More Proof Big-Profit Insurers Doomed; Single Payer Coming Sooner Rather Than Later

[kpete]

Yet, a report issued this week by, of all places, the conservative Galen Institute, reveals that you can’t judge the long-term viability of an industry by its current share price. Indeed, the results of the Galen study highlight that the exodus of insurance companies from the health insurance business may be happening far more quickly than I imagined.

Among the many companies that are dropping out of the business —rather than comply with the MLR requirements that would force them to actually spend an appropriate share of the premium monies received from customers on real health care— are some of the nation’s largest carriers.

Principal Financial Group had already announced late last year that they were leaving the health insurance business, impacting on some 840,000 insured.

Another key player in the business, Cigna, has decided to quit the small business market in states like California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kansas, Missouri, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas and Virginia.

MORE:
http://www.forbes.com/sites/rickungar/2011/12/28/more-proof-that-the-american-for-profit-health-insurance-model-is-doomed/



So, like it or not—as the growing exodus of insurers from the marketplace bears out—government, single-payer coverage is coming.

The only question is whether we will get out in front of the problem that will be created by private insurers bailing or wait, as we often do, for the system to collapse.
http://www.dailykos.com/story/2011/12/28/1049496/-Rick-Ungar:-More-Proof-Big-Profit-Insurers-Doomed;-Single-Payer-Coming-Sooner-Rather-Than-Later?via=siderec

[FreakinDJ]

1. Greed is such a wonderful thing

[Geoff R. Casavant]

2. Simple, elegant argument that goes to the heart of the "free market" issue.

"If an insurance company cannot make money while holding onto 15 to 20 percent of every dollar they take in, why should they continue as a business? Wouldn’t the free marketers argue that if a business model cannot profit on so wide a margin and still offer an acceptable product, the business does not deserve to survive?

"The simple reality is that the health insurers can only function at a profit —and a small one at that—by denying needed care to their customers so that they can cover their own administrative costs. This is the model that Obamacare opponents, such as the Galen institute, seek to perpetuate— despite the fact that it clearly no longer works to the benefit of customers or society as a whole."

So simple, so logical. How is it that the Teabaggers and Repubs can't see this?

[soryang]

3. Good!

Private for profit, employment based health care insurance is one of the major structural defects killing our economy. Elimination of this inefficient and coercive industry can't happen soon enough.

[Modern_Matthew]

4. The 1% will devour themselves...

And I don't think they see it coming from that bubble in which they live.

[Lint Head]

5. Excellent. Insurance companies are nothing more than banks.

In the past insurance was for property. Profit should never be a part of life or death or health, period.
Insurance companies have spread like a virus getting it's tentacles around the money associated with health.
It was a golden day for companies like Equicor, AETNA. BCBS and more when it became a 'requirement' that employers with a certain number of employees had to offer healthcare insurance as a part of their benefits.

Eliminate private insurance companies from health care and start Medicare for all. Private insurance companies always have and always will continue to service the federal contracts for Medicare but profiting from death and disease would end. There would still be and always will be fraud but that is human nature.

[cpamomfromtexas]

6. They used to be in it to invest excess when market profits were unbeatable. Oh well.

[peacebird]

7. My favorite line "if a business can't survive on 15 - 20% profit margin does it deserve to survive?"

If we could get single payer, OR let healthy older workers like me buy into Medicare coverage at fifty-five then I would be able to retire and younger workers (who cost less) could be promoted up to my position. It would be a win win scenario for everyone. Unlike what the Repukes are proposing, raising the age of retirement....

[soryang]

9. Experienced workers and professionals could go into business for themselves too.

The outrageous financial burden of health insurance premiums is a dead horse on the backs of those who want to start their own businesses. This is why the billion dollar corporations love employment related for profit health insurance, it kills the competition (and freezes their experienced labor force in place even though compensation is static or reduced). The entire economy and employment suffers from the lack of small business formation.

[gateley]

14. Norman Goldman sometimes talks about putting together some kind of an insurance

plan that would be affordable for the masses (and, not sure, but maybe somehow help those who can't afford it?).

[bvar22]

8. Health Insurance Corporations:

*Manufacture NOTHING

*Create NO Wealth (value added)

*Provide NO service


Private Health Insurance Corporations should NEVER see a dime of "Public Money".
They WILL receive a windfall in 2014 when 40 - 70 MILLION Americans are MANDATED to BUY
their near worthless "Bronze" (Junk) Policies.
Those MILLIONS of already hard pressed Working Class Americans won't be happy,
and they WILL blame the Democrats.





You will know them by their WORKS,
not by their excuses.
[font size=5 color=green][center]Solidarity99![/font][font size=2 color=green]
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[cbdo2007]

10. Possibly...but who do you think is going to manage "single payer"?

They'll farm it out to the insurance companies who will work as contractors for more than they're making now.

[MedicalAdmin]

11. Good analysis. I disagree with the conclusion.

It is more likely that they are trying to force a capitulation, and given the twin facts that Washington always capitulates and that health insurance companies are specifically exempt from the Rico laws, nothing will be done vis a vis single payer.

No, single payer is not coming. What is coming is either capitulation, or the first step in removing health care from the great unwashed masses.

Consider for a moment that walmart is getting into primary care and shudder at the obvious conclusion.

[riderinthestorm]

12. I too disagree with the conclusion. It just means more and more Americans without health insurance

Mark my words, employers will stop offering it as a benefit.

Why should they continue to offer it when in 2014 everyone will be mandated to purchase it? Employers won't continue to offer it out of the goodness of their heart - it's too damn expensive, it's a royal pain to administer, and the company can save a bundle on whacking out that portion of its HR department that's dedicated to the company health insurance racket.

This OP underscores that obtaining health insurance will become even more unaffordable and unavailable to Americans but that won't mean single payer. We have a long way to go after 2014 as more and more employers shed their health insurance benefits until we hit maximum pain for most Americans (if ever - that's presuming the PTB give a damn about the pain of the average American).

[MedicalAdmin]

13. Yes.

And the scenario you present, along with being likely, is also the likely precursor to armed uprising.

Fighting for your life or that of your family focuses ones rage, and Americans are nothing if not heavily armed.

This is the one issue that will make or break this country. And my money is going to be bet on break. In that I am in the company of Goldman Sacks who, I have no doubt, are working dilligently to ensure it.

[gateley]

15. The END result just may be single payer. If millions lose their coverage, they will

demand something be done -- like a Medicare for all.

[Bill USA]

16. RECOMMENDED!!!

[CANDO]

17. I went to the ER Xmas night with nasty abdominal pain.

I was passing kidney stones. Throughout the year of 2011, I payed CIGNA nearly $5,600 for family coverage. Because of the $2,500 deductible, I will surely pay for all expenses from this episode. In less than a week, I start all over again from $0 with meeting the $2,500 deductible for 2012. I don't have health "insurance". I don't know what it is, but it is not insurance. My wife and I sat and discussed money issues and payment options with my follow up Physician today. He said the profession is approaching a crisis point because of the intense pressure they are under from all sides. They simply cannot focus on making people well. They spend every day jumping through insurance guideline hoops and trying to help people get the cheapest care, all the while trying to do that without getting sued for malpractice for skipping diagnostics. What a fucking nightmare it is to actually get sick in this country.

[dawg]

18. The last two or three health insurance companies standing wll make out like bandits.

The ACA gives them a guaranteed customer base and allows them ample room for overhead and profit. They simply need to retask the employees and resources currently dedicated to denying coverage and claims, and retask those workers to something more productive.

[Tsiyu]

19. Look for a bunch of CEOs to pay themselves obscene bonuses somehow

right BEFORE they bail.

Insurance does not exist to provide affordable health care.

It exists to make a few people very wealthy...now that they can't play that game, they will reward themselves nevertheless.

[tridim]

26. They can't do that any more. The ACA made it illegal.

[Tsiyu]

30. On paper they can't you are correct

That's why I put the qualifier of "somehow" in there

The greedy can always find a way, no?

But I do understand the law makes the blatant bonuses a thing of the past...

(But somehow, don't you think they will weasel around the law? )

[freshwest]

20. It's really built into the law Obama signed. That's why the GOP's went nuts.

[Honeycombe8]

21. Sounds like scare tactics by rightwingers. The Sky is Falling.

And all because of Obamacare. Has nothing to do with business practices of those companies or profitability issues in this recession, as have affected so many other businesses.

When other businesses jump ship or fail, it's Obama's fault because of the bad economy.

When ins. cos. jump ship or fail, it's Obama's fault because of Obamacare.

It's never the fault of Republican policies that caused the recession, or bad business practices, or failure to be competitive, or the so-called free market. As Romney says, some businesses make it, and some don't. That's what the free market is all about! And if Romney said it, you know it must be true! (sarcasm)

[dflprincess]

22. The companies mentioned all have diverse business

When UnitedHealth Group announces it's folding then I'll believe we're on the way to single payer. In some ways this is bad news as it will limit what little competition there is and just push more people into the clutches of UHG and others like it.

As for Cigna dropping small business - they all hate small business policies and, the smaller the business the less they want to write a policy for them. When I was at UHG broker commissions were subtley structured to encourage agents not to sell to small business.

[brewens]

23. Where did large medical insurance companies come from in the first place?

That's a question I've asked friends in the business. Those companies exist because businesses started giving medical insurance to employees as a benefit. They didn't want to do that but the workers organized and made them want to!

I said the way things are going, eventually their jobs will be in jeopardy. Eventually things have to shake out so that people get health care for what they can afford to pay. No way we continue to allow a middleman to take a huge rake off the top.

I just have an average Joe type job in the industry, working for a blood center. I know I want to keep working, so do all the doctors and nurses. We all just want to keep being paid. Guess who get cut out?

[Downwinder]

24. Most of them started as mutual funds.

Last edited Fri Dec 30, 2011, 03:24 PM - Edit history (1)

Policy holders owned the companies. The company was there to administer the funds. Then they were taken public through IPOs and/or internally generated takeovers.They were regulated by state agencies and allowed a ten percent over expenses profit. Now they complain about a twenty percent limit.

They followed the same pattern as the Savings and Loans and they will go the same way.

[tridim]

25. Some might even call this result multi-dimensional chess.

Do you get it yet?

It's obvious that for-profit health insurance is pointless for everyone but the insurance company CEO and his stock-holders. Obama knew that he couldn't legally shut them down wholesale, so he found a way to do it legally. It is freaking genius if you ask me, and it is really a miracle that HCR passed at all.

BTW, I predicted this would happen "sooner rather than later" before HCR passed. I'm pretty sure I even placed bets with several DU'ers.

[joeybee12]

27. Of course we'll wait until the system collapses before we do anything...

Not planning ahead is the American Way!

[tridim]

28. The HC Exchange is the "planning ahead" mechanism.

Think.

[ProSense]

29. Actually,

"Of course we'll wait until the system collapses before we do anything...Not planning ahead is the American Way!"

...states like Vermont are "planning ahead."

Vt. gets $18M for health exchange
http://www.pnhp.org/news/2011/december/vt-gets-18m-for-health-exchanges