OPINION: Insurance companies think about one thing – money

The amount spent on health care was only $900 billion in 1992 when the for-profit medical establishment killed the Clinton Healthcare Reform Plan.
Today it’s $2.4 trillion, and the Bernie Madoff scandal was peanuts compared to medical costs. Similar forces are hard at work to kill any changes in our broken health care system.
We need to hear more about the positive benefits of other countries’ health insurance plans, not the scare tactics used by opponents of changes in our delivery systems. Could it be because we are the only country in the world that uses primarily a profit-motivated, employer-based health insurance system, which dates back to the 1930’s and has not structurally changed since that time? Should the main question not be quality health care for our citizens rather than huge profits for insurance companies, drug companies, hospitals and doctors? The question our country continues to ignore is, is health care is a privilege for those who can pay for it or a right for all our people?
Sweden, one of the healthiest countries in the world, spends less than half of the U.S. per capita on health care. Our country spends 20 percent to 25 percent of its GNP on health care, and our people are sicker and die off faster than any number of lesser countries. This proves the failure of our current system as it is not a medical care system, it is a medical scam.
Why is “medical inflation” more than twice the national average? The reasons are never debated in the media. The truth is we are being overcharged, over examined, and over medicated.
The present for-profit system is generally divided into group insurance coverage provided by employers, and individual health insurance policies. With group policies the individual is totally at the mercy of his employer and has no control over the type of coverage or plan that is provided. These plans can change without your knowledge, or your agreement. And if you lose your job, you can lose your health care, except for protection possibly provided by COBRA.
With an individual or family health insurance policy the individual has more control over their coverage, but they are paying 100 percent of the cost for the policy, and the policy has serious weaknesses allowing the for-profit insurance companies to change their plans, deny claims, raise the premiums, or withdraw from your state.
The motivation for the insurance company is to make a profit. Generally, for every premium dollar paid for group coverage at least 40 percent goes to insurance company administrative cost, with 5 percent to 10 percent going to profit, meaning only around 50 percent is used to pay claims.
Insurance companies use various ways to keep from paying claims such as pre-existing exclusions, inclusion of various deductible and co-insurance charges, and large case utilization review.
There are many other methods. With a for-profit company, their first goal is to make a profit for their shareholders, not provide medical care for you. Here is what they do with some of those profits. H. Edward Hanway, the Chairman and CEO of Cigna, made $11.4 million in 2008. The president of Aetna Insurance Company made $17 million, and John Hammergren of McKesson, one of the largest drug companies, made almost $30 million.
Wake up, America. While we worry about living from day to day, our health care costs keep rising, but insurance companies, drug companies, hospitals and doctors do not worry because they just keep raising costs, denying claims and making huge profits.
What we need is a whole new system that covers everyone and removes the enormous profit incentives. Medicare is a government run, single-payer health care system that really works well with 95 percent of the premiums going to actually pay claims. Medicare’s administrative costs are much less than the expenses and profits of an insurance company. The increases in benefit cost of Medicare are not due to administrative costs, but increased cost of overutilization. This single payer system would go a long way toward giving us health care for everyone, and at reasonable and controllable costs.
Bottom line reality is, as presented by President Obama, if we do not change the system in 10 years we will be in worse condition than we are today.

Dick Johnson is a longtime insurance professional. He is a Certified Insurance Counselor and a Charter Life Underwriter, both insurance business certifications. He resides in Tupelo where he is an entrepreneur and a private contractor in the insurance business. Contact him at dick.johnson@comcast.net.

Dick Johnson

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