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What would happen if insurance companies had to spend more of your premiums on your health care? What if they couldn’t give your money to their CEO as a bonus, or use it on misleading advertising campaigns fighting health care reform?
Specifically, what if insurers spent 90% or 95% of your money on your health care, instead of the 81% they spend now?
Well, according to a new report from the Main Street Alliance [pdf], they’d be able to give their customers between $54 or $94 billion in rebates on our premiums, depending on whether that level was 90% or 95%. That translates into hundreds of dollars per person covered by private insurance.
The amount private insurance spends on actual health care tells the story of the Wall Street takeover of the insurance industry, and points directly to why private insurance is so bad for our health.
Only 16 years ago, health insurance companies spent almost all of the premiums they collected to pay for actual health services. The leading insurers used 95 cents of every premium dollar on medical benefits, according to the consulting firm PricewaterhouseCoopers, a benchmark the industry referred to as a 95 percent “medical loss ratio.” That was in 1993, the year President Clinton proposed comprehensive health reform. Within 12 months the insurance industry had torpedoed the plan and reform was dead. Experts correctly forecast it would be many years before Washington tackled the issue again.
Ever since, health insurance executives have pursued mergers, acquisitions and initial public offerings that have turned the for-profit health insurance industry into a juggernaut. Wall street investors cheered as private, for-profit companies grew at a feverish pace. CEOs spent lavishly on sales and advertising to win market share away from home-grown non-profits that traditionally had low marketing costs. In response, non-profits had to behave more like for-profits, stepping up spending on sales and marketing and intensifying efforts to exclude the sick.
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Along the way, health insurers’ medical loss ratios plummeted even as medical costs and premiums grew faster than overall inflation. By 2007 investor-owned health insurers had reduced spending on actual medical care to 81 percent of premiums collected, according to the analysis by PricewaterhouseCoopers, which often consults with the health insurance industry’s main trade group. The remaining 19 percent of premiums went to profits, marketing, executive salaries, administrative expenses, sales commissions, and the cost of weeding out sick people whose conditions might make them unprofitable to insure. Although the PricewaterhouseCoopers study gives an average for major investor owned insurance companies, other studies have found that in the individual and small group markets smaller insurers routinely have medical loss ratios that are much lower. A recent study of these markets found many as lowas 60 percent. By comparison, the public Medicare program has consistently had a benefit ratio greater than 97 percent since 1993.
The following chart neatly illustrates the problem:
Why has your health care gotten worse over the last decades since the insurance companies killed health care reform? Wall Street. Why have your premiums skyrocketed while they deny more of your care? Wall Street. Why are more Americans going bankrupt and dying every day because the insurance companies refuse to insure them? Wall Street.
Making sure the insurance companies spend at least 90% of your premiums on your health care is a start to fixing this problem. It’ll at least curb Wall Street’s influence over your health. Making insurers compete with a public health insurance option which, like Medicare, could spend 97% of its premiums on your health, would really fix this problem.
Of course, Joe Lieberman in the Senate is busy making sure the bill that body passes is as good for private insurance as possible. It’ll be up to the House of Representatives and leadership in the Senate to make the bill better for us when it gets to conference.
(also posted at the NOW! blog)
I’m proud to work for Health Care for America Now
28 Comments
uh Jason, think little Dougie Elmendorf took care of that 90% MLR problem
Now if only we could get the Dems to Screw Joe over by voting for 97% of insurance money be spent on healthcare and use the budget bill 51 votes to pass it.
Your facts and Stats would make for a great Dem PR campaign to justify why such action was necessary.
A pretty ridiculous expression of policy preference by the CBO indeed.
Jason, since you are “(I’m) proud to work for Health Care for America Now”, please share your opinion of this perspective by Josh Marshall(TPM): “There’s a rising chorus of progressive Democrats saying: with the bill so denuded and watered down it’s better to scrap the whole thing and try for real reform at a later date. In other words, no bill is better than the bill on offer now. But there’s a different pattern that I’ve seen over the past months.
I know a lot of people who’ve followed health care reform issues for years from the progressive side. And from what I can tell very few of these people feel this way. That’s not to say they aren’t very disappointed that various key policies likely won’t be included. Half a steak is always a big let down when you thought you might get the whole steak. But there seems to be a clear correlation between people who have followed health care policy closely for years (and know it inside and out) and those who think that even the scaled down reform bill is very worth passing.”
Personally, I think the Senate bill SHOULD be ‘killed’ and if it isn’t, then I think the whole world will see quite clearly how corrupt this nation is.
As Darcy Burner wrote “The fundamental failing of the newest Senate proposal is that it requires individuals to purchase health insurance, but does nothing to rein in what insurance companies charge. There is nothing to stop spiraling health costs from eating up an ever-increasing percentage of our national productivity.”
AND, it might actually do the Dem’s good for such to occur because of what is expressed here
“Everywhere Capuano went in his state, he said, he was bombarded with demands that the government do more to create jobs. He was also greeted by deep skepticism about Obama’s escalation of the eight-year-old war in Afghanistan.”
From my talks with folks out here in San Diego, they feel the same way and are disgusted with Obama and the Congress. Healthcare is important but jobs and a war they don’t support and are tired of dealing with are more important to them.
And when Steny Hoyer states “Faced with a likely public option-free health care reform bill from the Senate, Hoyer said House Democrats will vote to move the reform process forward without government-run insurance included.”, I say fuck it, forget about it.
The ONLY way Obama and the Senator’s will ‘get it’ -meaning what the citizens want, not what the insurance industry wants- IS TO STOP THE PROCESS IN IT’S TRACKS BY REFUSING TO PASS THE SENATE BILL.
I can only hope -knowing how neurotic that is- that all of those who still think Obama represents change finally realize that he is nothing but top bitch to the corporate pimps/powers; nothing more.
I’d say there’s no question that Health Care for America Now believes the Senate bill doesn’t conform to our principles for reform, that the House bill does, and that the bill coming out of conference should look much more like the House bill than the Senate bill.
“that the bill coming out of conference should look much more like the House bill than the Senate bill.”; why in the world do you -HCAN- think such will occur?
Step12: Conference Committee
“If the second chamber to consider a bill changes it significantly, a “conference committee” made up of members of both chambers will be formed. The conference committee works to reconcile differences between the Senate and House versions of the bill. If the committee cannot agree, the bill simply dies. If the committee does agree on a compromise version of the bill, they prepare a report detailing the changes they have proposed. Both the House and Senate must approve the report of the conference committee or the bill will be sent back to them for further work.
Step 13: Final Action – Enrollment
Once both the House and Senate have approved the bill in identical form, it becomes “Enrolled” and sent to the President of the United States. The President may sign the bill into law. The President can also take no action on the bill for ten days while Congress is in session and the bill will automatically become law. If the President is opposed to the bill, he can “veto” it. If he takes no action on the bill for ten days after Congress has adjourned their second session, the bill dies. This action is called a “pocket veto.”
Step 14: Overriding the Veto
Congress can attempt to “override” a presidential veto of a bill and force it into law, but doing so requires a 2/3 vote by a quorum of members in both the House and Senate.”
i call bullshit again on jason’s claim that the house bill conform’s to hcan’s principles. the very first principle includes “no one is left out” – which, as we all know is a damn lie for both the house and senate bills. judge the rest for yourselves below.
here’s what jason told me in april:
his link led to a statement that included the following (my bold):
p.s. it’s not like i haven’t brought this to jason’s attention before (see for example: here and here). that he continues to repeat the lie, after having it brought to his attention multiple times, imo says a lot.
I’m not saying it’ll be easy, or that we’ll get all that we want, but there is, I believe, room to make significant improvements in conference. And besides, what other options do we have?
Thanks selise. Attacking the House bill now just makes all kinds of sense.
telling the truth makes all kinds of sense.
Support killing both the House and Senate bills and come back next session supporting Medicare for All, which is what you HCAN folks should have done in the first place.
And, as we’ve discussed, is a naive strategy. Though I’m sure it’s finding converts over at Corrente.
You folks never learn. Attacking both bills makes a great deal of sense because we need progressives to put the pressure on the blue dogs and Obama. They need a bill, more than we do. Why? For two reasons.
First, they are under more electoral pressure to get a bill, but second, and more importantly, what’s left in these bills for ordinary people won’t begin to benefit them until 2013 or 2014. That means that if you care about improving conditions for people now, as progressives do, then there’s little to lose by killing these bills, since they do very little to help people now. There’s plenty of time to pass a bill that will help people almost immediately, if you kill these, and wait until next year.
So, why don’t you folks show a little intestinal fortitude for a change. Afraid you’ll be kicked out of the “veal pen?”
You have managed to remain civil and largely avoided sarcasm to this point throughout this entire debate, and that is admirable, despite our very divergent views about HC.
I urge you not to chuck that now.
You folks are really good at name-calling, but rather short of argument, aren’t you? The record of your miserable failure is clear in these two Senate bills and in the double-dealing efforts of the Administration create a bail-out for the insurance companies, rather than a health care reform.
As for Corrente, I do cross-post over there, and am finding many good exchanges with commenters, as I’ve also found over here at FDL. But, as for converts, I don’t think so. Seems most folks over there were already of the opinion that HCAN and other “veal pen” organizations have totally botched health care reform strategy long before I arrived.
In any event, as I think you may know my recent posts have been on the subject of “deadly innocent frauds” about deficits and other matters. A subject on which I think you and I may be in closer agreement than we are on HCR strategy and tactics.
Thanks newtonusr, I think it’s good advice. Sometimes my feelings do get the better of me. Btw, Jason’s feelings get the better of time when he starts throwing around labels like “naive.”
OK, alright. Enough. There has been no more feckless effort on behalf of HC reform than your beloved SP, and you have nowhere to run but to scold other ideas as cover.
Run away, please. This is ridiculous. You have nothing at all.
chris bowers has the numbers. he says the bill is unpopular. even a theoretical bill that is better than the house bill is unpopular.
if something like these bills pass, and the public hates them, the public will rightly blame dems including progressives since self identified progressives have been cheerleading obama’s plan all year.
i could see paying that price if the legislation were worth it (would help more people than it hurt, would move us closer to a real solution, etc) but doesn’t look like that’s the case.
but maybe jason is counting on all that corporate $$$ going to the dems to help overcome their bad governance when it comes to november?
Dude, it is well past time to stop the finger pointing.
You are not among idiots – your arguments that if ‘we’ take a moral position for SP, we will be unassailable if we fail – but that stance puts no one at risk, and risk is where you find opportunity, and reward.
This has to stop. SP was so unpopular that you can’t even get Dennis Kucinich to remain pure. Think about that…
We need to stop kicking each others asses over this.
Don’t worry. I don’t run.
As for whether SP or PO did a better job this year, I think it’s plain that the PO folks did a great job of raising money for themselves and helping the Administration shut SP out of the Press and out of the debate, but when it comes to getting health care reform, again, I think the record of almost total failure even with great funding and all the major left organizations on the PO side, speaks for itself.
You folks were great at the in-fighting, but when it comes to getting anything worthwhile done; not so much.
newtonusr, I’ve never taken the positions you’ve just attributed to me:
When have I said that anyone should “remain pure.” All I’ve said is that you start out with Medicare for All and fight as hard as you can for it, and then compromise, but only if you need to. I’ve also said that in judging whether you need to or not, you don’t start negotiations wth the idea that any bill is better than no bill. What I’ve said instead is that in any negotiation you need to recognize that certain terms are unacceptable and that when you get those terms you need to be ready to walk away.
If you think you can find citations that support what you claim my positions are, I invite you to quote them. My page at FDL is here.
I’m not against compromise, only pre-compromise. And I’m not against bills that do some good, only against bills that do more harm than good. That’s what we have now. Two bills that do more harm than good.
Finally, on the point that we have to stop pointing fingers at one another, I agree. But the way to do that is not to refer to others as “naive” or “pure,” or to call them other names that imply that they are not as savvy as you. Because when you do that, those people are going to reply by pointing to your own record of performance, and ask questions that are variations of “well if you;re so smart, then why ain’t you rich.” In other words, they’ll point fingers.
Now, just above, selise pointed out blatant contradictions in Jason’s positions over over time. To these very true claims Jason responded in less that a direct manner, since he directed attention away from her question about a contradiction toward a completely different, and accused her of not making sense. That’s what started the incivility. But I don’t see you attacking Jason for that. Do I?
well said. and thanks. i don’t want newt to attack jason though. i just want jason to stop repeating that untrue claim. and i guess if he doesn’t want to, the least i can do it point out the contradictions so that anyone reading this thread will have the necessary info to make their own judgment. i hate the idea of knowingly misinforming readers (and perhaps, being one myself, i take it a little personally too).
getting late, i’m out for now…. good night all.
Compare:
And, contrast:
Let me start with Dennis:
• You are not in support of any health care legislation that fails to achieve universal coverage, near or outright elimination of profit motives in the system, etc. ‘Single Payer,’ or ‘Medicare for All,’ or something like these under any name. But you are open to negotiations as to language that preserves the intent, or makes great strides towards that goal.
Stop me if I am in error.
• And one hope you have (or should have) is that at least some of the Congressmen will stay in the boat and fight like Hell for what you do support, or work tirelessly to bring down the whole mess if the compromises are too steep.
• Dennis Kucinich is (or was) a champion of health care legislation very similar to, or in lock-step with, what you envision. But Dennis is out. I watched him on a show last week – I am sure you know the appearance I am referring to – during which he said that he could support legislation that had no resemblance to SP, and stripped of the best part(s) (if there is such a thing now) of the PO.
Hence:
In the universe of ideas about health care reform, I know of no critter more devoted to SP then Congressman Dennis Kucinich. Had I said ‘devout’ instead of pure, this may not have been contentious between us. And by ‘you’ I meant you all.
My bad. But I think the point is clear.
••••••••••••••••••••••••••••••••••••
As far as the rest, here’s my take:
My memories of your ideas about countering Obama’s ticking clock (it was, after all, The President – not Democrats or Liberals or Progressives or Independents or Republicans or Congressmen or Senators – who decided to tackle HC at this time) are pretty fluid, but mostly they seem to be a mix of things that can be done long-term (and by long-term, I mean options that exceed the time constraints outlined by the President’s ambitions), combined with hazy allusions to the activism that will spring up when folks hear the words “Single-Payer.” If I missed any details about how your movement could have derailed that ticking clock in the near term, please tell me about them.
So your back is up against a calendar begun by the President, he himself has nixed SP and is on the record in favor of the PO, there is significant support in Congress for a Public Option, and the economy is in terrible trouble – what do you do?
If Single-Payer forces have money or foot-soldiers or street, you roll them out and blanket – what? Where? Everywhere you turn, politicians and pundits and voters are hi-tailing it in the other direction. The SP adherents in the House are blessed with conscience and ideas, but are too few to make a dent (and in case you didn’t notice, they settled). The Senate – forget it. The Executive – are you kidding?
And for crying out loud – where is your war chest and your ground-game?
The point is, if you had a plan to circumvent the process and corrupt Obama’s calendar back in the early stages, we would have heard about it, and you guys would have executed it. But.You.Didn’t. And now there is probably going to be a so-called health care bill.
The Public Option seems all but cold as stone. We got beat. Shit, we got clobbered. Rahm pulled it off. But I suspect he would have had an easier time derailing SP…
Wait – he did. Eleven months ago.
And there you sit with a full diaper, whining and throwing things at the people who actually DID SOMETHING, got bloody, threw punches, left it out there, because your ‘movement’ is so bereft of a leader or an army or the bucks or the god-damned public policy chops that it is driving you batty. You would rather have the high-ground and nothing to show for it, than expend a tenth of what others gave in pursuit of half.
So you have your so-called high-ground. You are welcome to it.
And those who looked at the clock and the calendar, and realized that doing nothing within the confines of the politics of THAT moment was unthinkable, get the scorn.
Hence:
Bully for you.
stop
AltHippo, I couldn’t agree more that there’s a conflict between the two statements, but why do you expect me to be disarm before peace is declared? I never said I was a unilater disarmament person.
newtonusr, You’re in error. Your post above has nothing to do with my reply to you. All anyone has to do to see that is to compare what I wrote with what you wrote, and also to note that you failed to quote from either a single one of my blogs, preferring instead to try to busty my reply under a mass of non-relevant words. To see the lack of relevance of your reply, I encourage readers to do that comparison between what I said and what you replied, and I leave them to judge whether I’ve taken the positions you attributed to me.
The fact remains that the those who followed the PO strategy over the past year have had every political advantage that a left of center movement might have had and they’ve still failed miserably. Time to take responsibility folks and learn lessons.