Monday, August 24, 2009

Insurance Industry Pushing For "Private, For Profit" Mandate In Reform

Insurance Industry Is Pushing For Health Reform that requires people to purchase private health insurance, but without a "true" public health insurance option and insurance industry regulation.

Updated August 24, 2009 - The Los Angeles Times reports again today, just as it did in early June that the heath insurance industry so successfully lobbied the congressional committees responsible for crafting heath insurance legislation in the early stages of the drafts of that legislation that it is poised to reap a financial windfall.

The half-dozen leading overhaul proposals circulating in Congress would require all citizens to have health insurance, but the bills vary in the degree to which they would empower government to be an actual competitor and to regulate coverage type and costs.

Health insurance reform may turn turn out to be nothing more than a federal mandate for people to buy private health insurance, as auto drivers are now required to buy auto insurance, and the government will pay the private health premiums for the very poor - as the public option.
"It's a bonanza," said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc.

Some insurance company leaders continue to profess concern about the unpredictable course of President Obama's massive healthcare initiative, and they vigorously oppose elements of his agenda. But Laszewski said the industry's reaction to early negotiations boiled down to a single word: "Hallelujah!" . . .Read the full story in the LATimes.
Updated August 18, 2009 - from NYtimes OpEd Columnist Bob Herbert -
The hope of a government-run insurance option is all but gone. So there will be no effective alternative for consumers in the market for health coverage, which means no competitive pressure for private insurers to rein in premiums and other charges. (Forget about the nonprofit cooperatives. That’s like sending peewee footballers up against the Super Bowl champs.)

Insurance companies are delighted with the way “reform” is unfolding. Think of it: The government is planning to require most uninsured Americans to buy health coverage. Millions of young and healthy individuals will be herded into the industry’s welcoming arms. This is the population the insurers drool over.

This additional business — a gold mine — will more than offset the cost of important new regulations that, among other things, will prevent insurers from denying coverage to applicants with pre-existing conditions or imposing lifetime limits on benefits. Poor people will either be funneled into Medicaid, which will have its eligibility ceiling raised, or will receive a government [tax credit] subsidy to help with the purchase of private insurance. --For full OpEd click here--
Original June 8, 2009 post continues:
The Los Angeles Times reports that private health insurance companies faces a bleak future if the proposal they champion most vigorously -- A federal mandate that everyone buy medical insurance coverage from private health insurance companies -- is not adopted. They are fighting hard for this federal mandate legislation which would be sweetened with taxpayer-funded subsidies for customers who can't afford it, and enforced with fines.

This so-called "individual mandate health care" program amounts to a huge booster shot for private "for profit" health insurers, which would serve up millions of new customers almost overnight. "I think that's why we've seen the industry basically trying to play the administration's game," said Jane DuBose, an analyst with industry tracking firm HealthLeaders-InterStudy. "They really could be licking their chops over the potential here."[LATimes]
Private insurers lost an estimated 9 million customers between 2000 and 2007. In many cases, people lost coverage because they or their employers could no longer afford it as premium increases outpaced wage growth and inflation.

According to the National Coalition on Healthcare, nearly 266,000 companies dropped their employees' health care coverage from 2000 to 2005 and for those employees that have not yet lost coverage the average employee health insurance premium is rising nearly eight times faster than income.

Yet, while the private insurance industry is hemorrhaging customers, profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007. Clearly, there is a vicious cycle where an ever shrinking number of people are paying ever increasing monthly insurance premiums for less coverage. (more statistics)

The private insurance industry successfully scuttled the "single payer" approach to health care reform.

The private insurance industry is spending tens of millions dollars to lobby congress to also scuttle medicare-like government option plan complaining that such competition would cut into their near-monopolistic lock on the health care marketplace and significantly impact industry profits.

According to the Physicians for a National Health Program Organization - The U.S. spends twice as much as other industrialized nations on health care, $7,129 per capita. Yet our system performs poorly in comparison and still leaves 45.7 million without health coverage and millions more inadequately covered.
This is because private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $350 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.

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