Wednesday, July 1, 2009

Many "Satisfied" With Their Health Ins. Coverage, Until They Really Need It

Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.

Many of those who have health insurance really aren’t “insured” from the financial burdens of rising health care costs. A national study released this year found that while medical debt contributed to 62 percent of the bankruptcies in 2007, 78 percent of those bankruptcy filers had health insurance but “still were overwhelmed by their medical debt.”

“Under-insurance is the great hidden risk of the American health care system,” says Elizabeth Warren, a Harvard law professor who has analyzed medical bankruptcies. “People do not realize they are one diagnosis away from financial collapse.”

UnitedHealth, for example, has been selling policies with sharply limited coverage through AARP, the advocacy group for older people. One of the plans capped reimbursement for an operation at $5,000, for example, although many procedures cost at least several times that amount.

Last week, a former Cigna executive warned at a Senate hearing on health insurance that lawmakers should be careful about the role they gave private insurers in any new system, saying the companies were too prone to “confuse their customers” [making them think they have coverage that the actually do not have] and dropping their customers when they file high dollar claims for expensive medical treatments that should be covered.

“The number of uninsured people has increased as more have fallen victim to deceptive marketing practices and bought what essentially is fake insurance,” Wendell Potter, the former Cigna executive, testified. Potter also said, companies routinely drop seriously ill policyholders so they can meet "Wall Street's relentless profit expectations." "They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment and the application omission is unrelated to the illness currently afflicting the policy holder," Potter said.

Most Americans who have private health insurance say they are fairly happy with the cost and quality of their own insurance according to a recent poll. In terms of quality, 77 percent say they are satisfied with their own insurance coverage even though one in five report they or someone in their household have had to go without a test, treatment or procedure that their doctor recommended because their health insurance plan wouldn’t cover it.

Most who say they are satisfied with their coverage have not experienced a serious illness that requires high dollar medical treatments. For those who are afflicted with a serious high dollar illness, many tell a common heartbreaking story that their private insurance company abandons them just when they need their live saving insurance coverage the most.

Republicans continue to say that "free market competition" among private health insurance companies can do a better job of providing health coverage for Americans than any variation of government sponsored program. The problem with that argument is that the private health insurance industry is no long competitive. The private health insurance sector today looks more like an anti-competitive monopoly. According to the recently released HCAN report, “Premiums Soaring in Consolidated Health Insurance Market“:
In the past 13 years, after more than 400 corporate mergers among health insurers, a small number of health insurance companies now dominate local markets. According to the American Medical Association, 94 percent of insurance markets in the United States are now highly concentrated, and insurers are thriving in the anti-competitive marketplace, raking in enormous profits and paying out huge CEO salaries.
These mergers and consolidations have created a marketplace where a very small number of larger companies use their monopolistic power to raise premiums—an average of 87 percent over the past six years—restrict and reduce benefit packages and control and cut provider payments.


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