LIFE & DEATH IN THE MARKETPLACE

There have been many warnings lately that government is getting between you and your doctor. As a person who now receives Medicare, I can tell you, that is far better than having the health insurance industry in the middle. Far more of my expenses are being covered now than they were when I was paying my own self-employed insurance premiums. Furthermore, given the inflation of those premiums over the past decade, I would not even be able to afford that insurance today. And even if I could, I am sure the most expensive procedures would be denied as "pre-existing."

Let's consider a few facts about the health insurance industry. How do those companies make a profit? Like any other business, to make a profit, health insurance must achieve revenues that exceed expenses. So would it not seem reasonable for them to charge more for premiums than they pay out in claims? If in fact that was their only source of revenue, it would not only be reasonable, but just. The truth however is that much of their revenue comes from them investing your paid in advance premiums in supposedly safe ways to achieve additional returns from that investment. If their returns are good, they can lower premiums - or so goes the theory. And if they lose money on those investments, they can simply raise your premiums to make up the difference.

Wait a minute! Does that mean that they pass their market losses on to the customer? You bet. That is exactly why those premiums began skyrocketing right after the dot.com bubble burst. This is called the "insurance cycle." Who else gets to do that? Not you and me. If our 401K's lose money in the market, we simply have to work harder or longer or live less well. But these companies continue to make double digit profits for their shareholders and pay fat bonuses to their CEO's.

That's what it means to have the health insurance industry in the middle. The patient pays more for less. And the doctors and hospitals must pay outrageously higher premiums for malpractice insurance even though the sum total of payouts in malpractice claims have been level for over a decade. It ain't the lawyers and a few high price jury awards causing this, it's the Health Insurance Industry continuing to make money even when they have managed badly.

Their double digit profits are costing lives! When some poor sick insured person requires a course of expensive treatments ordered by their doctor, they may get "recinded."

Recently a New York Times editorial described this practice.

Insurance Company Schemes
June 28, 2009
"A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims."
For full story click here.

Given these facts, do you want The Marketplace, as some in Congress advocate, in between you and your life? Or your child's life? That's what's happening now!
Let's consider the ethics and legality of such human actions:
* If a parent fails to get medical help for a child who dies as a result, what are the consequences? They may have commited a felony and may be imprisoned for this lack of action. The ethics are sometimes mixed with contrary religious beliefs. That does not change the law.
* If a driver hits someone and leaves the scene, what are the consequences? We all know this is hit-and-run, and the consequences can be severe. The ethical problem is obvious.
* For a boater to fail to provide assistance to another boater in trouble is against the law.
* How would we judge a doctor who refused to provide treatment to a bleeding person who did not pay for it in cash first? The answer is obvious.
So, what are the consequences for a health insurance CEO who, to keep profits up and Wall Street happy, establishes an informal company policy to deny or delay as many claims as possible, or even worses, recind them, which sometimes results in the death of an insured person?
There is no consequence! It's just business! It's just the working of the marketplace!
So when did we decide to treat human life as a commodity?
America! How did we get here? What slick tounged satan sold us this "free market" poison apple? It wasn't Adam Smith.
And for those of you who have funds riding on the returns that come from these insurance companies, be aware that your profits may come at the expense of someone else's health.