Florida Health Insurance Topic:
"Private Health Care"

PRIVATE HEALTH RIPOFF

April 10, 2009 -- False assumptions that drive the current U.S. health care reform debate are often expressed as common buzzwords:

1) Choice - To free-market advocates, choice applies to "affordable" private insurances -- often, inadequate minimum benefit health insurances that render many at health and financial risk. Private insurances further limit choice of providers to in-plan doctors. By contrast, Single Payer permits full choice of health care providers.

2) Competition - Health care competition invoked by free marketers implies competition among for-profit insurances, whose primary goal is to maximize shareholder profits -- often by reducing coverage with low-value products, like minimum-benefit health insurance. Progressives assert that competition should be restored where it belongs -- among providers and hospitals, based on quality of care.

3) Government Bureaucracy - It is somewhat ironic that opponents of a single-payer financing system argue that a government bureaucracy will come between patients and doctors. There is nothing more obstructive to patient care than the $20 billion annual private health insurance bureaucracy that games the system for profit by frequently denying or delaying health care claims, fracturing both the patient-provider relationship and U.S. primary care infrastructure. Fully one-third of U.S. health insurance claims are initially denied -- compared to many European countries, where T.R. Reid reported (Sick Around the World) claims are paid within two weeks.

Perhaps the greatest distortion is the notion that the uninsured are primarily responsible for rising health costs -- the health care cost-shift to the insured and taxpayers. John Sheils, VP of the Lewin Group (a scheduled witness at the May 12 Senate Finance Committee hearing) previously headed the team that evaluated 5 Colorado health care reform proposals in 2007. Sheils told the Colorado Blue Ribbon Commission on Health Care Reform that fully half of the uninsured pay their own medical bills.

In fact, the numbers of underinsured are growing at a faster rate than the numbers of uninsured, and contribute as much if not more, to growing rates of uncompensated medical care and to U.S. personal medical bankruptcy rates. Underinsurance has increased since the '90s, when escalating health care premiums precipitated the move by employers and individuals toward catastrophic coverage (euphemistically branded 'consumer-directed' or HSA health plans by free-market advocates). Coincident with the expanding catastrophic health insurance market, out-of-pocket costs also soared.

As out-of-pocket health costs rose about 70% from 1995-2005, the American Hospital Association TrendWatch Reports simultaneously tracked an approximate 65% increase in uncompensated medical care - costs that are picked up by taxpayers and consumers. In other words, as private insurers pass on more and more of their costs, they are subsidized big-time by taxpayers.

A 2008 study by the University of Colorado Medical School demonstrated a growing rate of underinsured in Colorado -- 36.3% who delay or ignore recommended care due to inability to pay. Add the rising numbers of uninsured Coloradans, and a total of over 50% are uninsured and underinsured -- a very different picture than that painted by Colorado Republicans who assert that major health care reform is unnecessary because "80% are fully covered and content with their coverage."

Nationally, a study by the LWV reported that 25 million adults under age 65 were underinsured during 2007, despite having insurance all year. The study estimated that 42 percent of all U.S. adults (86.7 million) were either uninsured or underinsured during 2007.

The model of Massachusetts health care reform reportedly being advanced by some in Congress is the worst of all worlds for consumers and taxpayers. It creates a mandate to purchase taxpayer-subsidized private insurance -- often high out-of-pocket cost minimum benefit plans. Massachusetts-style health care reform grants a windfall (sort of a taxpayer-funded bailout) to private for-profit health insurances, while leaving people at financial and health risk.

Dr. David Himmelstein testified on April 23 in a hearing of the Health, Employment, Labor, and Pensions Subcommittee that the Massachusetts Plan costs have skyrocketed, rising 23% between 2005 and 2007. He reported that "one in five Massachusetts residents went without care last year because they couldn't afford it. Hundreds of thousands remain uninsured, and the state has drained money from safety net hospitals and clinics..." to fund the plan.

If the private health insurance industry prevails, as they did in writing Medicare prescription drug reform, Obama's parallel 'public option' for health care coverage would quickly turn into a public subsidy for the mandated purchase of private for-profit health insurance. By contrast to the U.S., most industrialized nations save administrative costs and cover all by utilizing not-for-profit insurances.

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