Gas at $4 per gallon (or higher) has left working families very cautious about using their cars during a time of falling wages, food-price increases and widespread economic insecurity. Similarly, millions of Americans with health insurance are now afraid to actually use their insurance to seek treatment.
The reason: Employers have successfully shifted a huge portion of costs to their workers, so working families face such a daunting barrier of high deductibles and co-pays that they have become reluctant to go to the doctor or the hospital or request a particular course of treatment.
The nation’s major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.
The plight of typical patients was outlined in a Times interview with a California grocery worker:
For someone like Shannon Hardin of California, whose hours at a grocery store have been erratic, there is simply no spare cash to see the doctor when she isn’t feeling well or to get the $350 dental crowns she has been putting off since last year. Even with insurance, she said, “I can’t afford to use it.”
In just nine years, the cost of family coverage has doubled, from $9,235 in 2002 to $19,393 in 2011, Maxwell Strachan reported in the Huffington Post:
Take away costs paid by employers, and the employee's share of costs has still doubled. In 2010, the average employee paid $8,008 for his family's healthcare, up from $3,634 in 2002…. Of that $1,319 increase [in the last year], employers … paid for 48.6 percent of the increase, while the additional 51.6 percent was the responsibility of employees.
That $8,008 may easily consume 20 percent of many working families' incomes, meaning that rising health costs are fattening the profits of insurers while forcing families to cut back severely on spending, even for necessities.
A 'DEFECTIVE AND UNRELIABLE' PRODUCT
For-profit health insurance is a product that is “both defective and unreliable,” as Dr. Steffie Woolhandler of Harvard Medical School aptly depicted it.
Particularly disturbing is the growing trend toward high-deductible insurance, which provides no insurance until a very high level of expenses has been paid by the hapless family stuck with such a policy. These policies are spreading rapidly:
In 2010, about 10 percent of people covered by their employer had a deductible of at least $2,000, according to the Kaiser Family Foundation, a nonprofit research group, compared with just 5 percent of covered workers in 2008.
But while it is the worst of times for some, it is the best of time for those in the healthcare insurance industry.
Thanks to what CIGNA called “lower usage” that allow insurers to retain more premium income; profits are once again on a trajectory to set ever-higher profits.
Thus, insurers are directly profiting from Americans avoiding needed tests on troubling or suspicious health conditions, leading inevitably to patients being in a far more acute state when they can no longer put off seeking treatment.
Further, for-profit insurers continue to aggressively “purge” small-business accounts from coverage whenever someone in the group comes down with an illness that is expensive to treat, observes Wendell Potter, former CIGNA public-relation director and author of Deadly Spin. As Potter explains:
The purging of less profitable accounts through intentionally unrealistic rate increases helps explain why the number of small businesses offering coverage to their employees has been declining for several years and why the number of Americans without coverage reached a record high of nearly 51 million last year.
According to the National Small Business Association, the number of small businesses that provide health insurance to their employees fell from 61 percent in 1993 to 38%.... Along with “rescinding” (cancelling) the policies of individuals who become seriously ill, purging small businesses that employ workers who get sick is a tried-and-true way of meeting Wall Street's expectations.
But even when seemingly sitting on top of the world with an ever-growing streak of record profits and the prospect of 30 million new customers required to buy insurance under the Affordable Care Act (ACA) passed into law last year, the for-profit insurers are pushing for more. As the Times' Abelson noted,
Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends…Because they say they expect costs to rebound, insurers have not been shy about asking for higher rates.
In Oregon, for example, Regence BlueCross BlueShield, a nonprofit insurer that is the state’s largest, is asking for a 22 percent increase for policies sold to individuals.
NEITHER 'SHARED SACRIFICE' NOR 'SHARED PROSPERITY'
The writing on the wall could not be clearer: the health insurance industry is not interested in either “shared sacrifice” via lower profits (i.e. lower premiums) or “shared prosperity” through covering the uninsured.
In sharp contrast to the incredibly slow implementation of the Affordable Care Act passed by the Democrats last year (it won't be fully implemented until 2014), Medicare managed to be up and running 11 months after passage in 1965, a feat all the more astonishing given the lack of computers were not universally available.
America's healthcare crisis—acutely felt by both the insured and uninsured—is getting worse. It will continue to do so, and even with the ACA in full effect, isn't likely to reverse course.