Kathy-Ellen Kups

Kathy-Ellen Kups

Kathy-Ellen Kups is the breast cancer blogger for Everydayhealth.com.

They have all the power

While insurance companies have enjoyed unprecedented profit and growth, they have failed to do anything to address or prevent the problems we are facing with health insurance today. Instead of finding a way to include those in America that can't afford their own insurance, they established rates and policies to eliminate them. Instead of showing they are willing to extend a cooperative and inclusive hand to reform, they arrogantly raised their premiums for millions of Americans. The insurance industry has had decades to get it right and instead they decided to get as much as they could.

The problem with health care in America is not the health care itself. We are all agreed that it is among the best in the world. The problem is access to this great health care because of the cost of insurance. Even those that have insurance are deluged with co-pays and exclusions. Practices that limit treatment aren't because of providers but because of insurance policies. Health care is an essential service, without options outside of insurance companies they have all the power to weigh our access against their profits.

Insurance companies have already spent hundreds of millions of dollars lobbying against health-care reform and the public option. Next, I expect we will see millions of dollars poured into advertising to urge Americans to keep them in business; big business. The question Americans really face is whether their health care should be about profits or about people.

By Kathy-Ellen Kups  |  March 9, 2010; 12:28 PM ET  | Category:  Health Care Reform , Insurance Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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What Kathy-Ellen fails to recognize is that the insurance companies, by and large, are not making huge profits - at 3% (stated by KidCharlemagne) is a drop in the bucket of the bigger problems.

More importantly - what so many have failed to acknowledge is: Why are the costs of healthcare so high? The Doctors are not getting rich. Hospitals are having a hard time staying open. Equipment manufacturers barely make a profit as they reinvest millions into continued R&D to stay on the edge of technology to ensure the very best is available...no the people who ARE getting rich are the 'ambulance chasers' who sue at the drop of a hat.

Go ask a doctor, a hospital administrator, an equpiment mfg or a pharmacutical company exec what their biggest expense is and you will likely find it is malpractice/liability insurance. Why? Because it is easy money for the laywer and their client. Most cases are settled out of court - not because the doctor/hospital are wrong - but becuase they can't afford to go to court.

But you will NEVER hear this argument made in our congress - too many of our elected scum came from the legal community. Can't bite the hand that feeds you...

So, only when people like Kathy-Ellen Kups look at the WHOLE picture will we get an understanding as to why healthcare is so expensive. It's not the doctors, not the hospitals, and not the insurance companies...it is the 'ambulance chasing' greedy lawyers who file petty suits on behalf of clients with no self respect - leaching money - and subsequently health care availability - away from the average citizen.

You want affordable healthcare? Start with tort reform.

Posted by: Disbelief | March 11, 2010 7:41 AM
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Wow, where do I start...maybe with tmfotter who is on the mark with his comments.

It's well-documented that profit margins for health insurers is around 3%. Name another business sector that comes near that. State insurance departments annually scrutinize insurer cost, and they often reduce the insurer requests for needed increases on behalf of the public. In particular, insurers bid for group business based on admin costs and claims discounts which results in the market dictating price to a large degree.

Medicare, Medicaid, VA (Tricare), and the Federal Employee Programs are being held as shining examples of how costs can be held down. Has it dawned on insurer critics that it is the health insurers that bid on and administer these plans on a statewide and regional basis? For example, a BCBS plan derives 30% of its total income from administering Medicare Part B for a region. These programs are a very large part of an insurer's book of business.

Certain markets like individual and small group plans are loss leaders for insurers largely due to state mandates and guaranteed issue rules across America. Simply put, it's close to $1 in premium and $1.20 out the door in claims expense. To offset those losses, insurers have expanded their offerings to include dental, life, disability among others. These other lines of coverage provide significant dollar gains for insurers, and it's these lines of business that are largely responsible for some of the big executive pay and bonus levels. It's NOT on the back of Joe the Plumber as popular spin would have it.

Insurers continue to attempt to engage group plans and individuals to improve their health. It's been a slow sell, and that's been exacerbated by HIPAA privacy restrictions. Citizens need to clean up their act, eat better, avoid smoking, and exercise often to avoid the chronic care that results from heart disease and our current spate of diabetic onsets. It's 20% of the population that are responsible for 80% of the claims costs.

Do folks honestly think that these organizations (as a whole) are scheisters trying to wipe people's savings out? The people that work at these insurers are your neighbors, simply attempting to do a better job than the competing insurer to retain business.

Underlying cost is the issue here, and Congress and our President are failing us with this current attempt to turn the system upside down. Access only is the cornerstone of the House and Senate bills.

Posted by: KidCharlemagne | March 9, 2010 6:19 PM
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Finally - a blogger on this topic that isn't simply a proxy for the insurance industry! Way to go Kathy-Ellen!! However, you forget to mention the insidious way the insurance companies treat physicians. Not only do the insurance companies reduce the amount that they pay physicians on an annual basis in lock step with Medicare annual reductions, but they also make physicians wait more than 60 days for payment as well as routinely reject claims multiple times in order to make it more difficult for the physicians to get paid! The cost of administrative paperwork and refiling alone eats up over 10% of every dollar paid to physicians. To be clear, the insurance companies are not looking out for their customers as they are nothing more than another cash generating cog in the greed ridden, immoral Wall Street, insurance and banking machine that has brough this great country of ours to it knees.

Posted by: ron_in_seattle | March 9, 2010 4:11 PM
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In the economic structure of health care, the insurance companies are not the price setters. They are price takers, pure and simple.

In the DC area, MRIs cost anywhere from $500 to more than $2000 (with MRI centers linked to hospital firms like Inova being the most expensive). If the insurance companies had the power she claims they do, pricing would be much more normalized.

Insurance company profit margins have remained remarkably stable and small for 20 years, generally growing in proportion to the costs of service. If Kups had anything close to a point, this relation would not exist.

Posted by: TMFOtter | March 9, 2010 4:02 PM
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