And The Winner is…. The Medical Insurance Industry

By: Dr. Elaina F. George

The suspense is over. For weeks we have been holding our collective breath to see if there would be real insurance reform. Now we know. President Obama’s speech this evening incorporated a lot of different ideas, but what was most striking was his statement that the public option was just one of the avenues that could be travelled to achieve an expansion of insurance coverage. Besides the demotion of the public option as an important tool to reign in the all powerful insurance companies, I noticed that there was no mention of universal health care. Wasn’t that the point of this whole exercise?

To be fair there are some good things. Under the President’s proposal there will be:

§ Coverage for pre-existing conditions

§ A cap on out-of-pocket expenses

§ People can no longer be dropped from insurance companies when they get sick

§ No further cap on what insurance companies will pay out

It is a good start, but it doesn’t go far enough. The President spoke about slowing the growth of healthcare expense, but he did not discuss a reversal of the cost of health care. With the average medical insurance premium for an individual costing over 6,000 dollars and a family almost 12,000 per year, how does this help a middle or working class family both struggling to stay in their home and feed their family? Will it really help them to have mandates to purchase insurance at this price or face a penalty?

For those who cannot afford to pay for insurance and don’t qualify for government assistance this will amount to a new “tax” that can disproportionately affect the working class and poor who are already affected by barriers that obstruct their access to care. Currently of the 47 million people who are uninsured, 17 million of them are people who meet the financial criteria to receive Medicaid or Medicare. They are waiting to get into these programs, but because of state budget constraints or the wait associated with a shortage of physicians who actually still take these insurances, they are effectively out in the cold. I don’t see how the President’s proposal will ease this crisis.

As it stands, his proposal will ensure that insurance companies get millions more customers who have nowhere to go. Even those people who enter the ‘exchanges’ will also have to buy private insurance since the weakened version of the public-lite alternative will not come online until 4 years from now. Essentially, he is asking us to trust the insurance companies to play nice. The theory appears to be that by gaining more money in volume; perhaps they will charge people less? In a for-profit industry I am skeptical that this will work since it has not worked to this point. The insurance companies have had free reign and they have rigged the system to maximize profits on the backs of patients and physicians. Like Wall Street, they have now been rewarded for their bad behavior.