Heath Care Reform Opens Fertile New Opportunities to Plunder Both the Rich and Poor
When it comes to the policies of health insurance carriers, integrity is at a premium, common sense has lapsed and greed is running rampant. With no “socially redeeming value,” health insurance companies have become the pornography of the business world and, if not totally banned, should certainly be tightly controlled. It may be difficult to believe, but health insurance executives are even more despicable than bankers—if that’s possible.
For the past 60 or so years, health insurance companies have been safe, secure, comfortable and content in their own little protected cocoon; free to collude against the best interests of everyone and create safe financial havens themselves. And they have done so with quiet, but unabashed glee.
Is it any wonder that these consumer predators have shown that they will charge any price, bear any burden, meet any hardship, support any friend and oppose any foe, in order to inoculate their industry against competition and meaningful overview, all to assure the survival and the success of their kind?
Health Insurers are a Class Unto Themselves
The health insurance industry is very unique in what we would like to believe is a “free market economy.” To function effectively, a free market economy requires transparency, openness, consumer options, real competition and effective regulation to assure a level playing field. These are all things that are lacking in the health insurance industry.
Naturally, these insurance companies will argue that they are in “a very competitive environment.” In a sense they are, but in truth they compete with each other – not against each other – in an effort to isolate themselves from unwanted competition and effective regulatory control.
The health care industry has a polished and effective PR machine that propagates the familiar “woe-is-me” style of defense against regulatory and competitive incursions into their world. They plead poverty as they annually approach regulators in a – usually successful – effort to ratchet up premiums paid by the policyholder. With few competitive options available, the hapless consumer is faced with a painful dilemma: either cough up the higher premiums or risk life and limb without coverage. Operating in such a preen world, the companies have been free to ration coverage to only those they deem capable of paying the increased premiums and, ipso facto, least likely to ever collect on the benefits of the policy. And even when they have coverage, they must battle the companies to receive the benefits they have justly paid for.
And that’s when you have health insurance. Some 50 million Americans are not able to secure it, under any conditions. And that’s a pox against low- and moderate-income Americans who reap the scourge of the insurance companies’ greed.
The Ugly Truth about State Insurance Regulators
Health care executives will argue that the consumer is already protected because of an effective state regulatory system that controls both premiums charged and policy benefits, but this is an well-orchestrated chimera designed only to confuse the consumer, preserve the status quo and shield the companies from what they perceive to be harm.
State regulators may be well-intentioned in their efforts, but they lack the experience and resources to effectively regulate the companies. Yes, state regulators do “approve” the premiums to be charged, but they must – get this – rely only on information provided to them by the companies. Is it any wonder that the old saying, “figures don’t lie but liars do figure” came out of health insurance companies dealings with regulators?
It is also true that state regulators both mandate and approve policy benefits, but a closer examination of this authority will expose the truth that these regulations are, in effect, designed to protect the existing companies against the incursion of competition, diversity and innovation. (As mentioned above, state regulators simply don’t have the experience or resources to analyze and understand new types of benefits so they stick to what is known and has been approved in the past. This favors existing companies and thwarts new competition.)
And still the companies complain they can barely eke out a profit on the approved subsistence levels. Funny though, despite how difficult the companies claim it is to survive, whenever there is a serious effort to introduce transparency, diversity, consumer options and real competition into health care, the companies rise up as one in a concerted – often dishonest – effort to euthanize the changes.
A Case in Point
When the Obama administration made health care reform a high priority, a posse of health insurance companies made it their high priority to defeat or dilute the reforms. The health care industry’s attack on health care reform was multi-pronged. The industry poured millions and millions of dollars into a lobbying and negative advertising effort in an effort to defeat the reform. They supplemented their millions with a campaign of fear mongering, i.e. “death panels,” arrogant deceit and sophisticated, confusing half-truths. It that was not enough, the health insurance industry demonstrated its copious lack of integrity by offering to “get under the tent” to “help” the Obama effort at reform. It proved to be nothing more than a thinly disguised effort to infiltrate in order to destroy any hope of real reform, even though the voluminous reform bill had to be carted to legislative chambers in a wheelbarrow.
In reality, only the health insurance companies were the big winners when health care reform was passed. The basic system of health care produced little fundamental change and health insurance companies were presented with a potential bonanza. No real competition was introduced that would induce the companies to be more responsive to consumer needs, high risks were removed from the market and mandates for individuals and companies to purchase coverage – available only from health companies – created a fertile new market for the companies.
And how have the health insurance companies responded to this situation? Well, they behaved like they always have and in a manner they feel is their inalienable right. Rather than slinking off to their board rooms to pat each other on the back for another victory, once again they have let loose an epidemic of unbridled greed.
In a lead article in The Wall Street Journal (September 8, 2010) titled “Insurers Pin Hikes on Law,” it was revealed that health insurance companies are requesting rate increases of as much as 20 percent and attributed most of the increase to new benefit mandates in the health care reform law. Talk about unmitigated gall! It just shows that health insurance companies will go to any length to continue to inflate their profits at the expense of the consumer.
Of course, the Obama administration is outraged by this duplicity of the health insurance companies. In a follow-up article in The Journal (September 10, 2010), “U.S. Rebukes Health Insurers,” Kathleen Sebelius, secretary of Health and Human Services was quoted in a letter to the health industry’s chief lobbyist as writing, “There will be zero tolerance for this type of misinformation and unjustified rate increases. We will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide the consumer with basic protections.”
That is all well and good, but the reality is that under present law and regulatory structure neither Secretary Sebelius nor anyone else in the federal government can do anything to block these increases. Ms. Sebelius suggested that as a result of these increases the government might block the offending companies from a new marketplace for insurance coverage. But, what good will that do since there are no other options for the consumer to purchase coverage, except from these companies?
Once again the health insurance companies have the power and willingness to simply thumb their noses at the consumer. And, they are more than happy to do so.
And the Moral of the Story …
When you are faced with a system that is fundamentally flawed – as the American health care system is – the problem cannot be fixed by tinkering and adjusting. You have to get to the real problem and fix it. The Obama administration’s desire was to get to the core of the problem – transparency, options, competition and innovation – but were once again blocked from doing so by the big money and overwhelming power of the health insurance industry.
The only way to fix the health care system in America is to fundamentally change it. Insurance companies should be held accountable and made responsible to the needs of the consumer. Start by giving the consumer honest and real options and creating true competition in the industry. Yes, this means that even if the competition has to come from the government – so be it. Insurance companies have proven over and over again that the one thing they resist and fear is real competition. Give them a little real competition and you will be amazed just how efficient and productive the companies can be. But until such competition is created, the consumer will continue to be at the mercy of merciless health insurance companies.