Health insurance must die.

I can’t raise my rates 40% in a year. Yet, I’ve had incredible, wild swings from year to year for health insurance for my small business.. Reading this article about a former Cigna exec’s testimony to Congress makes it real clear why.

It’s worth a read of the full piece:

Wendell Potter says he is finished defending the insurance industry, which he says is “beholden to Wall Street.”

Wendell Potter once was a vice president in the public relations department for insurance giant Cigna.

At a hearing last week before the Senate Commerce Committee, the former vice president of corporate communications at the insurance giant Cigna testified, “I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry.”

via Ex-executive accuses insurance giant of ‘purging’ customers – CNN.com.

As an ad guy, I can also tell you that the people who have the most to lose in health care reform are the people who don’t actually provide any health care at all: the “Health Insurance Industry.”

Revenue for Cigna in 2008 was $19.1 billion. If all of that had gone to health-care providers instead of paper pushers who deny claims, we’d all be a lot healthier.

Fear of the unknown is a powerful tool- and the idea of NOT paying a middleman for “protection” from medical disaster is very foreign to Americans. At least, those of us who can still afford their care.

I don’t know of any doctor who took home over $100 million in a year, practicing medicine, but to insurance company CEOs- that’s all in a years pay.

To remind you, when you pay a CEO $124.8 million in a year, as United Health Group paid  William McGuire in 2005, that works out to $60,000 an hour. Now do you understand why insurance companies don’t want a single-payer health-care system?

I’d much rather pay for health care, than health insurance, wouldn’t you?

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12 Responses

  1. Rob Degenhart July 3, 2009 / 9:16 am
    I’ll pay Medical Mutual $73,020 this year to insure 5 employees (no dental or vision).  We shopped around to United and Anthem in the spring.  Both initially came back with premium quotes 30% less than our current Med Mutual.  So, as promising as this looked we all filled out applications so we could move forward with switching, only to be informed that our employees apparently are too unhealthy, old and have children. The premium quotes changed to less than 1% of what we are paying Medical Mutual.

    I say this kiddingly, but, next time a hire a new full-time employee they must be single, between the age of 27 and 34, be asexual and must undergo a complete health screening.

    Big Health Industry is forcing me to discriminate cause they discriminate against me.

    Medical Mutual, Anthem and United Health Care can suck monkey balls, those pieces of shit.

  2. David Esrati July 3, 2009 / 9:58 am

    @Rob- do you realize that there would be a doctor, more than willing to only have 5 patients and be paid $73,020?
    Considering a GP could easily handle 200-500 people, that’s quite a nice living.
    Why are we paying “insurance”?
    I was told a 27 yr old with a hysterectomy still needed maternity coverage by the thieves. Guess they flunked sex ed.

  3. Matthew Crowe July 3, 2009 / 10:13 am
    Agreed. A lot of critics of single payer, or a public option, or health reform of any sort, don’t realize the damage the current system does to small business, competition and entrepreneurship.  They hear scare stories of 4-month wait periods for hip replacement in Canada and somehow reflexively conclude our system is the best in the world.

    Here’s hoping some real, actual reform happens by year’s end.

  4. Drexel Dave Sparks July 3, 2009 / 11:16 am
    Health insurance keeps wages down. I get yearly pay increases according to my contract. But they don’t really mean squat, because every year premiums rise, negating any pay increases I might have had.
  5. Rob Degenhart July 3, 2009 / 1:59 pm
    @Drexel Dave…I hear you brother…as a small business owner, I do what I can, but can’t not pass on my annual increases to my employees.  I currently pay 75% of my employees health care, they pay the rest pre-tax and also can contribute to a flex spending account, BUT still their costs hurt just as much as mine do…on top of that, I’m considering asking them to pay more next year.
  6. tg July 3, 2009 / 2:13 pm
    Ever notice how every time there is a conversation about reform or regulation, the industry most likely to be reined in starts spreading the word that said reform or regulation will put them out of business, reduce competition, ultimately increase costs to consumers and put an end to the world as we know it?  

    I truly don’t know of anyone in this country that does not want access to affordable, quality health care.   Instead this has become a political battle.  Republicans will never initiate health care reform because they are too pro big business.  Yet they know that if the Democrats are successful in passing real and meaningful reform, Republicans won’t be able to pick up any more seats in the next election.  So once again, it boils down to those in power vs those who want to be in power and the rest of the Country gets screwed in the process.

    David, you bring up an interesting perspective I’ve never really thought of before.  I know more & more doctors are starting to form a health club type membership format – you pay so much a month or a year to them and that covers any doctors visits and routine care you would need.

    Another thing missing from the conversation that I’d like to see is a sort of Better Business Bureau for doctors and other health care professionals.  How do you really know if a doctor is good or not?  Especially since they will protect each other by remaining silent when they see another screw up.

  7. Drexel Dave Sparks July 3, 2009 / 2:36 pm
    yeah, receive an annual cost of living wage adjustment of 2.5 percent, and an annual raise based on years of service. And in the five years I’ve been on the job, my take-home pay has not gotten any bigger. They are smaller.

    We need business owners more than ever to advocate for Single Payer national health care insurance, just like in Canada and Europe where their industries and quality of living KICKS AMERICA’S ASS.

    Parasite middle men are not a necessary component of any economy, merely a burden.

  8. D. Greene July 5, 2009 / 2:27 am
    I’m normally a “free market” type of guy, and for a long time I’d been opposed to changing what I perceived as a markets based health care system, mostly because I didn’t know anything about how health care works.

    Health benefits really got started around WWII and after, as a way for employers to pay their employees more in benefits without having it taxed, etc… It’s slowly mutated into the monstrosity we have today.

    What I don’t get is why I have to use “insurance” to pay for a standard medical procedure. Take the auto industry for example. Insurance covers accidents, often catastrophic, where the person could not afford to pay themselves. This is reasonable, and works for health care too. But I don’t need to use my auto insurance to change my oil, rotate my tires, fix my brakes, etc etc etc. Imagine the skyrocketing prices you would experience if you had to use insurance to pay for these basic functions. Every shop would have to hire extra people just to process all the insurance claims. This would lead to higher prices, which would lead to higher deductibles. Both the mechanic and the insurance company would be working in tandem to raise prices and screw the only person actually paying, namely the consumer. This is what happens in the health care industry.

    Furthermore, you have to admit that something is pretty broken when a company’s entire bottom line and profit motive is predicated on the idea of denying medical claims as often as possible. Bonuses and raises for claims adjustors are based on their denial rates, at least according to Sicko (hey I’m no Michael Moore fan but it’s hard to deny that part of the movie, especially).

    The problem with health care, however, is it breaks the traditional model of market supplied products and services, and government supplied services, for that matter.  In terms of supply and demand, there is a finite demand for automobiles every year, a finite demand for roads, for sewers, for police and fire services, and so on. It’s not the same with health care. One person’s demand for health care services can conceivably have a very high upper limit, as long as their diseases, disorders and injuries haven’t killed them. Imagine an overweight smoker. Diabetes risk, heart failure risk, stroke risk, cancer risk, pulmonary problems, etc. Not to mention any other potential problems caused by their family history and genes.  This person will ultimately demand multiple daily medications, and probably hospital stays and surgeries, not to mention the frequent doctor’s visits.  It’s not uncommon for senior citizens to be on 5 or more medications at once, all treating different problems or working in concert.  Not only do we have an entire class of people now who not only demand enormous amounts of health care, but the very same people often are unable to earn enough to help pay for their care, often because of their health problems. It’s a double whammy that even further burdens the system.

    And consider that now Ohio is 10th fattest in the nation, with something like 30 percent of children classified as obese nowadays. That’s really scary.

    So, we’re basically eating ourselves dead or at least bankrupt. The government has admitted that Social Security, Medicare, and Medicaid are all going to be financially insolvent within the next 20 years, roughly.  What have we done about it? Nothing, really. My worry is that a single payer system will just be an extension of these programs, with ballooning costs year after year. The Federal Government has failed thus far to control costs in these key government programs (Medicare/Medicaid lose literally billions a year in fraudulent claims).

    Canada and Britain’s health systems aren’t exactly profitable either, as they are enormous debt-inducing liabilities. My Canadian relatives have seen a lot of coverage cut from the national plans, including some dental and vision benefits, and some benefits specifically for seniors. My uncle had to wait 9 months to have a pretty basic surgical procedure done, where in America there would have been comparatively no wait for the same procedure. Shortages and delays do happen. Canada has been dealing with nurse shortages for a decade. Britain’s NHS runs annual deficits of over a billion dollars.

    Britain has provided health care for its citizens since right after World War II. The war had pushed Britain into a situation where the government was already providing health care to a huge sector of the population: newly added civil and military service people, and other citizens injured in bombings. For them, national health care was a more organic change.

    I’m not saying our current model is sustainable or even moral. But at least American medical science, free market and government funded, have supplied a plethora of medicines, medical devices, and life saving procedures and inventions that have contributed to medicine worldwide.  Will the same level of innovation and technical prowess be retained if a major overhaul happens? I certainly hope so.

    My overall point, however, if I can justify this rambling, is that there is no magic bullet solution to this problem, and it is the height of intellectual laziness to assume that there is. Hopefully our politicians can tread carefully and thoughtfully as they work through this issue, but somehow I doubt it.

  9. David Esrati July 5, 2009 / 12:38 pm

    @D Greene- thanks for the amazing input. The comparison to car maintenance is so right on.
    The health care industry is the only one I know of where you can’t price shop- and can’t get a quote. It’s because of this that they get away with murder- see my post about the cost of 3 stitches: http://esrati.com/?p=1192
    The cost of not treating illness early and not having access to preventative medicine far exceeds the costs of providing health care for all- as do the costs of psychiatric care delivered by the State is much less expensive than filling prisons.
    Healthy people are more productive. If you want to see this country pull out of this financial mess, the only way will include all of us being healthy enough to work- or a bigger war (some say that WWII was the only thing that really ended the great depression).
    I wouldn’t count on our current politicians to understand this until we implement campaign finance reform- since the industries do a good job of buying their votes.

  10. Dani July 7, 2009 / 5:04 am
    Be careful what you wish for, D Greene tells some of the things Sicko didn’t show.  Single payer healthcare is not the answer.  I have worked in the medical field for the last 15 years and unfortunately it is business.  That is hard to stomach when it is lives that hang in the balance.  It is a viscious cycle that never ends between doctors, insurance companies (health and malpractice), and lawyers….that is not even mentioning the drug companies, FDA and other research that contributes to medical costs.  Some sort of regulation needs to take place, but when you have a governmental single payer and your aging parent needs open heart surgery that is relatively common today- they approval process is lengthy and IF it is approved now you are on a wait list that can be months long.  What people also need to keep in mind is these outrageous costs have been what has funded medical advances that we have available.  It is far from perfect definitely, but the government has not done well managing medicare and medicaid.
  11. April Hunter July 14, 2009 / 2:32 am
    Dani, I disagree. Most medical research, discoveries and breakthroughs have not happened here in the US. They are happening in countries that have single payer or some form of socialized health care.  Europe and Canada are mostly leading the way in science and medicine now.
    Here is where America leads: we have the most obese, heart disease, diabetes, the worst test scores for kids and the worst illiteracy, the most teen pregnancies, the most polution and oil consumption.
    But medical breakthroughs and cures? That’s not something we have to worry about right now.

    Other countries have a stake in us not getting single payer healthcare, since they love to sell their drugs to us at a much, much higher cost.

    I think government REGULATED (not run) healthcare is the way to go. Single payer, medicaid for all.
    A government regulated MRI in Japan is $98.
    The same MRI in America is $1200.
    Clearly a for profit healthcare business in America is not moral. And with %50 of all bankruptcies in the USA stemming from medical bills, we simply cannot afford to ignore it any longer.
    %75 of Americans want Universal Healthcare. How do we get it? That is the real question.
    I would love to see smoking, alcohol, soda & candy taxed to the legal limit to pay for it. After abolishing the—what? $400 billion the health insurance companies make each year, affording it shouldn’t be too much of a problem.

    –April Hunter

  12. tg July 14, 2009 / 10:18 am
    A friend on Facebook posted this link yesterday – an interview by Bill Moyers with Wendell Potter, former VP at CIGNA.  It’s pretty darned enlightening and worth the 36 minutes it takes to watch.  Ironically, Mr Potter states that Michael Moore was spot on with Sicko, but the insurance industry lobbyists pretty much told the Democrats at the time if they sided with Moore, the contributions would go to their competition in the next election cycle.

    http://www.pbs.org/moyers/journal/07102009/watch2.html   One would think the health care industry would want Americans to take an active role in becoming healthy, eating better, exercising more…reality is they make a lot of money when we’re sick!

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