in health care costs, the upward pressure on premiums has been moderated by introducing numerous innovations, especially increased cost sharing.

Currently the most important tool they have to limit their exposure to health care costs is to switch their clients to plans with high deductibles  (often $5000 or more) and high coinsurance (typically 40% of all allowed costs over the deductible). You can confirm these numbers at eHealthInsurance.com.

By jacking premiums up to intolerable levels for low deductible and low coinsurance plans, they force their clients to choose these high cost sharing plans. Once enrollment drops in the low cost sharing plans, high cost individuals remain, driving premiums up even further resulting in the death spiral. At that time they can withdraw the low deductible plans from the market and require that their clients choose either the high cost sharing plans or drop their coverage altogether.

Another factor that has driven premiums up now is the high unemployment rate that has caused many individuals to drop their coverage, especially those who are relatively healthy, leaving in the plans those who try to hang on because of their greater health care needs. Of course, that adds to the death spiral.

Angela Braly, president, chairman, and CEO of WellPoint, supports greater patient cost sharing to “reintroduce the consumer to the health-care equation.” Patients will buy less health care, no matter how beneficial, when they are using their own money. That also happens to work out well for WellPoint since they will spend less on health care.

Angela Brady also wants those who need health care to be covered by public high-risk pools, while the healthy are covered by her private plans. That too allows WellPoint to spend less on health care, while we taxpayers foot the larger bills.

It would seem that the outrageous premium increases by Anthem Blue Cross would cause the administration to rethink a strategy of reform based on private insurance plans. But no. Instead HHS Secretary Kathleen Sebelius responds with a tisk, tisk, as Congress and the administration continue to move forward with locking us into this perverse system.
We need to respond with more than a tisk, tisk. We need to show up by the millions on February 25 (President Obama’s televised bipartisan health session) and demand the enactment of an improved Medicare for all of us.