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Health Insurers: Greed is Still Very Good

Don Rose 27 September 2010 No Comment

Just as the initial benefits of our bedraggled, hard-won health-care reform act are kicking in, the nation’s greedy health insurance companies are acting like, well, greedy insurance companies—proving again how much we really needed the public option that they helped demolish.

First off, a number of companies simply stopped offering “child-only” policies, especially for ailing kids with pre-existing conditions. That’s because one of the great benefits of the new law that just went into effect would make it mandatory for companies to insure those kids.

Fortunately, according to the New York Times, the market for child-only policies is relatively small and kids can be covered by their family policies—either through employers or private payments. The kids can also be covered by public programs such as Medicaid, where available, and by the new high-risk pools. But it clearly shows you where the hearts of those insurers lie—and how they lie about other things as well.

It’s highly appropriate that the sequel to “Wall Street” just hit the big screens. This is where Gordon “Greed is Good” Gekko is sprung from jail and finds himself among the new breed of Wall Streeters whose excesses are about to bring down the world economy. (All this is left-wing Hollywood fantasy, of course. How could a bunch of greedy Wall Streeters and their fellow insurance Gekkos such as AIG wreak such devastation?)

Cutting out policies for sick kids, however, is not the only damage the industry is doing. Wherever possible and to the greatest extent possible, the companies are raising premium rates excessively and trying to blame it on health-care reform.

In California, for example, Anthem-Blue Cross managed to get an average 14 percent increase in premiums past the state’s regulators—a raise that will hit up to 20 percent for some policy holders. Anthem is the state’s largest private for-profit insurance company. If the name sounds familiar, it’s the same one that tried to get a 39 percent boost earlier this year when reform was being debated. In Connecticut the same company just got an average premium increase of 22.9 percent, again blaming it on “Obamacare.”

It’s not just the greedy, highly political Anthem Company pumping up rates—numerous others across the land have received or are seeking similarly inordinate increases. Obviously some limited increases may initially be necessary because one of the act’s fine provisions lifts lifetime limits on how much a patient can receive for care, but what they are asking and getting is ridiculous. .

The Gekkoism metastasizing throughout the health insurance industry caused Secretary of Health and Human Services Kathleen Sibelius to write their national association, America’s Health insurance Plans (AHIP), admonishing its members to stop using lies and “scare tactics” by blaming huge rate increases on the Affordable Care Act.

Since the association and its membership originally supported the key provisions that kicked in on Sept. 23, Sibelius made the point that any increases in costs to the insurance companies will be minimal. Citing analyses by her department, others in the insurance industry and various academicians, she wrote:

“We estimate that the effect will be no more than one to two percent. This is consistent with estimates from the Urban Institute (1 to 2 percent) and Mercer Consultants (2.3 percent) as well as some insurers estimates.” She also noted that upward trends in health-care costs “independent of the legislation” have slowed.

So what’s going on here aside from pure greed?

Politics as usual, to coin a phrase. The Republicans are running on a vow to repeal health care. A phony pledge because even in their wildest dreams of taking back both houses, they know they can never win the overwhelming majorities needed to over-ride a presidential veto.

The insurance companies understand that, but would clearly like to see the GOP win this year in order to begin weakening the act at its edges, so they’re happy to play along by inflating their rates beyond reason and falsely blaming “Obamacare” and the Democrats.

This may, however, be a political miscalculation on the part of both the insurers and the GOP. All the evidence suggests the health act is gaining in popularity and acceptance as its benefits begin to be felt and better understood. Only a third of Americans want to see it repealed.

It might turn out that by making repeal the big issue, the Republicans might not wind up winning either house—providing the Democrats play it right. But that’s always iffy.

**

Don Rose is a regular columnist for the Chicago Daily Observer

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