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Why do private, for-profit, Wall Street-run health insurance companies deny your care? Why do they drop your coverage if you get sick? Why do they raise your rates and limit your doctor-recommended treatments?
So they can make money.
One measure of how much money these private plans make is their "medical loss ratio," the amount of money they spend paying for the health care of their customers vs. the amount of money they pocket as profit. Obviously, if they pocket more money and spend less on care, they make larger profits and their Wall Street investors approve.
Since the insurance companies defeated health care reform last time around in 1993, their medical loss ratio has plummeted. As our premiums have skyrocketed, and we face more denials and rejections, the amount of your premiums private insurance companies spend on your care has dropped almost 15 points, from 95% to 81%. Compare that to Medicare [pdf], which has always spent almost 98% of the money it takes in on care:
This is just one of the many problems with private insurance. The relentless drive for profits and a lower medical loss ratio makes private insurers deny more care and find any way they can to spend less money on you and give more to their Wall Street investors.
This chart points to one of the advantages of a public health insurance option: More of the money you pay to it in premiums will go towards your care, seeing as the public option, like Medicare, won’t need to lower its medical loss ratio to make a profit for Wall Street, not to mention increasing competition and improving everyone’s care.
(also posted at the NOW! blog)
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10 Comments
Wow, it sure is a good thing we have the private sector around to show those gummint dummies in Medicare how to keep expenses in check! /snark
great argument for why we need single payer (hr 676, “improved and expanded medicare for all act”) or a massive level of regulation and enforcement (on the order of the swiss).
Fascinating statistics on number and percent of uninsured by profession. The data base is for CA, but has applicability nationwide.
Link thingy isn’t working.
http://www.sacbee.com/1098/story/2302298.html?appSession=256116000403491
Wow, very interesting, thanks.
Please use it!
Selise Thanks for putting 2 and 2 togther and coming up with 4. (Absolutely no snark intended) Not everyone can see the obvious.
So, as Anthony Weiner asks, “What do the insurance companies add to the transaction?” Nobody has ever been able to come up a good answer. Including, one might notice, Jason.
* * *
In other news, Jason shills for the”public health insurance option, by which I think he means [option|plan].[a|the][strong|robust]? [Federalist]? public [health insurance?] [option|plan]
Unfortunately, Pelosi prefers “consumer option,” so I think Jason really must mean [a|the][strong|robust]? [Federalist]? [public|consumer] [health insurance?] [option|plan]. Yay!
Jason, could you explain to us why Medicare’s 2% overhead cost is relevant to the “public option”? Are you telling us the PO’s overhead will also be 2%? If that’s what you meant to say, why didn’t you come right out and say it? If so, are you assuming the PO
* will be as large as Medicare (which now insures 15% of the population and pays 20% of US health expenditures),
* won’t have start-up costs or, if they do, they’ll be insignificant,
* won’t have to open offices in every major city in the US,
* won’t have to advertise,
* won’t have to hire a sales force,
* won’t have to assemble networks of providers and write contracts with them, and
* won’t practice any of the forms of managed care that will protect the PO from adverse selection but will drive its admin costs up?
If you’re making any of these assumptions, could you tell us on what basis?
If, on the other hand, the only assumption you’re making is that the PO won’t have to make a profit for shareholders, then why not simply outlaw for-profit insurance companies and turn the US health care system over to non-profit insurance companies like Blue Cross Blue Shield and Kaiser Permanente in CA and HealthPartners in MN?
Thanks.
Kip Sullivan
just guessing, but imo one can’t come out and say that because we could then easily prove it to be false. better to imply it without making an explict claim if the goal is to manipulate opinion rather than inform. reminds me of the run up to the iraq war when we repeatedly heard statements with both iraq and 911 included, the implication being there was some connection.
of course, as i’m just guessing, i could be entirely wrong — maybe there is some good explanation that i can’t see? sadly, the lack of a response does not make me confident that is the case.
oops. one of my cats just spilled my juice on my desk and i had to clean it up. just wanted to add that since the thread is still open, i’m hoping there will be a reply to kip’s questions that will clear up any confusion i may have.