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Back in the day, Congressional Democrats were saying that Health Insurance Reform was on the verge of passing, while Republicans were saying in effect, over our dead bodies. But there was no need to worry if the Health Care juggernaut steamrolled Congressional Republicans and flattened them like blue scary pancakes. These politicians all had high quality, Federally financed, socialized health insurance.  They were fine.  It was the rest of us that had a problem.

As a self employed person in Georgia who was only able to afford or obtain high deductible Individual health insurance, I found that it was impossible to obtain honest health insurance from a for profit insurer.  

This was true because for profit health insurance companies were not and are not part of  the health care industry, but the finance industry. For profit health insurance companies actually have a conflict of interest with their policy holders, because for profit companies have a primary fiduciary obligation to their stockholders  Health insurance companies only make money when they collect premiums, not when they pay claims. Thus health insurance companies have no incentive to render good customer service to their policy holders, in fact, just the opposite.

The huge premium increases that insurance companies historically imposed  in many states were actually not meant to gouge their policy holders, as some health care advocates proposed, but to induce the policy holder to drop their policies and buy insurance from another company. This is called churning, and it is an integral part of the for profit insurance companies business plan.

While these companies only signed up healthy people, denying insurance to anyone with a pre-existing condition, they have learned from experience that after two years, the number of claims are the same as if they had signed up a random collection of people. Thus, all policy holders have to go.

Conservatives like to quote the aphorism, “no one washes a leased car.” That actually has application to the health insurance industry as well. Since for profit companies only “lease” their policy holders, they have no incentive to pay for preventive care. That’s why the American health care system has been called a “sick care” system and why American health care outcomes compare so poorly with the rest of the civilized world.

High deductible policies for Individuals and small business owners are sometimes called “Catastrophic” insurance. That is an appropriate name. A person with such a policy faces potentially catastrophic financial and health outcomes if he or she falls ill. When premiums go up 40% as they routinely do with these policies, the chronically ill patient either dies or goes bankrupt  sooner or later.

Nor is it true that people get medical care even if they don’t have insurance as some Republicans say.  Studies have proven that uninsured people get less health care and the care they receive is not up to standard. Patients can’t get surgery or chemo-therapy in emergency rooms, and if the patient doesn’t have insurance or ready money, the hospital and doctors routinely sue the patients to collect their bills.

One of the “reforms” advocated by Republicans is to allow consumers to purchase health insurance “across state lines.” The companies that are pushing this policy change are some of the worst companies in the industry. The idea is to by-pass the barely adequate state regulations that ostensibly protect consumers. If a Georgia citizen’s legitimate claims are denied by an out of state company, he or she will have little recourse, which is the point of those Republican policies.  

Another “reform” advocated by Republicans is to allow citizens to band together in Associated Health Plans (AHP) such as the Blue Eyed Left Handed Retail Clerks of America. Supposedly the purpose is to allow consumers to purchase lower cost group insurance. But in practice, rather than being citizen centered, non-profit health insurance groups, these organizations will be front groups for ethically challenged for-profit insurance companies.

This is not a new idea. Back in the 1970’s, Congress allowed Multi Employer Worker Associations, MEWAs.  The resulting fraud amounted to hundreds of millions of dollars.

The true purpose of this idea is to allow for profit insurance companies to defraud more citizens more quickly and at less cost. In fact, the AHPs would  not offer real Group Insurance, but Individual policies. Group insurance is not more affordable because a bunch of like minded citizens band together to save money, but because the human resources department of a large corporation subsidizes  some of the costs,  handles most of the paperwork and absorbs the cost of  signing  up their employees.

Since for profit health insurance companies have a conflict of interest with their policyholders, and because they have no incentive to give good customer service to their policyholders, thus, for-profit companies engaged in business practices that resulted in millions of uninsured American  citizens and poor health outcomes.

So how will the Affordable Care Act (ACA) deal with the possibility that the for profit health insurance companies who are offering health insurance on the Health Care Exchanges will engage in these dubious business practices?

I fear that the authors of the ACA, most all of whom enjoyed either government sponsored health care or taxpayer subsidized health care at liberal foundations, don’t appreciate just how dishonest, shameless and corrupt the for profit health insurance businesses truly are.  

Did they anticipate that these companies would almost certainly continue to engage in their corrupt and fraudulent business practices?

Based on past and painful experience, I can predict that these for-profit companies will do exactly what they did in the past.

Here is what government officials and health care advocates need  to look out for going forward.  

Since the goal of the for profit health insurance companies is to collect at least two years of premiums, I predict that the first  round of premium increases will be a modest 5 to 10%. However, the third and fourth year will see increases go up exponentially.

If these for profit companies uses the same business practices that they did before the ACA, and that is the only way they know how to conduct their businesses,  policy holders will be given the option to raise the already too high deductibles, or switch to another plan. Most policy holders will switch to another health insurance company, thus, mission accomplished.  

Premium increases will be blamed on, in no particular order, an aging population, increasingly complicated and expensive medical technology, and Obamacare.  

Another technique these companies will almost certainly use will be to “take the money and run.” While the ACA will prohibit for profit insurance companies from canceling individual policies if the policy holder gets sick, unfortunately there won’t be any way for even the strictest government oversight to  prohibit  one or more of these companies from claiming lack of profits and canceling all the policies in a state. In Republican states, this will be business as usual.

In Georgia, insurance commissioner Ralph Hudgins  has already promised, or threatened, that he will not use any state resources to enforce any of the mandates of the ACA, which means it will be business as usual for the predatory for profit health insurance companies that have preyed on the citizens of Georgia for years.

Of course, all of this will be moot if Republicans ever regain control of the Senate and the Presidency. They will almost certainly gut the ACA consumer protections and allow the companies to re-institute the ban on pre-existing conditions, the reinstitution of insurance policy monetary caps and the elimination of the improvement in access to more affordable and comprehensive health care for women.

I support the efforts of Democratic legislators and elected officials to provide affordable and reliable health insurance to the citizens of this country who need it. But the shameful actions of most Republican legislators and governors to deny affordable and reliable health insurance to the citizens of their states should be a serious warning shot to progressively minded people that Republicans will never reconcile themselves to the reality of the  need for Americans to have the opportunity to enjoy affordable health care.

These Republican ideologues are still fighting to eliminate Food Stamps, Social Security, Medicare, Medicaid and other “entitlement” programs, and they will never stop trying to sabotage the Affordable Care Act.

Eternal vigilance is the price of freedom, and the guarantee of affordable health care.

Jim McMeans
Danielsville, GA 30633
jmcmeans@windstream.net

Originally posted to jmcmeans on Sat Jun 14, 2014 at 12:32 PM PDT.

Also republished by Obamacare Saves Lives and Community Spotlight.

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Comment Preferences

  •  You're forgetting the medical loss ratio-- (6+ / 0-)

    If more than 15% of the premium is used for anything other than medical care, it must be refunded.

    Millions of people got checks a few years ago.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Sat Jun 14, 2014 at 12:42:00 PM PDT

    •  The refunds started in 2012.. (5+ / 0-)

      .... if that qualifies as "a few years ago." And last year the cutoff was 20 percent, not 15.

      From a posting on whitehouse.gov on July 18, 2013

      Thanks to a provision in the Affordable Care Act, if your insurance company isn’t spending at least 80 percent of your premium dollars on medical care, they have to send you some money back.

      Today in the East Room, President Obama explained that “last year, millions of Americans opened letters from their insurance companies -- but instead of the usual dread that comes from getting a bill they were pleasantly surprised with a check. In 2012, 13 million rebates went out, in all 50 states." Another 8.5 million rebates are being sent out this summer, averaging around $100 each, he said.

      I worked for the Nader presidential campaign in 2000. I'm so sorry!

      by NYLefty on Sat Jun 14, 2014 at 04:41:22 PM PDT

      [ Parent ]

  •  85 percent applies to large groups... (6+ / 0-)

    I should have checked further before posting (instead of relying on whitehouse.gov).  From the AETNA website:

    In general, the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders. Some states have higher minimum MLR percentages.

    I worked for the Nader presidential campaign in 2000. I'm so sorry!

    by NYLefty on Sat Jun 14, 2014 at 05:08:23 PM PDT

  •  Nice diary! We can't take it for granted. (5+ / 0-)

    Hope Reps don't return to power until the ACA is entrenched and the now-not-ignorant public supports it by solid margins. Then they won't be able to do anything about it.

    •  You are right to worry (0+ / 0-)

      yeah, I'm surprised people are so sure we can keep our Obamacare. If voters realized just how fragile it is, they would get out and vote and be able to safeguard the benefits we've won.

      As you say, they chip at every other bit of a half decent deal for the 99%, a bit at a time, till we frogs are truly dying in boiling water.

      I just don't get what makes people so sure they won't mess with our Obamacare - if they get the Senate too, they will certainly do so.

      Maybe by reducing the subsidies so it's just not affordable for anyone... or by ending the ban on medical underwriting...

      Thanks Democrats! My Obamacare is permanent coverage no one can take away - and saving $3,000 is nice too

      by sotiredofusernames on Sun Jun 15, 2014 at 07:17:41 PM PDT

      [ Parent ]

  •  How About Relentless Action for Medicare for All? (3+ / 0-)
    Recommended by:
    dfarrah, jfdunphy, ladybug53

    Let's get to a system that really works for everybody without enriching greedy insurance companies.  

  •  Consumers can play a role by (1+ / 0-)
    Recommended by:
    ladybug53

    watching their doctor's bills for overcharges A study out by watchdog group ProPublica noted that their research found that too many of the 200 million office visits paid for by Medicare by doctors had been billed as more expensive "complex" office visits, rather than less expensive routine or moderate care visits. ProPublica mentions a tool called "treatment Tracker," where the consumer can get data on the performance of doctors using the Medicare system.  One of the aims of the Affordable Care Act (ACA) is to lower the cost of healthcare by wringing out the fraud, waste and abuse, another part is to raise the quality of care. If the provider is "upcoding," they are billing for a service not actually provided. Accredited or registered medical coders--whether they work for a hospital or a doctors office--are also subject to sanctions by their accrediting organization if the participate in submitting false or fraudulent records. So besides checking on the doc's record with medicare, you could also ask about the credentials of the medical coders supporting his/her medical practice. It adds an extra layer of protection for the consumer.

  •  lnsurance companies have legal teams (0+ / 0-)

    that routinely turn legislation into Swiss cheese.  They also knowingly bend the rules reasoning that the chances of being caught are slim to none and any possible fines would pale in comparison to the profits they'll make as a result.

  •  Eternal vigilance is a high price for progress (0+ / 0-)

    I'm just so damned tired of dealing with a major political party that seems to have no purpose except to work tirelessly to roll back any hard won progress the country makes. Abortion, voting, all safety net programs, and now add healthcare to the list. I'm beginning to think of them as a cancer that we must fight to keep in remission.

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