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Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released yesterday by the staff of the Senate Commerce Committee.

Three health-care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that do not cover needed care.

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don't trust the insurers.

"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health-care option," said Wendell Potter, who until early last year was vice president for corporate communications at the big insurer Cigna.

Potter said he worries "that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans."

Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter said.

The report released yesterday alleges that insurers have systematically underpaid for out-of-network care. The issue had been brought to light previously in litigation, committee hearings and other investigations, including a probe by New York Attorney General Andrew M. Cuomo. Cuomo described it last year as "a scheme by health insurers to defraud consumers by manipulating reimbursement rates."

As it turns out, insurers typically used numbers from Ingenix, a wholly owned subsidiary of the big insurer UnitedHealth Group. Ingenix had an incentive to produce benchmarks that low-balled usual and customary rates and shifted costs from insurers to their customers, the report said.

Insurers that contributed information to Ingenix often "scrubbed" their data to remove high charges, and Ingenix further manipulated the numbers, removing valid high charges from its calculations, the report said.

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Okay, this should really give a boost to those arguing that Dems should pass the public option via reconciliation — for the specific reason that it will make the Senate health reform bill more popular.

A batch of state polls by the non-partisan Research 2000 shows that in multiple states represented by key Dem Senators who will have to decide whether to support reconciliation, the public option polls far better than the Senate bill does, often by lopsided margins.

Here’s a rundown, sent over by the Progressive Change Campaign Committee, which commissioned the polls:

* In Nevada, only 34% support the Senate bill, while 56% support the public option.

* In Illinois, only 37% support the Senate bill, while 68% support the public option.

* In Washington State, only 38% support the Senate bill, while 65% support the public option.

* In Missouri, only 33% support the Senate bill, while 57% support the public option.

* In Virginia, only 36% support the Senate bill, while 61% support the public option.

* In Iowa, only 35% support the Senate bill, while 62% support the public option.

*In Minnesota, only 35% support the Senate bill, while 62% support the public option.

* In Colorado, only 32% support the Senate bill, while 58% support the public option.

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QUESTION: Would you favor or oppose the national government offering everyone the choice of a government administered health insurance plan -- something like the Medicare coverage that people 65 and older get -- that would compete with private health insurance plans?

FAVOR OPPOSE NOT SURE
OVERALL 68% 21% 11%
DEMOCRATS 82% 9% 9%
REPUBLICANS 51% 38% 11%
INDEPENDENTS 71% 13% 16%
CO-04 (Markey) 68% 20% 12%
FL-24 (Kosmas) 64% 21% 15%
MI-07 (Schauer) 69% 19% 12%
NC-08 (Kissell) 73% 16% 11%
NM-01 (Heinrich) 71% 17% 12%
NM-02 (Teague) 67% 19% 14%
OH-01 (Driehaus) 66% 26% 8%
OH-15 (Kilroy) 69% 22% 9%
OH-16 (Boccieri) 66% 23% 11%
VA-05 (Perriello) 67% 19% 14%

Even in swing districts, the majority of self-identified Republicans favor a public option. Like poll after poll, the numbers prove that the public option makes health care reform more popular, not less. The idea of a public option is incredibly popular with a broad cross-section of people, yet Democrats refuse to add it to health care reform as part of a reconciliation sidecar strategy.

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http://act.boldprogressives.org/cms/sign/frontlinepoll/

No doubt one can find polls going either way; this took a bit of time because I wanted to eomit polls from 2009, polls from what I know to be left-leaning sources like Washington Times, Huffington, etc., but I did my best.

I give you the profit margin statistics...they vary somewhat, but are generally within the 4% area. But this is "PROFIT" margin...which doesn't take into administrative and other salaries, pharmaceuticals, hospital costs, etc., which don't show in profit margins and many reports have pointed out that the health care received to gain this profit margin are reflecting less good health care results. The pharmaceutical compannies made a 16% increase in profit margin, as well ( http://www.usnews.com/money/blogs/flowchart/2009/08/25/why-health-insu
rers-make-lousy-villains.html). It's the overall cost of health care that is the problem, admittedly, not just the health insurance companies.

The numbers cited also don't take into account the results of health care costs on the economy:

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It started as a dull throb in the economy, with the pain growing sharper. Now there's finally a diagnosis: Runaway healthcare costs are directly harming businesses and their employees.

As just about everybody knows, the cost of healthcare is rising much faster than wages, profits, and most other things in the economy. Healthcare spending accounted for about 11 percent of GDP in 1987; today it's more than 16 percent, and by 2017 it's very likely to be almost 20 percent. We spend more than $2 trillion a year on healthcare—roughly the same amount we spend on housing—and the cost is rising about five times faster than wages or overall inflation. Exorbitant cost is the main reason 47 million Americans have no health insurance.

Somebody has to absorb those painful price hikes every year, and since companies provide the insurance for about 60 percent of Americans, they're the first to get the bill. Some economists believe that businesses simply shift the cost of health insurance to workers, by offering lower wages to compensate for the costly benefit, and to their customers, by charging higher prices to cover the costs of healthcare.

A new study, however, shows that some industries have become chronically hamstrung by rising healthcare costs, with lower growth and employment than they'd have if costs were lower—or somebody else paid them. Researchers Neeraj Sood, Arkadipta Ghosh, and José J. Escarce of the Rand Corp. analyzed the performance of 38 industries from 1987 to 2005 and found that sectors where a high proportion of workers have company-provided health insurance—such as manufacturing, utilities, communications, education, and finance—showed the lowest growth over the 19-year period. Industries where fewer workers get company-paid health insurance—such as agriculture, hotels, entertainment, retail, and construction—grew more.

Since some industries naturally grow faster than others, the researchers isolated other factors that could explain the discrepancy. They also compared U.S. industries with their counterparts in Canada—where the government, not business, pays for healthcare—to see if the entire industry was suppressed because of global trends or just the American slice. Their conclusion: Rising healthcare costs in the United States have directly curtailed growth and employment. And the industries with the most generous benefits tend to be penalized for it. "Industries which provide healthcare to a large fraction of workers didn't grow as fast as industries offering health insurance to a small fraction of workers," says Sood.

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http://www.usnews.com/money/blogs/flowchart/2009/08/04/industries-hurt
-most-by-soaring-health-costs.html

Also, those are overall figures, which differ from state to state:

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Indianapolis-based WellPoint as a whole posted a profit, recording net income of more than $4.7 billion in 2009, in part because of the sale of its NextRx pharmacy benefit management business, which accounted for roughly half of the company's profit.

That put WellPoint's profit margin at 7.3%, the highest of the five big insurers. Margins at the other four ranged from 3.4% for Louisville, Ky.-based Humana to 7.1% for Philadelphia-based Cigna.

Industry analyst Sheryl Skolnick, a senior vice president at CRT Capital Group, said many of the insurance companies would probably benefit from more customers in the long run.

But they are driven to raise prices for their health plans to satisfy investors, which in turn drives away customers.

"It is a terrible thing to run your business for Wall Street," Skolnick said.

"It creates very bad incentives, and it ultimately prevents you from doing the thing that is in the best long-term interest of your business. . . . There is no way that as long as these businesses are publicly traded, they can have the best interest of their customers at heart."

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http://www.healthkey.com/a-z/health-reform/sns-health-obama-profits-in
surers,0,5279091.story

There is no simple answer. But given all the factors I find, there IS one simple fact: Our health care industry is affecting all of us one way or another, and it's only going to hurt us more as time goes on. My point is SOMETHING needs to be done; to me the public option is the only way to give insurance companies competition, and it's competition which would provide relief from rising health care costs and the effects they have on our economy, our country and our people. If anyone has better answers, I'd love to hear them; I don't like the current bill, at all, but I believe that if a first step is made, more will follow.

Yes, I focused on health insurance companies, partly because they are the ones behind fighting so hard to defeat reform...ANY reform. That seems to indicate to me that they don't want any competition, and what they're doing, raising rates, dropping people, only hurts the country and the people worse. If nothing is done, I see them getting worse, as they'll have seen for the second time that their actions have killed reform, which pretty much means they can do whatever they like.



"I'm just right. Kinda like the sun rising in the east and the world being round...its not a need its just the way it is." The Delusional "Hero", 3/1/10

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The five largest U.S. health insurance companies
sailed through the worst economic downturn since
the Great Depression to set new industry profit
records in 2009, a feat accomplished by leaving
behind 2.7 million Americans who had been in
private health plans. For customers who kept their
benefits, the insurers raised rates and cost-sharing,
and cut the share of premiums spent on medical
care.1 Executives and shareholders of the five
biggest for-profit health insurers, UnitedHealth
Group Inc., WellPoint Inc., Aetna Inc., Humana
Inc., and Cigna Corp., enjoyed combined profit
of $12.2 billion in 2009, up 56 percent from the
previous year. It was the best year ever for Big
Insurance.
The outsize earnings are a vivid reminder that
without comprehensive national health care
reform the gatekeepers of our broken health
insurance system always will put the short-term
interests of Wall Street before the needs of millions
of patients and a national economy plagued by
joblessness.
The 2009 financial reports from the nation’s five
largest insurance companies reveal that:
• The firms made $12.2 billion, an increase of
$4.4 billion, or 56 percent, from 2008.
• Four out of the five companies saw earnings
increases, with CIGNA’s profits jumping
346 percent.
• The companies provided private insurance
coverage to 2.7 million fewer people than the
year before.
• Four out of the five companies insured fewer
people through private coverage. United-
Health alone insured 1.7 million fewer
people through employer-based or individual
coverage.
• All but one of the five companies increased
the number of people they covered through
public insurance programs (Medicaid, CHIP
and Medicare). UnitedHealth added 680,000
people in public plans.
• The proportion of premium dollars spent on
health care expenses went down for three of
the five firms, with higher proportions going to
administrative expenses and profits.

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The biggest barrier to enrollment is cost. High-risk pools are inevitably expensive because all of the enrollees have medical conditions that could potentially result in costly medical bills, which means the pools cannot spread costs across low-risk and high-risk individuals. Despite attempts to cap premium rates, the coverage is still unaffordable for many. In fact, a recent study found that premiums for high-risk pools are unaffordable for about one-third of eligible individuals. High premiums and high deductibles are often a greater burden on individuals with expensive medical conditions who have already spent large amounts of their income on health care.

Some proponents refer to high-risk pools as “safety nets,” but in reality, the pools do not provide a guarantee of coverage. Most have an exclusion period—some period of time during which an insurer can exclude coverage for certain medical conditions that exist before the insurer issues coverage. These exclusion periods can last anywhere from 90 days to 1 year. Some pools cannot afford to admit more individuals; they either have waiting lists or are completely closed to new enrollees. In the meantime, individuals with costly conditions must go without coverage.

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People facing those rate hikes are among the 26.7 million Americans who buy health insurance on their own. The coverage they get already is tenuous and expensive; it must be renewed every year or six months and costs more than four times more in premiums and co-payments than similar coverage under a group plan.

“These extraordinary increases are up to 15 times faster than inflation,” Health and Human Services Secretary Katherine Sebelius wrote in a letter to the company’s president.

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Research in the American Journal of Public Health estimates that 45,000 deaths per year in the United States are associated with the lack of health insurance. If a person is uninsured, "it means you're at mortal risk," said one of the authors, Dr. David Himmelstein, an associate professor of medicine at Harvard Medical School.

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Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings. This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college.

But medically bankrupt families with private insurance reported average out-of pocket medical bills of $17,749, while the uninsured's bills averaged $26,971. Of the families who started out with insurance but lost it during the course of their illness, medical bills averaged $22,658. "For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments, and deductibles that illness can put you in the poorhouse," said lead author Himmelstein. "Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy."

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The McCarran–Ferguson Act, 15 U.S.C. §§ 1011-1015, is a United States federal law that exempts the business of insurance from most federal regulation, including federal anti-trust laws to a limited extent. The McCarran–Ferguson Act was passed by Congress in 1945.

United States v. South-Eastern Underwriters Association (322 U.S. 533) came before the Supreme Court in 1944 on appeal from a district court located in north Georgia. The South-Eastern Underwriters Association controlled 90 percent of the market for fire and other insurance lines in six southern states and set rates at non-competitive levels. Furthermore, it used intimidation, boycotts and other coercive tactics to maintain its monopoly.

The question before the Court was whether or not insurance was a form of "interstate commerce" which could be regulated under the Commerce Clause of the United States Constitution and the Sherman Anti-Trust Act. The general opinion in law before this case, according to the Court, was that the business of insurance was not commerce, and the District Court concurred with the opinion.

In short, while not changing the opinion of prevailing law, the Court stated that the conclusion that insurance was not commerce under the law rested with Congress, and that the Court would follow the lead of Congress.

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Any enactment by Congress either of partial or of comprehensive regulations of the insurance business would come to us with the most forceful presumption of constitutional validity. The fiction that insurance is not commerce could not be sustained against such a presumption, for resort to the facts would support the presumption in favor of the congressional action. The fiction therefore must yield to congressional action, and continues only at the sufferance of Congress.

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On a private conference call, a group of top Tea Party and conservative organizers offered a surprisingly frank description of their goal, according to a source on the call: Completely blocking any kind of bipartisan compromise, and completely preventing any type of health care reform bill at all from ever becoming law.

The call consisted of representatives of top conservative groups, such as the American Liberty Alliance, the “Tea Party Patriots,” and RecessRally.com.

The moderator on the call, whose name could not immediately be determined, told listeners that bipartisan compromise on the Senate Finance Committee, where senators are holding talks, must be stopped at all costs. The moderator called on members to pressure GOP Senators seeking compromise with Dems, like Chuck Grassley, Mike Enzi, and Olympia Snowe, to stop the negotiating.

“The goal is not compromise, and ANY bill coming out this year would be a failure for us,” the moderator said.

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