The reality too is that the CEO of Aetna earns 24 million a year, taken from those profits, Cigna’s CEO takes home 30 million a year see a great table from the same link.showing profits in the billion-plus zone and CEO salaries Health insurance profits
I support the moral right of every human being to health care. I don’t want to see toddlers dying from sepsis because of a playground injury, women dying in child.birth in their parents living rooms, or pandemic death and paralysis from polio due to a failure of funding for actual health care and the public health infrastructure.
But universal health insurance is no guarantee at all of universal health care; they are not the same. A case study in point could be the expensive, highly profitable, and required student health insurance policies that Aetna and others foist on students in the UMASS system. As the Globe recently exposed, 40% or more of those required payments for health insurance go to profit, not health care.
Our family has personal experience with this fake health insurance for public university students. Our son is too old to be on our policy (which itself is only affordable via COBRA as my husband’s unit where he once worked was outsourced and he has been unemplyed since May – another issue entirely I grant). Therefore, in order to enroll at UMASS, he was required to buy “student health insurance” at a far higher cost than any connector policy. Even when he had bronchitis, the student insurance and health center could not treat him; he went to his old internist and so far, the bill is not paid. The “connector” won’t cover students, and the Universities require “their own student policies” or you cannot enroll and hard earned student dollars or federal student loans go direct into the pockets of Aetna and its CEO who earns $24 million dollars. Remember, at least 40% of those premiums are straight profit!
Health care is certainly NOT the same as the exhorbitent so-called student health insurance that UMASS students must purchase or be barred from enrolling.
Health care dollars that come from taxpayers should go for health care, not for profits for the health care insurance industry which only exists to enrich shareholders and the corporate elite. Remember health care is NOT the same as health insurance.
Bailout dollars should only have gone to pay workers to work catching up infrastructure repair and the like, with the minimum adminstrative structure to oversee that work and avoid waste and graft. Bailout money should not go or have gone into the bottomless coffers and 140 billion in bonuses for rapacious banksters and corporate neobarons.
The reason General Insurance Corporation (GIC) consistently outperforms the cost of private health insurance coverage is that its CEO earns a modest state salary – not tens of millions like AETNA’s CEO and other health insurance CEOS. GIC exists solely to provide health care, not health insurer profits. GIC is not running a sucker bet to gouge fearful consumers; remember, the goal of every insurance company is to take in more than it pays out by the greatest margin it can get away with!
Of course, those unions whose CEOs earn more than a million dollars paid for by member’s dues, and whose pension funds hold investments in the health insurance industry stocks may have a conflict at their highest levels as a result. That would be an interesting topic for an investigative reporter or tenacious student journalist.
I sure wish UMASS students were covered by GIC not Aetna!
Anyone else see a pattern here?
Thank you, again, AmberPaw.
<
p>Access to high-quality health care is a fundamental human right that should be available to every person in America.
<
p>Single-payer government-sponsored universal health care is the only outcome that works.
…the more convinced I become that single-payer really is the only right way, but even then there are a few different ways to go about it. Frontline re-aired a program the other night that investigated the systems of the UK, Germany, Japan, Taiwan, and Switzerland, the last two actually being relative newcomers to the universal coverage practice. The correspondent was trying to see what we might learn from other systems. Taiwan DID officially look at other systems when trying to figure out its own, but I’m afraid we couldn’t do that because that would involve (gasp!) acknowledging others might know better than we do. In each country the correspondent asked a top government health official whether anybody ever goes bankrupt due to health costs and pretty much got laughed at every time!
I like the public option strategy, because I do believe that chances are good that a government-run plan would be superior to private plans. However, atrophy, incompetence, and corruption are too often the result of a monopoly, and clearing out the field for the government’s benefit may end with such. Six years’ experience in the Canadian single-payer system (in Quebec, widely seen as the best provincial system in the country) tells me that single payer may not be the best way to go…
the German system is the best model, with the public option being what transitions us to it.
Can’t we take a few representative states and try the public option? The Commonwealth Connector has been an innovative experience with many commonalities to the public option being proposed. What is the result and what are the long term effects? Let’s not break the system which works for so many with no knowledge of the new system. Lastly, I no see much in the way of cost controls in “any” of the reform proposals.
Off the top of my head –
<
p>Positive – I’ve heard 97% of our population is now insured, by far higher than any other state.
<
p>Negative – Mandated pay for coverage like car insurance, whereas I would prefer it just be there for you like public education K-12.
What it shows is that medical insurance loss ratios (the ratio of premiums collected to claims paid out) have dropped from 90+% in the early 1990’s to around 80% today.
<
p>The remainder (around 20% of premiums paid in in recent years according the article you cited above) goes to administrative expense, marketing and profit.
<
p>Administrative costs are significant for health insurance -companies need to qualify and sign up providers, process and adjudicate claims, send checks to the providers, review utilization, provide customer service support to the providers and members participating in the plan, hire underwriters to analyze expected claims costs and help them price their plans so that they don’t pay out more than they take in, and maintain sales and marketing staff to sell their plans in competitive marketplaces.
<
p>The article indicates that medical insurer profits range from 2-10%. These are not outrageous profit margins – they would be deemed anemic and poor profits in many industries.
<
p>I don’t defend some insurance companies’ bloated CEO salaries or aggressive utilization management practices that deny benefits to people who should receive them. I’d just point out that for-profit health insurers are operating in the margin between the premiums they take in and the medical costs and fees they must pay out to doctors, hospitals, pharmacies, medical device suppliers, imaging centers etc. for each service, procedure or supply they provide. Those medical costs and fees have been steadily rising. An answer to the health care cost problem must address overutilization of services and the profit motive amongst providers – doctors paid by the procedure not surprisingly have not just an incentive but also the tendency to perform more procedures – whether they improve the health outcomes of their patients or not.
<
p>Single-payer (the government or a single insurer pays all claims) does NOT solve the problem if all of the care providers remain for-profit entities. All of the administrative costs, except the small percentage involved in sales and marketing, remain needed – the whole infrastructure needed to qualify providers, process claims, send checks, provide customer service.
<
p>Rising health insurance costs are a symptom, not the root cause, of rising health care costs. This is true whether health care costs are paid by many insurers or a single-payer system.
<
p>I think it’s a fair question whether health care should be a for-profit enterprise at all, but if you think it shouldn’t, you need to address not just the for-profit insurers, but also the for-profit hospitals, doctors, device manufacturers, pharmaceutical companies, etc.
<
p>
…and per an investigative report by the Globe, the Aetna student health insurance had 40% profit rates.
<
p>In fact, some profit margins are 45% per the Globe
A loss ratio of 60% doesn’t mean the company has 40% profit, it means that it pays out 60% of premiums in claims costs. It still must cover administration and overhead. Realize also that a company with very favorable loss ratios is vulnerable to competition. Some other company that can keep administrative costs lower can offer lower premiums.
<
p>I tried to read the Globe piece you cite, but the link does not go to a specific health insurance piece.
Although it doesn’t use the term, I suspect this article about student health coverage at colleges is also referring to loss ratio.
<
p>This doesn’t mean these companies are realizing 30% profit. It’s saying that 70 cents of every dollar in premiums pays medical bills. The rest pays for everything else: the call centers, administrative personnel, the insurance cards, the IT systems, provider credentialing, provider network management, utilization management, underwriting, sales, marketing, management.
<
p>It makes sense that student insurance would pay out less for medical bills than medical insurers overall since young people are healthier.
<
p>The Globe piece also is underscoring the point I made above about health insurance companies’ profits in general – the article notes that plans sold to the general public typically spend 12 cents of every dollar taken in from premiums on administrative costs and profit.
<
p>I think the healthcare debate is often marred by poor understanding of the role of insurers. There are fair criticisms of insurers – for example that they have a financial incentive to drop poor risks, such as people with preexisting conditions. But insurers aren’t driving the increases in health care costs. Insurers through their analysis of utilization and monitoring of outlier providers actually act as a check on the real drivers of health care costs – for-profit and defensive medicine.
Globe
Insurance Co.
Q3-2009 profit
Q3-2008 profit
Q1-Q3 2009 profit
2009 profit margin so far
BCBS
$17.1M
$24.4M
-$53.2M
???
Tufts
$22.1M
$17.3M
$8.8M
4.6%
Harvard Pilgrim
$13.6M
$23.8M
$8.3M
4.15%
Fallon
-$13.4M
$5.7M
-$16.3M
-1.96%
Not being familiar with the industry the chart of numbers is by itself pretty meaningless. If most of that money is lining executives’ pockets while they cry poverty and try to excuse denial of care then the answer to your title question is an emphatic yes.
but why don’t a large group of liberals who disdain the evil insurance companies so badly simply start up a new insurance company… call it Citizen’s Insurance. You could make no profit and pay the people a fair wage. Make sure the person heading up this behemoth company gets paid no more than 4x the lowest wage earner in the company. Which means you will have to pay the CEO a very low salary OR you’ll have to pay the person cleaning the men’s room $100/hour. The make sure you insure anyone who applies (no preexisting condition considerations…) and have a very low copay (maybe $1) on any service including prescriptions. Throw in free abortion coverage and free medical care for illegals just to piss of the conservatives! I think you could do it.
<
p>Maybe you could even hire Charlie Baker as a consultant to get it started! Don’t expect too many investors since most of the liberals I know with any money invest in companies who make profits (like oil companies…). You could get free advertising on Air America… but nobody really listens to that… or MSNBC but that has the same lack of viewers.
<
p>Just be careful not to break any of the rules I mentioned above or you too could become an Evil profiteering blood sucking insurance company…
<
p>PS When are you going to open up the “People’s” oil company?
…but, sarcastic parts aside, I could support others doing this. I’ve suggested before that other businesses also adopt this model AND advertise that they do it, so people will have a socially conscious option for where to take their business. I never said don’t get ANY profit, BTW, but it wouldn’t be something outsiders invest or hold stock in via an IPO. The money would come entirely from consumers, not shareholders. I believe this is similar to utility co-operatives where the profits go directly back to the people.
First because it would operate with huge losses every year.
<
p>Second, because it would require customers to pay more than charged by BCBS and others which means liberals would opt for the cheaper option. This business case would not be very different than the case of opening a “liberal-friendly” alternative to Wal-Mart… and that store staying in business.
‘”Liberal-friendly” alternative to WalMart.’ It’s name is Costco, and it’s a big reason Walmart was forced to close out their “Sam’s Club” wholesale investment.
<
p>The whole “Why isn’t X done? Because I say X can’t be done” routine isn’t exactly stunning reasoning.
Inserting facts and logic into a discussion is unfair to JohnD. 😉
I wasn’t familiar enough to come up with an example, so I am glad you did.
Just not quite as big profits. You’re implication that the absence of obscene profits equals no profits at all defies all logic.
What do we do if they go over (Apple’s next IPOD is a smash and Apple posts a 30% profit margin… punish them!)? How about if they lose money, does the government have to compensate them for the loss? Stay out of their business and let them run themselves… Capitalism!
The numbers per se aren’t my problem, though any company that is successful should make sure its wealth is shared with ALL of its employees by paying them decently and not concentrating wealth at the top. I don’t care if a company like that fails either, but you don’t get that there’s more to society than business. This is a health care thread. People are left in dire straits by the malfeasance of that industry. You seem to think that the bottom line is the only thing important then you wonder why I suggest that you really don’t care if some people aren’t covered. Every other comparable country gets that so we have no excuse. It is WRONG to make profit by denying people care – period! Making profit by providing the best quality of care is much better. I will absolutely NOT engage about what specific number is too high to be obscene, but like was once said about a different kind of obscenity I know it when I see it.
<
p>Not if I owned that company. This isn’t the People’s Republic! Wealth goes to the people who risk their wealth to start and operate a company.
<
p>
<
p>Why are you so fixated on other countries? They don’t matter.
<
p>
<
p>”Yes”. They have a fiduciary responsibility to the stock holders and no responsibility to humanity.
<
p>
<
p>I’ll try this again… go start a company and operate that way. Go make a product which competes with a company from China and see how long you last. Have you seen the exodus of companies from MA becasue of our great taxation and business costs? Go ahead and start Christopher Inc and operate in the manner you describe. See how long that lasts.
<
p>
<
p>That sounds like something I would say. But you can’t say that. We run our lives by rules… We don’t have a tax code which says you pay 20% taxes but he pays 10% taxes because he’s a nice guy. There was much debate last year about the oil company profits and I was 100% ok with their profits but people wouldn’t acknowledge that as a percentage they were normal.
I wish this were an email exchange so I could respond interlinearly, but I guess I’ll do the blockquote method.
<
p>
<
p>Where exactly did you get that wealth? Your initial investment is great, but how does your company make money? It’s from the labor at the bottom of the corporate pyramid, without which you wouldn’t have a business very long and lose your whole investment.
<
p>
<
p>Fundamentally disagree. We absolutely can and should learn the best practices of what works. Plus as long as we expect employers to cover health we put our businesses, and by extension our country, at a huge competitive disadvantage.
<
p>
<
p>If you seriously mean this then we have nothing to discuss. There should be no stockholders in a health insurance company except possibly the people as a whole. This is a moral obligation, plain and simple. Anyone who just wants big profits should find another line of work.
<
p>
<
p>I am a bit more optimistic than you are that such could work since I would go in with goals other than to see how fat I can make my own wallet. I would also advertise that I do business differently because some consumers want a socially-conscious option. I think if I slash overhead and don’t have shareholders I could even sell American and pay my workers a decent wage. That being said, it is precisely because the market itself might not sustain it that government needs to come in and put its thumb on the scale on behalf of capitalism’s victims.
<
p>
<
p>We do need rules, but you are being oversimplistic (what a shock!) We could easily write the tax code to tax at different rates depending on various circumstances; one example might be a tax credit if your company pays every worker at least twice minimum wage. I’d even consider a law prohibiting say the CEO of Wal-Mart from making more than 100 times that of the lowest paid associate. This would in no way discourage reaching higher; it would just mean acknowledging the associate in his small way assisted in your success.
I will answer after I attend another meeting but you may be on to something. But I think we have a fundamental disagreement on the goals of a private company. Companies are created to sell something and make money. They are not created to employ people. Many companies are competing oin the world market by employing fewer and fewer people (including the use of robots and other specialized machinery). You seem to think the purpose of a company is to provide a good working atmosphere, a good wage and wonderful benefits. From this foundational disagreement, we may have a hard time arguing the details.
But I appreciate seeing some passion in your words and having a good honest go with no/little attacks on each other. I’m more jaded while you are more hopeful.
…that in our system companies are designed and expected to make money. I guess what I’m saying is that especially when it comes to essential services such as health we as a society have to completely rethink those expectations. I’m starting to crystalize the fundamentals of this equation in my own mind. If the market exists to make money and the government exists to help people, both of those working in tandem should be able to create a reasonable equalibrium creating the best combination of circumstances that will neither leave anyone behind nor hold anybody back. Depending on the need vs. want paradigm some things may lean toward government and others toward the market.
Is a public health clinic expected to turn a profit? How about a hospital emergency room? A hospital in general?
<
p>On a related note: is the American system of basing decisions purely on quarterly results a good thing?
JohnD isn’t celebrating free market capitalism so much as Victorian era, who cares if a few folks die in the poorhouse as long as I’m making money, greed.
…you are once again solidifying the case FOR government regulation of these industries since according to you having someone initiate this in the market wouldn’t survive.
simplistic niave view of the world… and the business world. Insurance companies are not “evil”, they are businesses.
<
p>I think we are in for some interesting times as the announcement…
<
p>
<
p>Now, most insurance companies will cover examinations based on the recommendations from the government on annual physical exams, cholesterol, PSA… and you of course can get more frequent exams, but on your nickel. So what will happen when BCBS starts to go by the latest report from the US Preventive Services Task Force saying you should wait till 50 for a breast exam? I think insurance companies should stop covering breast exams immediately and put the money on more effective treatments and preventive care options. This would save a huge amount of money which so many of you believe we need to do.
Everyone else involved seems to be pushing back on this. Insurance companies are currently business, but they shouldn’t be, at least not in the same category as others. They should be heavily regulated precisely because the market alone can’t do it. Market is just one side of the equation and government needs to step in as a check and balance. You claim something won’t work because it won’t work in an unfettered market and on that point you may well be right. That is the cue for the government to step in and FORCE it to work DESPITE the market. That is what government is for – to assist and protect those people who cannot hold their own against the forces of a tyrannical market.
FOR IMMEDIATE RELEASE
<
p>Wednesday, November 18, 2009
<
p>Contact: HHS Press Office
(202) 690-6343
<
p>SEBELIUS STATEMENT ON NEW BREAST CANCER RECOMMENDATIONS
<
p>HHS Secretary Kathleen Sebelius issued the following statement today on new breast cancer screening recommendations from the U.S. Preventive Services Task Force:
<
p>”There is no question that the U.S. Preventive Services Task Force Recommendations have caused a great deal of confusion and worry among women and their families across this country. I want to address that confusion head on. The U.S. Preventive Task Force is an outside independent panel of doctors and scientists who make recommendations. They do not set federal policy and they don’t determine what services are covered by the federal government.
<
p>”There has been debate in this country for years about the age at which routine screening mammograms should begin, and how often they should be given. The Task Force has presented some new evidence for consideration but our policies remain unchanged. Indeed, I would be very surprised if any private insurance company changed its mammography coverage decisions as a result of this action.
<
p>”What is clear is that there is a great need for more evidence, more research and more scientific innovation to help women prevent, detect, and fight breast cancer, the second leading cause of cancer deaths among women.
<
p>”My message to women is simple. Mammograms have always been an important life-saving tool in the fight against breast cancer and they still are today. Keep doing what you have been doing for years – talk to your doctor about your individual history, ask questions, and make the decision that is right for you.”
They should examine the data further and either do something or don’t. She’s just punting. If self exams and mammograms are truly a good early detection of breast cancer than they should not only continue them but actually step them up. But if the data supports the U.S. Preventive Task Force then they should change policy and save money. The “feel good” aspect of the existing program is meaningless from a diagnostic standpoint.
<
p>I did hear someone say that increasing the age to 50 would surely cause a few women to be missed who have cancer. My question is why don’t we move the age down to 30 since surely there are a few women who would be screened between 30 and 40 who could be treated. I think the result will be a increasing curve by incidents/age and the real question will be at which point do we pay the billions to save x women.
You could take over the company from the bank and start a new “liberal” employee loving kind hearted ice cream business.
<
p>
<
p>Maybe their meanness is what drove them out of business.
<
p>Come’on, go for it! Get your libby friends here to finance your company and put their money behind their words. Be careful on providing too good of a medical insurance coverage though since you don’t want it to be considered a “Cadillac” or “gold” plan and get taxed. Also, you’ll have to check the other laws we have in MA about employee benefits. Make sure you use every possible green initiative and energy conservation/reusable source… expensive but worth it in the long run. We also have a higher sales tax than neighboring states and from what I’m hearing more taxes are a’comin. You might be tempted to hire illegals to give them a stepping stone (stepping on the jobs of legal immigrants and American citizens) but shy away as ICE is looking for law breaking companies who hire illegals. Sounds like your ice creams might cost $20/cone but I’m sure you’ll get the support of all your friends and comrades.
<
p>You could have a “big tent” plethora of flavors featuring “Barocky Road”, “Star Spangled” ice cream, “hubby hubby” and more ice creams to kick off your business!
<
p>I’ll be watching for your ads on MSNBC…
…since I believe minimum wage should be $10 per hour I would pay everyone at least that. I would try to provide benefits at least to full timers. I would follow the law regarding the hiring of non-citizens. I’ll keep prices competitive and take any hits to my personal bank account.
The Health Connector does cover students. You could purchase a Commonwealth Choice plan for your son. Your son is precluded from enrolling in a government-subsidized Commonwealth Care plan, however.
<
p>Also, did you know that the Health Care Reform law requires Massachusetts-licensed insurance carriers to cover children as dependents up to age 26?
…he is 28! But there is a lot of good information in this thread. Believe me, we spent plenty of time on the phone and this truly is a “black hole” in coverage.
<
p>If you you have some helpful links, why not add them to this thread – and the Globe article does NOT talk about payout rations, and does talk about profits, but by all means, lets share information.
<
p>Connecting people and sharing information is one of the revolutionary impacts of the internet.
I see the issues here: too old to be a dependent, yet a full-time student and therefore ineligible for Commonwealth Care. Go to the Health Connector site (www.MAhealthconnector.org)and click on the “individuals and families” icon to get some Commonwealth Choice quotes for your son. If he gets a plan and can prove he’s covered on his own, he won’t be required to enroll in the student plan offered at UMass. I’ll confess that I don’t know what it would take to get him disenrolled from the student plan, but you should act before he’s charged for the spring semester.
UMASS would not accept ANY of the connector plans. Honest.