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Insurance Industry: The Parasite That Feeds on US Public Health System

Dave Lindorff

As the country contemplates a major reform and restructuring of the
way we run our national health care system (if it can even be called
that), it needs to be pointed out that the mammoth health insurance
industry is nothing but a parasite on that system.

Health insurance companies add zero value to the delivery of health
care. Indeed, they are a significant cost factor that sucks up,
according to some estimates such as one by the organization Physicians for a National Health Program,
as much as 31 percent of every dollar spent on medical services (a
percentage that has been rising steadily year after year).

Insurance companies are damaging in more ways than simply cost, though.

They also actively interfere in the delivery of quality medical
care, as anyone who has had to battle with some "nurse" on the phone at
an insurance company to get required pre-authorization for needed
procedure can attest. Just recently, the editor of a local weekly
alternative paper in Philadelphia, Brian Hinkey, the victim of a near
fatal hit-and-run accident last year who spent several days in a coma,
and has been working hard to regain the use of all his limbs and
faculties, reported in an opinion piece in the Philadelphia Inquirer on
how his insurer after a few successful weeks of in-hospital rehab,
denied him coverage for six critical weeks for out-patient rehab
services, though every specialist on head injuries knows that early, consistent therapy is crucial to recovery of lost brain function.

This kind of human abuse is standard operating procedure for
companies whose bottom lines are fattened the more services they can
deny to insured clients. My own father, once doomed by a metastasized
cancer following prostate surgery, was saved by a procedure offered by
a physician in Atlanta that his Blue Cross plan in Connecticut refused
to pay for. He had to finance the expensive treatment himself.

Now these medical system parasites are suddenly running scared,
because it is clear that if everyone in America is to be guaranteed
health insurance coverage-a promised goal of the new administration of
President Barack Obama, and, according to polls, the desire of a large
majority of the American people-they are going to stand exposed as a
costly impediment to achieving that goal.

Insurance companies have managed to stay profitable and at least
somewhat affordable to the private employers and workers who, together,
have to pay for them, by denying care not just to policy holders, who
are denied certain tests and treatments but especially to those who
have known ailments, who are simply denied coverage altogether.

For decades, people with "pre-existing conditions" have been either
barred from coverage, or have had to sign waivers that excluded them
from getting coverage for treatment of those pre-existing conditions.
In the worst case, which is all too common, people have ended up dying
because they couldn't get treatment for common and easily treated
ailments like high blood pressure or diabetes.

Now we hear that two big insurance trade groups, the Blue Cross and
Blue Shield Association and America's Health Insurance Plans, have
offered to "phase out the practice of varying premiums based on health
status in the individual market" in the event that all Americans are
required to obtain health insurance.

Well sure they're doing that. If they didn't, the government would
force them to! The insurance industry, in saying that it would not
price sick people out of coverage in a nationally-mandated health
insurance scheme, is merely recognizing the political firestorm that
would arise if it were not to do that, and were to force the sick and
inform onto some government insurance plan, subsidized by taxpayers,
while they just cherry-picked the healthy population, as they've been
doing now for decades.

The whole point is that if everyone is included in the insurance
pool, instead of only the healthy population, then the overall cost of
being chronically or critically ill to the individual is spread over
the whole of society. Premiums get adjusted accordingly.

Medicare is the model. Here we already have a government plan that covers every single elderly and disabled person.

If we were to simply extend Medicare to cover everyone in America,
we would essentially have the Canadian model of health care (which, it
should be pointed out, costs half what we pay in America for health
care when private insurance and government programs are added
together). As with current Medicare, the government would pay for
treatment, with private doctors and hospitals providing the care, and
with the government negotiating the permissible charges. That, in a
nutshell, is what "single-payer" means-the government is the single
payer for all health care. It doesn't mean, as the right-wing critics
claim in their scaremongering propaganda, that people would be forced
to use certain doctors and certain hospitals. Far from it. That's what
private HMOs do.

Medicare is efficient (only 3.6% of Medicare's budget goes to
administrative costs, compared to 31% for health care delivered through
private insurance plans), its clients like it, and doctors and
hospitals accept it.

We should not be tricked by this seeming sudden appearance of
decency on the part of these corporate parasites. There is simply no
valid reason for preserving the private insurance industry's role in
any health care reform plan that is aimed at giving everyone access to
health care in America. The Obama administration needs to jettison its
"free market" fetish when it comes to health care. The financing of
health care for all Americans can all be handled much better by the
government. Medicare has proven this. Other countries-Britain,
Australia, France, Canada, Taiwan and most other modern nations have
proven this.

Leave the insurance industry to handle our car insurance and our
life insurance. It has no more place in the delivery of health care
than do tapeworms in the digestive process of our bowels.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Dave Lindorff

Dave Lindorff

Dave Lindorff is a Philadelphia-based journalist and columnist. He is author of "Marketplace Medicine: The Rise of the For-Profit Hospital Chains" (BantamBooks, 1992), and "The Case for Impeachment" (St. Martin's Press, 2006). He is the founding editor of ThisCantBeHappening.

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