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Insurance Companies Make Case for Public Option

Tuesday 13 October 2009

by: Scott Galindez, t r u t h o u t | Op-Ed

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(Photo Illustration: Jared Rodriguez / t r u t h o u t, Adapted From: ribernica / flickr)

    The insurance industry is back in the game, fighting against the health care reform proposals emerging from Congress. They are playing their final card, threatening to raise everyone's premiums if the current bills prevail. They might actually be right about at least one committee's plan, but are dead wrong about the others. In fact, they are making a strong case for why the final version needs a strong public option.

    Senate Finance Committee Bill Could Raise Costs

    The legislation being voted on today in the Senate Finance Committee is flawed. It mandates coverage for pre-existing conditions, caps out of pocket expenses, and does other things that will raise the costs for insurance companies to do business. The reforms are needed, but what is lacking is a strong public option. Without competition, insurance companies will pass the increased costs back to the consumer. But, with strong competition, they will be forced to cut into their profit margin. The solution is simple, when the two competing bills in the Senate are merged, or during the amendment process, the final Senate bill should have a strong public option.

    Price Waterhouse Cooper's Report a Threat

    The health insurance industry report prepared by Price Waterhouse Cooper on the day before the Senate Finance Committee vote claims that everyone's premiums will go up as the result of the legislation now being considered. It should be pointed out that the industry was silent before the fines were lowered for people who opt to not buy insurance.

    Even if they have some validity when it comes to the Senate Finance Committee's version of health care reform, which would rely on the not-for-profit co-ops not providing competition, the timing of the health insurance industry report is nothing short of a threat. They are saying to the American people that if you want better coverage for all Americans you are going to have to pay for it. They are saying that they will not reform the way they do business. They will continue to put profit ahead of the health of the nation.

    Instead of threatening the American people, the health insurance industry needs internal reform. They need to stop focusing on how to maximize profit and start focusing on the health of their clients. What would happen if the fire department started focusing on making a profit? What if before a fire truck was dispatched to your home they needed approval from your insurance company? What if the insurance company said no, the cost of putting out the fire would be too much.

    Blue Cross and other insurance companies are entrusted with making decisions about our health. They should not be motivated by profit. A strong government-run option, similar to Medicare for all, would take profit out of life and death decisions. Gone will be the bonuses for denying coverage; gone will be promotions for saving the company money by rejecting needed treatments.

    Report Should Unify Reform Supporters

    Instead of ratcheting up fear of reform, let us hope that the American people see through this report from the insurance industry. That being said, I have been warning all along that a reform package that doesn't include a strong public option will be a disaster. This threat from the insurance companies only reinforces that fear. Instead of retreating on reform, the American people need to demand that a strong public option is included in whatever reform emerges, to prevent the Insurance companies from carrying through on the threat they are making.

  

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Scott Galindez is a Senior Editor at Truthout.

Comments

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Scott Galindez comes close

 Tue, 10/13/2009 - 16:10 β€” Steve Blank (not verified)
Scott Galindez comes close but misses the big picture: the insurance industry's argument demonstrates demonstrates that profit at the expense of universal healthcare is their only motive. We must stop the charade of "negotiating" with this industry and instead cut it loose. Only with a single payer, medicare for all system will we create a pool that includes every American and equitably spread the cost of care through progressive taxation.

There is something in the

 Tue, 10/13/2009 - 16:31 β€” Santa Barbara Psychologist (not verified)
There is something in the insurance industry's threat that is easily missed: They will also jack up rates if no bill of any kind is ever passed. I know this because they have been doing so for years and there is nothing being done (even in the proposed bills) to stop them. So why would they stop? Thus, this is more than a threat: It's a trick. A common trick at that, used by every con artists an crooked politician in the world. The trick is to make a conditional prediction so that you can later attribute causality to the condition. Thus, they can later attribute the their decisions to raise rates to the passage of the bill, much as I can state that if this bill passes, then temperatures will drop over the next few months and energy prices will rise. That's right, passage of this bill will cause the winter of 2009-2010. A public option is necessary to the success of health care cot reform (that's what it really should be called). But we started off the discourse by accepting the false premise that our casino-based method of paying healthcare cost as a kind of jackpot for the lucky few was superior to anything we could do collectively through the instrument of a democratically elected government. As a society we are so stupid as to have been convinced that corporations have our best interests at heart and our elected representatives are dopes who can't do anything right. To the extent that is true, it was always a self-fulfilling prophesy. There is still hope, but not if this bill goes through as planned.

Single payer. Let's use

 Tue, 10/13/2009 - 16:51 β€” Anonymous (not verified)
Single payer. Let's use Russel Mokhiber's definition: * Right now we have many hundreds of payers. * They are called insurance corporations. * We would get rid of them. * And replace them with a single payer. * Instead of paying premiums to private for profit insurance companies like Aetna, CIGNA, and Wellpoint, we would all pool our money into one public insurance pool. * We would be paying the same or less than we are paying now. * Save $400 billion a year in administrative overhead, waste and profits. * Use that money to insure everyone -- cradle to grave. * You get an insurance card. * And it gets you into to see any doctor or any hospital. * Anywhere in the country. * No bills. No co-pays. No deductibles. * No more bankruptcies from medical bills. * No more 60 Americans dead a day due to lack of health insurance (according to an Institute of Medicine report.) * As Dr. Marcia Angell, former editor of the New England Journal of Medicine puts it, single payer is not only the best health care reform, it's the only health care reform that will both control costs and cover everyone. * Single payer. * Everybody in. * Nobody out.

So the insurance monopolies

 Tue, 10/13/2009 - 17:37 β€” Jruss (not verified)
So the insurance monopolies don't like the proposed legislation. I say it's past time to shut these bullies down. Nothing could be more anti-American than these cartels that enrich themselves at the public's expense. And what an expense! Thousands die each year due to lack of insurance coverage. And what enrichment! Ron Williams, CEO, Aetna, total annual compensation: $24+ million; H. Edward Hanway, CEO, Cigna, total annual compensation: $12+ million; and Karen Ignagni, chief spokesperson for the insurance lobbying group AHIP, total annual compensation: $1.58 mil. Is this who we are as a nation? Obscene accumulation of wealth for one group, mass dieoff for another. These numbers remind one of drug cartels in Mexico.

Do we really need insurance

 Tue, 10/13/2009 - 19:54 β€” Anonymous (not verified)
Do we really need insurance companies at all? Why? Just get rid of them. As a small business owner my husband and I pay $70,000 a year for 6 people (1 family, 1 couple and 4 singles), for health insurance that does not even cover dental, or eyeglasses. Most doctors in NYC will not even take Oxford. And most Insurance companies don't offer insurance for New Yorkers at all! It's very very expensive catastrophic coverage, which we are forced to keep, because god forbid something catastrophic should happen! Yet my own 25 year old son has no coverage (he searched for something affordable in his home state of CA), and none of my young nieces are covered either for the same reason. As the previous poster said, "Single payer. EVERYBODY in. Nobody out."

The American medical

 Tue, 10/13/2009 - 22:12 β€” Donald Hallock (not verified)
The American medical insurance industry commonly denies coverage based on such factors as an infant being 'too fat,' the 'pre-existing condition' of spousal abuse, a liver transplant termed 'too experimental,' or simply becoming 'too sick.' It heedlessly renders many millions uninsured through its increasingly unaffordable premium fees. Now the insurance giants have stated that, if congress passes health care reform, insurance rates will rise drastically. I offer my paraphrase: "If reform is passed we will intentionally spike our rates upward. We are the near monopolies and corporate 'death panels' by whose decree tens of thousands of Americans die every year due to our service refusals, and spiraling policy rates. If you dare put a kink in our gravy train, we will kill more of you next year. We're powerful, we're pernicious, and we are vicious. We're uninterested in your health - we are interested in your money." The industry calls this 'lobbying.' It's not; it is mass terroristic threatening. Add this to the corporations who take out life insurance policies on their employees (obviously looking toward their demise), and all the rest of the business-sharks circling the ship of state, and ask, America, who, in God's name, have we become?

The insurance industry is

 Tue, 10/13/2009 - 23:48 β€” aim (not verified)
The insurance industry is apparently the Mafia! They are extorting at this point. Nice blackmailing!

As I read the comments, I

 Wed, 10/14/2009 - 02:54 β€” Anonymous (not verified)
As I read the comments, I was thinking that we,the people have allowed the Mafia to take over our country. A shame and a pox on all of our heads for such a thing to occur. We moan about the 3000+ that died on 9/11 and even attack countries that had Nothing to do with it-- and yet we have over 25,000 dying every year merely from lack of medical care...while the Insurance Mafia holds us all hostage. People, it is Time to storm Congress and Demand that we have what civilized countries already have..single payer. Close the bandits down. They have no regard for anything but their bottom line. One other thing, how are people going to pay for Health Care when we do not even have a job..or a roof over our heads and we have mouths to feed? Need I say more ? It is time our President started doing more than walking softly. He needs to carry a Cannon and use it on these strong-arming Mafia Insurance Companies, for real.Congress needs to be reminded that they are not gods and can be brought down from their perches.

Health insurance is an

 Wed, 10/14/2009 - 04:15 β€” Anonymous (not verified)
Health insurance is an oxymoron

We need to oust the

 Wed, 10/14/2009 - 14:48 β€” Anonymous (not verified)
We need to oust the insurance companies from health care completely. They were never meant to be involved with medicine. The purposes of insurance and health care are diametrically opposed. The purpose of insurance is to make a profit. That is not the purpose of medicine, which is to heal the sick and promote wellness. We must call our public officials and tell them that we won't vote for them if they accept bribes from insurance. If we kick the insurance companies out of health care, they will have to confine themselves to insuring property and people's lives, which is all they were intended to do in the first place.

I came to the same

 Wed, 10/14/2009 - 16:32 β€” EndTheEcho (not verified)
I came to the same conclusion as the author, while not as good a writer, I went into a little more details. As one comment pointed out, the Senate bill increases the premiums from 50% (status quo) to 71 or 73% (individual or family plan) by 2016. Yet the Lewin Group, owned by United Health Care, reported in April that public option that pays Medicare rates, would lower premiums by 30%. You can read all of it on my blog at http://endtheecho.wordpress.com/2009/10/13/doesnt-the-new-health-insurance-report-make-the-case-for-public-option/

In my state, Blue Cross has

 Wed, 10/14/2009 - 22:02 β€” Anonymous (not verified)
In my state, Blue Cross has already notified businesses that they will be increasing insurance rates for next year by 17%, so - where is the news? As others have said, they are only telling us what we already knew. They raise rates every year. The only thing different is the amount. Insurance companies have gained monopoly power, and - as all monopolies do - they abuse it. Corruption is intrinsic to monopolies. This is what Adam Smith was saying when he wrote The Wealth of Nations. The monopoly of his day was the crown. Isn't it interesting that our corporations have gained the power that once belonged to kings? They have gained the type of power that created resistance and lead to the American Revolution. Alas, you cannot text message or email a revolution - not even a velvet one.

Lesson number one in Social

 Wed, 10/14/2009 - 22:24 β€” brooke (not verified)
Lesson number one in Social Responsibility in Corporate Society class.. ..Corporations make money for their stockholders. . .PERIOD. Grow a brain. Insurance industry capos don't exist to be socially and morally responsible. That is the nature of corporate responsibility in a capitalist economy. If you want moral and social responsibility you have to turn to a governing body whose responsibility isn't to make a return on an investment for the shareholder. Single payer, an American Plan, is the only socially responsible choice for health care.