Health insurers make money one way---by collecting more in premiums than they pay out in claims. New laws prevent health insurance companies from refusing to write anyone a policy because of a pre-existing condition. That means if Joe Smith, a heart transplant patient on dialysis decides to sign up for Insurance R Us, Insurance R Us pays his bills. Period. Eventually, all of the nation's sickest people will be on private insurance, which will subsidize the cost of caring for the chronically ill by collecting premiums from a bunch of healthy people tp pay for the sickest. That is how it supposed to work in theory.
Few people who brag about "the best health care system in the world" realize that we have two parallel health insurance systems in this country. One is paid for with private dollars. The other is paid out of public funds. Each is about the same size, and each is larger than the total per capita health care expenditures of a country like Canada. That's right. We have socialized medicine in the U.S. It takes care of the sickest people. We also have a for profit system. It costs just as much--and it takes care of most of the healthy people. That means, per capita, we spend twice as much as any other industrialized nation. And neither group---"sick" nor "healthy" does as well as the average French citizen.
The new health care laws are designed to get the chronically ill off publicly funded insurance and into private plans. However, the privates, like United Health, Cigna, Blue Cross Blue Shield do not want congestive heart failure patients and dialysis patients and people suffering from multi-infarct dementia. And they have found a new way to turf these undesirables to some other plan---and eventually, back onto the public dole.
It's simple as pie. Sign up lots of members. Figure out which doctors and hospitals treat the sickest. Drop those doctors and hospitals from your plan. Cite "inefficiency" as the reason. Offer to let the patients who are losing their doctor and hospitals drop your insurance and sign up for a competitor's plan. The sickest of the sick--the ones who need their specialists the most---are the ones who will jump at the offer of changing to a different plan, even if it means paying a little bit more. And, suddenly, Cigna's dialysis patients become United Health's money sink. Meanwhile, the healthy people, who seldom use their insurance, will change doctors without batting an eye.
It happened last month in the northeast. It is happening tomorrow in my home town. Next month, it may happen in your city. The doctors and hospitals targeted will be those which serve the neediest communities---inner cities, minorities, the poor, the elderly, rural areas. And each time an insurer realizes that many of its "higher utilizing" patients see a certain group of doctors, because these are the doctors who specialize in treating poor, sick, minorities and people with catastrophic diseases like cancer, multiple sclerosis, lupus, heart failure, that insurer will drop the providers from their plan.
Doctors and hospitals will quickly realize that if they are to remain enrolled in private insurance plans, they will have to stay out of areas where the poor live--since poverty and illness go hand in hand. The suburbs will have a doctor glut. The doctors and hospitals will be careful not to locate on a public transportation route---that would allow low income people access. They will have gyms and lots of dermatologists. They will recruit in country clubs.
Where does it end? It doesn't. Not until every inner city doctor is off every private plan and every dialysis and heart patient is back on traditional Medicare or Medicaid. Meaning that the nation's private health care premiums will go to line the pockets of private health insurance company executives----who will be able to deduct their own, inflated "quality assurance" costs from the 85% they are supposed to spend on patient care. Meanwhile, we will spend general revenue funds--tax dollars--paying for most of the actual health care.
Ask yourself, why do we need the privates when the public plans are going to do all the work? Answer: we don't. If a single payer is paying most of the bills, then what you have is single payer. Paying money to those who do not intend to pay the bills is just corporate welfare.