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Monday, March 08, 2010

So It's a Crisis... What's the Big Hurry?

Last week, I posted a link to a Mike Fiore cartoon at my short post blog, Griper News. Fiore depicts two men plummeting through the sky. Both wear parachutes, but they argue about whether to use them. One argues that the parachutes are flawed and what they need to do is start over and design some sort of "hydrogen jetpack." Finally, the debate goes on too long and it's falling guys meet ground.

The moral of this story should be obvious. It isn't some whimsical notion President Obama had to reform what we've been calling our system of healthcare delivery. It's reaction to a real world problem that's happening right now. We have a healthcare crisis, it's happening now, and it's only getting worse. Republicans are fond of pointing out that the healthcare industry represents 1/6 of our economy. If we do nothing, it'll become 1/5. Insurance companies are raising rates at an alarming clip and there seems to be no end in sight. I don't feel I can say often enough that this is happening right now. And the opponents of reform are saying we should start over; in other words, wait. Meanwhile, the ground is getting closer and closer.

This February, insurance company whistleblower Wendell Potter wrote about increases from the industry.

I pointed out on Countdown that WellPoint's planned increase in Maine was so high the state's insurance commissioner cut the planned increase in half, prompting WellPoint to sue the state. That case is still pending. And I noted that Blue Cross and Blue Shield of Nebraska announced plans last year to increase rates on some of its plans by more than 35 percent. It won't take a lot of investigating for members of Congress to see that these outrageous rate increases are common, and that the WellPoint increase in California is nothing more than business as usual for this industry, which values profits far more than the health and well-being of its customers. If everyone who has received a rate increase notice lets their members of Congress know about it, it just might give lawmakers the motivation they need to get reform passed.

WellPoint had raised premiums by as much as 39%. CIGNA customers reported increases of up to 47%. And what extra value do you get for that increase? You're kidding, right? You get to keep your insurance. Now shut up and eat your status quo.

I think it's important to point out here that insurance companies don't actually do anything other than handle money. They don't provide healthcare. What they do is create a risk pool and pay out from that pool. And what's left over they keep. That, in a nutshell, is how the whole thing works. They are middlemen and they are unnecessary. They create absolutely nothing of value. They just handle money. Their job isn't to provide coverage, their job is to make sure that chunk of leftover money is as big as possible.

And bad press? Who cares? They've got you over a barrel. You can't just go to another insurer and it's not the best idea to be uninsured. If they want to screw you, they can screw you. And there's nothing you can do about it. Sure, some customers will drop because they just plain can't afford it anymore, but the rate increases figure that in.

Watching their competitors get hauled in front of a congressional committee to investigate the rate increases has done nothing. They're getting paid enough to sit through a grilling. What do they care? A few uncomfortable hours and then it's back to a very comfortable life. So other companies do the same thing.

Huffington Post:

The market concentration for health insurance is so monopolized in some areas that insurance companies are willing to raise prices and lose customers in an effort to improve their bottom line, a leading insurance broker told Wall Street analysts on Wednesday.

In a conference call organized by Goldman Sachs Global Investment Research, Steve Lewis, a highly regarded broker at the world's third largest insurance broker, Willis, painted a picture of the health insurance market in which employers seem likely to be priced out of coverage.

Noting that "price competition" between insurers was "down from a year ago," Lewis relayed that "incumbent carriers seem more willing than ever to walk away from existing business."

So the whole thing's getting more expensive and is covering fewer people. "What does it mean when the insurance companies 'walk away?' It means more and more American families forced to choose between the mortgage and health care bills," writes White House Communications Director Dan Pfeiffer. "It means being a hospital visit away from certain bankruptcy. And [for business owners] it means not being able to do the right thing for their employees."

This is all happening now. The ground is zooming up beneath us. And the Republican response to the crisis is "what's the big rush?"


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