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The New York Times, March 7, 2010, (US enriches companies defying its policy on Iran, by Jo Becker and Ron Nixon) reveals that the US is supporting, primarily through government contracts, many companies that are involved in doing business in and with the government of Iran, a country that official US policy is to discourage companies from doing business with. Moreover, most of these corporations are doing business in the energy (especially gas and oil) sector, which is not a surprise given that Iran is a big oil producer, and also in supplying the technology for, say, developing nuclear power. Or nuclear weapons. A bunch of politicians are now posturing about this (after all, Iran is a fundamentalist Islamic state that is led by a Holocaust-denier who routinely attacks the US that many think is in the process of developing nuclear weapons), but we will see what, if anything, will happen.
So, maybe it is upsetting, but it is scarcely surprising. The US government supporting the interests of big multi-national corporations even when they are operating against the interests of the American people? If this is a shock to you, where have you been? We (the US, the world) are in the middle of (despite the pronouncements that we are “coming out of”) an enormous financial crisis brought about by the overt support by the US government of policies based upon supporting the unmitigated and unencumbered greed of the financial industry. And those policies, which have included trillions of dollars in bailouts of those companies, continue essentially unimpeded. If anyone is “coming out of” the financial crisis, it is those who brought it on, happily and blithely making their millions and billions again while a huge percent of people even in the US are unemployed, working in poor-paying jobs, and have no reasonable prospect of finding the kind of job that allows the dignity of supporting your family, having good food and a good home, sending your kids to college, and expecting a reasonable retirement. And, oh yes, having health care. The breadth of this crisis is spread wide, but those who were already poor and on the edge, disproportionately although scarcely only racial and ethnic minorities, have of course been the hardest hit. This is no joke and has people angry, angry at the financiers and angry at the government that has talked tough but not “walked the walk”. Democrats have a lot of blame, from the Clinton era policies to those of Obama and his recycled-Clinton financial advisors, but it is absurd for that criticism to be coming from Republicans. Not only was the Bush-era so aggressive in its de-regulation and support of the financial industry (and the energy industry currently involved in Iran) that it makes Clinton and Obama look good by comparison, but even now the Republicans in Congress are pushing policies that would make it even worse than those of the Administration. And that is not easy.
In health care, often the subject of this blog, the insurance industry is getting attacked. The President’s speech indicted them 13 times. But they are still there, they are still making billions in profits, and we still have at least 75 million people who are uninsured or seriously underinsured (and most of the rest of us who will find out when we get sick!). In response to great pressure, Anthem Blue Cross of California* (let’s not forget who the bad guys are!) withdrew, at least temporarily, its planned up-to-39% rate increases, but these guys are not going bankrupt, they are still making a fortune. It would not be too far-fetched to suggest that they proposed this just so they could roll it back, and make it look like they gave something up, in order to prevent people and regulators from demanding that they give up some of what they currently have. It wouldn’t be too far-fetched, but it probably underestimates their greed; I expect to see quieter efforts to increase rates return soon.
We have a conflict here. Politicians, Democratic and Republican, want to condemn the excesses of powerful corporations while continuing to take their money. Regular people, including me and a lot of teabaggers, believe the solution should be that portrayed by Wiley Miller in the March 7, 2010 comic “Non Sequitur”. (Check it out.) Somehow, we are being hosed; by the financiers, by the energy companies, by the insurance companies. (On the latter, and while we’re on comics, see “Shoe”, Thursday, March 11, 2010.)
Why would I be surprised?
*”Anthem” is the name that Wellpoint, the stock exchange-listed holding company, uses for the for-profit BlueCross/Blue Shield plans it owns, such as the one in California. Not all BC/BS are for-profit; many remain not-for-profit (e.g., BC/BS of Kansas, based in Topeka, KS, whose planned sale to Anthem was, I have previously noted, blocked by then-Insurance Commissioner Kathleen Sebelius in 2002, and BC/BS of Kansas City, based in KC, MO.) Unfortunately, market competition often has the not-for-profits behaving almost as badly, in terms of exclusions and rate hikes, as the for-proftis.
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Showing posts with label Anthem. Show all posts
Showing posts with label Anthem. Show all posts
Saturday, March 13, 2010
Saturday, February 13, 2010
Insurance company greed: To know them is to not trust them
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Anthem Blue Cross, a subsidiary of WellPoint of Indianapolis, has taken a lot of criticism for its proposed rate increases on its 800,000 individual policies in California (“Anthem Blue Cross dramatically raising rates for Californians with individual health policies”, Duke Helfand in the Los Angeles Times February 4, 2010, http://www.latimes.com/business/la-fi-insure-anthem5-2010feb05,0,3002094.story), to the extent that a follow-up article by Helfand on February 12 (“Anthem's parent company defends health insurance rate hike”, http://www.latimes.com/business/la-fi-anthem12-2010feb12,0,3807841.story) calls them “beleaguered”. They deserve to be. Their action is not only outrageous, it points out the absolute absurdity of thinking that a solution to the nation’s health care access problems can involve for-profit insurance companies.
Anthem announced increases of up to 39% on individual policies, but the WellPoint announcement adds insult to injury when it says “…that less than a quarter of affected Anthem customers in California will see rate increases of 35% to 39%. The average will be about 25%, while some customers will see rates fall…” Whew! Only 25% on average! Only a quarter of those affected will see increases in the 35-39% range. I guess those folks – and the rest of us because, as I will keep saying, we are all in this together! – can now rest easy.
In addition to investigations by the California Insurance Commissioner and possibly the Attorney General of the state, this one outrageous act has been the target of increasing criticism from the administration and from Congress. Rep. Henry Waxman, Chair of the Energy and Commerce Committee, announced hearings into the rate increase (http://www.speaker.gov/blog/?p=2149), and HHS Secretary Kathleen Sebelius is quoted by Helfand as saying “It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options.” Sebelius, who is absolutely correct, has a history with Anthem. In 2002, as Kansas’ Insurance Commissioner, she blocked sale of Blue Cross/Blue Shield of Kansas to Anthem because it was ”not in the interest of Kansans”, an extremely popular position with both the medical and hospital societies and with the public, and played a significant role in her election as Governor later that year.
It would be a mistake, however, to see the WellPoint/Anthem action as an isolated case of stupendous greed by one insurance company. It is an example of the widespread stupendous greed of all of the health insurance companies. The New York Times’ Katharine Q. Seeley (“Administration Rejects Health Insurer’s Defense of Huge Rate Increases”, http://www.nytimes.com/2010/02/12/health/policy/12insure.html) also quotes Sebelius, but also notes that the top 5 health insurance companies, WellPoint, Cigna, UnitedHealth Group Inc., Aetna Inc. and Humana Inc., “…had an average profit last year of 5.2 percent — for a combined total of $12.2 billion. This was an increase of $4.4 billion, or 56 percent, compared with 2008…” The data comes from Security and Exchange Commission filings, and is contained in a report by “Health Care for American Now” (http://www.healthcareforamericanow.org/). The report, at http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf, also notes that the “medical loss ratio” for these companies is incredibly low. As a reminder for regular people, the ones who pay the bills, the “medical loss ratio” is the percent of the premiums insurance companies collect that they actually have to spend on providing health care, that is, that they do not get to keep!
The medical loss ratios for these companies for 2009, notes Don McCanne in his wonderful “Quote of the Day” for February 12, were:
· WellPoint - 82.6%
· UnitedHealth - 82.3%
· Humana - 82.8%
· Cigna - 81.2%
· Aetna - 85.2%
Or, “…of the estimated $809 billion spent on private health insurance in 2009, the five biggest for-profit companies... captured $232 billion.”
In case you had any illusions that these insurance companies might have made a mistake, or be embarrassed, or in any way could be thought to be serving the public, the statements of WellPoint’s spokesman, Bart Sassi, should change your minds.
"We welcome the scrutiny and are confident that our rates reflect anticipated medical costs and are established consistent with actuarial principles and state law.". That means he thinks it is legal, not that folks can afford it. He adds that Anthem's insurance policies "remain very competitively priced when compared with the dozens of other plans competing in the California individual market." Competitive with the other huge rapacious insurance companies, that is. Oligopolies don’t compete.
Helfand (Feb 11) also reports that “Anthem is not the only health insurer imposing double-digit rate increases. Competitors such as Blue Shield of California and Aetna also have raised premiums significantly in recent years, insurance brokers said. But they said the impending Anthem increases are the largest they have seen.” But at least we know that they have a human side, and are empathic. "We care deeply about our California customers and community,"Sassi said, "Clearly, we understand that these increases create a challenge for many of our members." Not that they are going to do anything about it except raise rates. Words are cheap.
The real message here is that health care reform must happen, and that to include for-profit insurance companies as the centerpiece, or as any meaningful component, is absurd and will guarantee failure in both of its goals: meeting the health access needs of the American people and controlling costs so that medical care does not bankrupt us and prevent the society from implementing the other necessary programs essential to health. If not a government-run single payer plan (the best choice), any health reform plan that does involve insurance companies must require them to be non-profit, or at least closely regulated by the government regarding the services that they must provide and the prices that they can charge. One of these methods is used by every other developed country, all of which have better outcomes for lower cost than we do.
The physician and ethicist Howard Brody has written an important article, “Medicine’s ethical responsibility for health care reform – the top 5 list”, New England Journal of Medicine, Jan 10 2010;362(4):283-5 http://content.nejm.org.proxy.kumc.edu:2048/cgi/content/full/362/4/283, in which he calls on physicians to take a strong and concrete role in cost control by limiting the tests and procedures that they order to those which are evidence based. He suggests that each specialty, through its specialty societies, identify the “Top 5” procedures that are commonly done their field that are both costly and not evidence-based, and exert pressure on their members to refrain from doing them. Indeed, to keep. Brody’s ethical justification for calling on doctors to do this is that “Physicians have, in effect, sworn an oath to place the interests of the patient ahead of their own interests — including their financial interests.” He adds that, while insurance companies, along with pharmaceutical companies, have promised the President to cut their costs as a “contribution” to health reform, “None of the for-profit health care industries that have promised cost savings have taken such an oath.”
You can say that again. This latest round of premium increases to bolster their obscene profits also shows how false their promises were. From the Obama administration and its Congressional allies who have been trying to steer an impossible “middle course”, to the Republican who have united in obstructionism and whose only offering is more give-aways to the insurance industry, to the “teabagger” populists who fear big government but should fear the private insurers rapacity more, it should be clear: To know this is to not trust them.
.
Anthem Blue Cross, a subsidiary of WellPoint of Indianapolis, has taken a lot of criticism for its proposed rate increases on its 800,000 individual policies in California (“Anthem Blue Cross dramatically raising rates for Californians with individual health policies”, Duke Helfand in the Los Angeles Times February 4, 2010, http://www.latimes.com/business/la-fi-insure-anthem5-2010feb05,0,3002094.story), to the extent that a follow-up article by Helfand on February 12 (“Anthem's parent company defends health insurance rate hike”, http://www.latimes.com/business/la-fi-anthem12-2010feb12,0,3807841.story) calls them “beleaguered”. They deserve to be. Their action is not only outrageous, it points out the absolute absurdity of thinking that a solution to the nation’s health care access problems can involve for-profit insurance companies.
Anthem announced increases of up to 39% on individual policies, but the WellPoint announcement adds insult to injury when it says “…that less than a quarter of affected Anthem customers in California will see rate increases of 35% to 39%. The average will be about 25%, while some customers will see rates fall…” Whew! Only 25% on average! Only a quarter of those affected will see increases in the 35-39% range. I guess those folks – and the rest of us because, as I will keep saying, we are all in this together! – can now rest easy.
In addition to investigations by the California Insurance Commissioner and possibly the Attorney General of the state, this one outrageous act has been the target of increasing criticism from the administration and from Congress. Rep. Henry Waxman, Chair of the Energy and Commerce Committee, announced hearings into the rate increase (http://www.speaker.gov/blog/?p=2149), and HHS Secretary Kathleen Sebelius is quoted by Helfand as saying “It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone can justify massive increases that will leave consumers with nothing but bad options.” Sebelius, who is absolutely correct, has a history with Anthem. In 2002, as Kansas’ Insurance Commissioner, she blocked sale of Blue Cross/Blue Shield of Kansas to Anthem because it was ”not in the interest of Kansans”, an extremely popular position with both the medical and hospital societies and with the public, and played a significant role in her election as Governor later that year.
It would be a mistake, however, to see the WellPoint/Anthem action as an isolated case of stupendous greed by one insurance company. It is an example of the widespread stupendous greed of all of the health insurance companies. The New York Times’ Katharine Q. Seeley (“Administration Rejects Health Insurer’s Defense of Huge Rate Increases”, http://www.nytimes.com/2010/02/12/health/policy/12insure.html) also quotes Sebelius, but also notes that the top 5 health insurance companies, WellPoint, Cigna, UnitedHealth Group Inc., Aetna Inc. and Humana Inc., “…had an average profit last year of 5.2 percent — for a combined total of $12.2 billion. This was an increase of $4.4 billion, or 56 percent, compared with 2008…” The data comes from Security and Exchange Commission filings, and is contained in a report by “Health Care for American Now” (http://www.healthcareforamericanow.org/). The report, at http://hcfan.3cdn.net/a9ce29d3038ef8a1e1_dhm6b9q0l.pdf, also notes that the “medical loss ratio” for these companies is incredibly low. As a reminder for regular people, the ones who pay the bills, the “medical loss ratio” is the percent of the premiums insurance companies collect that they actually have to spend on providing health care, that is, that they do not get to keep!
The medical loss ratios for these companies for 2009, notes Don McCanne in his wonderful “Quote of the Day” for February 12, were:
· WellPoint - 82.6%
· UnitedHealth - 82.3%
· Humana - 82.8%
· Cigna - 81.2%
· Aetna - 85.2%
Or, “…of the estimated $809 billion spent on private health insurance in 2009, the five biggest for-profit companies... captured $232 billion.”
In case you had any illusions that these insurance companies might have made a mistake, or be embarrassed, or in any way could be thought to be serving the public, the statements of WellPoint’s spokesman, Bart Sassi, should change your minds.
"We welcome the scrutiny and are confident that our rates reflect anticipated medical costs and are established consistent with actuarial principles and state law.". That means he thinks it is legal, not that folks can afford it. He adds that Anthem's insurance policies "remain very competitively priced when compared with the dozens of other plans competing in the California individual market." Competitive with the other huge rapacious insurance companies, that is. Oligopolies don’t compete.
Helfand (Feb 11) also reports that “Anthem is not the only health insurer imposing double-digit rate increases. Competitors such as Blue Shield of California and Aetna also have raised premiums significantly in recent years, insurance brokers said. But they said the impending Anthem increases are the largest they have seen.” But at least we know that they have a human side, and are empathic. "We care deeply about our California customers and community,"Sassi said, "Clearly, we understand that these increases create a challenge for many of our members." Not that they are going to do anything about it except raise rates. Words are cheap.
The real message here is that health care reform must happen, and that to include for-profit insurance companies as the centerpiece, or as any meaningful component, is absurd and will guarantee failure in both of its goals: meeting the health access needs of the American people and controlling costs so that medical care does not bankrupt us and prevent the society from implementing the other necessary programs essential to health. If not a government-run single payer plan (the best choice), any health reform plan that does involve insurance companies must require them to be non-profit, or at least closely regulated by the government regarding the services that they must provide and the prices that they can charge. One of these methods is used by every other developed country, all of which have better outcomes for lower cost than we do.
The physician and ethicist Howard Brody has written an important article, “Medicine’s ethical responsibility for health care reform – the top 5 list”, New England Journal of Medicine, Jan 10 2010;362(4):283-5 http://content.nejm.org.proxy.kumc.edu:2048/cgi/content/full/362/4/283, in which he calls on physicians to take a strong and concrete role in cost control by limiting the tests and procedures that they order to those which are evidence based. He suggests that each specialty, through its specialty societies, identify the “Top 5” procedures that are commonly done their field that are both costly and not evidence-based, and exert pressure on their members to refrain from doing them. Indeed, to keep. Brody’s ethical justification for calling on doctors to do this is that “Physicians have, in effect, sworn an oath to place the interests of the patient ahead of their own interests — including their financial interests.” He adds that, while insurance companies, along with pharmaceutical companies, have promised the President to cut their costs as a “contribution” to health reform, “None of the for-profit health care industries that have promised cost savings have taken such an oath.”
You can say that again. This latest round of premium increases to bolster their obscene profits also shows how false their promises were. From the Obama administration and its Congressional allies who have been trying to steer an impossible “middle course”, to the Republican who have united in obstructionism and whose only offering is more give-aways to the insurance industry, to the “teabagger” populists who fear big government but should fear the private insurers rapacity more, it should be clear: To know this is to not trust them.
.
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