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I'm an Anthem customer, and switching
Robert Reich
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TEXT OF COMMENTARY
Kai Ryssdal: The health care story this week hasn't really been health care, as such. Mostly because the overhaul bill is pretty much stuck. Instead, an insurance company out here in California has gotten most of the attention -- Anthem Blue Cross and its amazing rate increase.
As luck would have it -- lucky for us, that is, not necessarily for him -- commentator Robert Reich is an Anthem customer.
ROBERT REICH: I've had the same problems with Anthem that most people have with their health insurers: confusing bills, co-payments and deductibles that never seem to add up. They seem more interested in fighting me than helping me.
But now Anthem Blue Cross is going a step further with the increase in premiums as much as 39 percent. That's 15-times the rate of inflation.
Anthem says it has no choice. The recession has forced so many policyholders to drop coverage because they can't afford it that Anthem has to spread its costs over a much smaller pool. And too many of those remaining policyholders have greater medical needs than the average.
That sounds logical, but it's at odds with the soaring profits of Anthem's corporate parent, WellPoint. Anthem's argument is also questionable given that the firm has been among the most aggressive opponents of the health-care bills passed by the House and Senate. These bills would add tens of millions of Americans to insurance pools, thereby spreading the costs over more people and avoiding the very problem Anthem says is now forcing it to raise its rates so much.
Anthem obviously believes it can raise its rates this much and not lose every one of its remaining customers with average medical needs, which suggests Anthem doesn't face very much competition. Insurers, remember, are exempt from the federal antitrust laws. And WellPoint, Anthem's parent, is the largest insurer in America.
Anthem is a microcosm of our private for-profit health insurance system -- the most expensive in the world, whose costs are rising faster than anywhere in the world, rapidly becoming unaffordable to more and more Americans, and lobbying like mad against reform.
Anthem is also one of the best arguments for reform. What can be done in the meantime? A few days ago, HHS Secretary Kathleen Sebelius urged Anthem to disclose to policyholders how much of their premiums are going to profits, administrative overhead, and advertising instead of covering medical claims.
Well, I know what I'm gonna do. Next chance I get, I'm switching to another insurer. If I can. If that makes any difference.
RYSSDAL: When he's not fighting with his insurance company, Robert Reich is a professor of public policy at the University of California, Berkeley.
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If Anthem is lobbying against the bills currently before Congress, it almost certainly speaks for a majority of its customers, since those bills managed to unite the far left, the far right, and just about everyone in between against them. "Overhaul" is a fair description of them; "reform" is not. And if we have the most expensive health-care in the world, that's partly because we have this odd system where almost no one pays for it directly rather than paying insurance companies to bet against the certainty they'll need care, and partly because we have the best health-care in the world with waiting-lists rarities rather than the norm, so that people from countries with socialized medicine come here for care instead. Finally, if you think health care is costly *now*, just wait until you manage to ram through single-payer health care as a new entitlement.
I, too, am an unhappy customer of Anthem through the University of California. I want to add that It's not as easy as some might expect to simply change insurance companies as deductibles get higher and higher, particularly if you have a serious, chronic illness, and even if you're covered through a large institution. Switching means finding out if your doctors, your home-health care people, a spectrum of specialists, etc. will take whatever new insurance plan you decide to switch to. Many won't. So, if you have a serious illness and confidence in the doctors who have treated you for a number of years, switching to a new plan becomes more complicated. We switched to the HMO version of Anthem in January in order to cut our skyrocketing costs, and it's been a huge hassle, involving finding a new preferred provider unfamiliar with my husband's complex medical history and giving up doctors we've used for a number of years. How is this good health care?
So, I don't get why Professor Reich doesn't go out and advocate for a single payer system, and I don't understand the insistence on private companies doing this job. What is it that insurance companies do that is so special anyway? They figure out the likelihood that a person will get sick, how much money their executives need in pay, how much return their shareholders are demanding, and then charge a premium. Seems to me that if you cut out the shareholders and the executives, you might charge lower premiums.
G. Totten writes: "I wish Professor Reich would backup some of his arguments rather than making arbitrary statements based on unsupported assumptions."
Totten then goes on to state his own "hunches" and "suppositions".
It's amazing to me that so many people who post don't see the "mite in their own eye".
I wish Professor Reich would backup some of his arguments rather than making arbitrary statements based on unsupported assumptions. My big beef is with his accusation that this is a symptom of monopolistic behavior. "Largest" insurer does not imply "only" insurer. I don't live in California and haven't done much research, but my hunch is that there probably are plenty of competing insurer's that could offer lower rates to snatch up individual customers. Raising rates in lockstep among insurers would be more indicitive of an abuse of the insurance industries anti trust exemption. Furthermore, I'm quite surprised Professor Reich is purchasing individual insurance, as I would assume its provided to him by the university he is employed by. Are cuts in UC budgets forcing them to stop providing benefits to their professors? It seems to me the problem preventing him from switching employers is a function of the employer based system, and not a lack of competition. Could we have Professor Reich clarify these arguments?
This resembles the ‘death spiral’ scheme for individual policies: The insurance company raises rates a lot, healthy people find cheaper insurance, but sick people can't, so they stay and pay the higher rates. Soon, the rates increase again, and people with serious health problems stay with the company, while more of the healthy leave. Eventually even the sick can't afford their policies and become uninsured.
So the company wins, it doesn't have to pay the big health bills any more. And it's raking in money from healthier people who, when they become too sick, may lose their insurance.
Unfortuntely, given the obesity epidemic in the US, a lot of people will be in that sick category soon: sick, lots of bills, and can't afford insurance.
Individual health 'insurance' in the US too often resembles gambling, where the odds favor the house. Can it be otherwise and still make a profit?
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