Private health insurers have contributed nothing of value to the American healthcare system

SUMMARY: Los Angeles Times…”The most perplexing aspect of our current debate over healthcare and health coverage is the notion that Americans love their health insurance companies. The truth is that private health insurers have contributed nothing of value to the American healthcare system. Instead, they have raised costs and created an entitled class of administrators and executives who are fighting for their livelihoods, using customers’ premium dollars to do so.” Ouch

“Health insurers have been successful at two things: making money and getting the American public to believe they’re essential,” says Wendell Potter. He should know, since he spent decades as a corporate communications executive in the industry, including more than 10 years at Cigna.

Insurers claim to promote “consumer choice,” simplify “the healthcare experience for individuals and families,” address “the burden of chronic disease” and harness “data and technology to drive quality, efficiency, and consumer satisfaction.”

They’ve achieved none of these goals. The increasingly prevalent mode of health coverage in the group and individual markets is the narrow network, which shrinks the roster of doctors and hospitals available to enrollees without heavy surcharges. The hoops that customers and providers often must jump through to get claims paid impose costly complexity on the system, not simplicity. Programs to manage chronic diseases remain rare, and the real threat to patients with those conditions was lack of access to insurance (until the Affordable Care Act made such exclusion illegal).

Aetna claimed this summer that it was pulling out of all but four of the 15 states where it was providing Obamacare individual insurance because of a business decision — it was simply losing too much money on the Obamacare exchanges.

In reality, Americans don’t like their private health insurance so much as blindly tolerate it. That’s because the vast majority of Americans don’t have a complex interaction with the healthcare system in any given year, and most never will. As we’ve reported before, 1% of patients account for more than one-fifth of all medical spending and 10% account for two-thirds. Fifty percent of patients account for only 3% of all spending.

The worst maladies of the American healthcare system are related to corporate profits: The competition among insurance companies to avoid the sickest customers and extract the most money from the rest, and the rise of for-profit healthcare providers.

Deductibles and premiums eating raises

In the last 12 years, annual deductibles in job-based health plans have nearly quadrupled and now average more than $1,300. Yet Americans’ savings are not keeping pace, data show. And more than four in 10 workers enrolled in a high-deductible plan report they don’t have enough savings to cover the deductible.

The average deductible for a single worker with a job-based insurance plan in 2006 was just $379, adjusted for inflation, according to an annual employer survey that KFF has conducted for more than two decades. By 2018, that figure had more than tripled to $1,350. Four in 10 U.S. workers have at least a $1,500 deductible — the threshold the poll used for high-deductible coverage for individuals.

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