Tears for Strangers »« A Little More Tarnish for the Bush Legacy

But No, Really, Private’s Better than Public!

Because, you know, private insurers take such better care of us than the government ever could!

The health insurance industry maximizes their profits by delivering as little care as they can legally get away with, or for that matter, illegally.
Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released yesterday by the staff of the Senate Commerce Committee.

The report was part of a multi-pronged assault on the credibility of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It came at a time when Rockefeller, President Obama and others are seeking to offer a public alternative to private health plans as part of broad health-care reform legislation. Health insurers are doing everything they can to block the public option.

At a committee hearing yesterday, three health-care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell “junk” policies that do not cover needed care. Rockefeller said he was exploring “why consumers get such a raw deal from their insurance companies.”

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don’t trust the insurers.

Wendell Potter is the name of the star witness, a former VP for corporate communications at insurance giant Cigna. His testimony was devastating, as he offered a step-by-step tour into how the insurance industry works to increase their profits. This is the system that Republicans and conservative Democrats want to hold a monopoly over your health care, in a forced market where you have to sign up with them.

What drove Potter from the health insurance business was, well, the health insurance business. The industry, Potter says, is driven by “two key figures: earnings per share and the medical-loss ratio, or medical-benefit ratio, as the industry now terms it. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits.”

Think about that term for a moment: The industry literally has a term for how much money it “loses” paying for health care.

The best way to drive down “medical-loss,” explains Potter, is to stop insuring unhealthy people. You won’t, after all, have to spend very much of a healthy person’s dollar on medical care because he or she won’t need much medical care. And the insurance industry accomplishes this through two main policies. “One is policy rescission,” says Potter. “They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment.” [...]

Potter also emphasized the practice known as “purging.” This is where insurers rid themselves of unprofitable accounts by slapping them with “intentionally unrealistic rate increases.” One famous example came when Cigna decided to drive the Entertainment Industry Group Insurance Trust in California and New Jersey off of its books. It hit them with a rate increase that would have left some family plans costing more than $44,000 a year, and it gave them three months to come up with the cash.

The insurers simply follow the profit motive. Under the current system, there is no profit in offering people care, only denying them it. And so competition in the marketplace, or more to the point competition on Wall Street to increase share price (because most insurance markets in this country are limited), depends on coming up with new and exciting ways to either deny care or off-load costs onto customers.

Tell you what, Cons and Con-like Dems. We’ll be happy to leave a public option off the table – as long as health care reform includes a lawyer, prosecutor and prison provided gratis for every American. I wouldn’t mind private insurance a bit as long as I could submit their bullshit paperwork to my lawyer, have him refer them for prosecution when they fuck me over, and see them stuffed in prison afterward.

No? Public option it is, then.

Someone tell me again why our infinitely intelligent overlords took single-payer off the table…