Congressional committees heard a lot this month about the devious schemes used by health insurance companies to drop or shortchange sick patients. It was a damning portrait — and one Americans know from painful personal experience — of an industry that all too often puts profits ahead of patients.
As health care reform moves forward, Congress must impose tighter regulation of companies that clearly are not doing enough to regulate themselves. Creating a public plan could also help restrain the worst practices, by providing competition and an alternative.
A House oversight subcommittee took a close look at a particularly shameful practice known as “rescission,” in which insurance companies cancel coverage for some sick policyholders rather than pay an expensive claim. The companies contend that rescissions are rare. But Congressional investigators found that three big insurers canceled about 20,000 individual policies over a five-year period — allowing them to avoid paying more than $300 million in medical claims.
The companies typically argue that the policyholders withheld information about pre-existing conditions that would have disqualified them from coverage. But the subcommittee unearthed cases where the pre-existing conditions were trivial, or unrelated to the claim, or not known to the patient. When executives for the three companies were asked if they would be willing to limit rescissions to cases where the policyholder deliberately lied on an application form, all said they would not. This tactic will not be ended voluntarily.
If only I could believe it is not true. But of course it isn't. The insurance companies, doctors, pharmaceutical companies all have no financial interest in you being healthy. The insurance company wants only to take your premium, not to pay a claim on it. The doctor is rewarded financially only if you are one of the many people shuttled through his office (and only if your insurance— or you!— will pay). Pharma only makes money if you take the high-margin pill.
If we are to solve the problem of health care costs in the context of a market-based system, we have to change the profit incentive to one where your care-giver makes money when you don't need care.
Otherwise, we're probably better off with single-payer. Yeah, there will be rationing. We already have that today. We just have a different name for it. We call it poverty.
Just chew on that for a while.