The ink had barely dried on the new health reform bill when a new insurance company outrage came to light. A Texas couple has been denied coverage for a heart condition that their baby was born with; their insurance company, Blue Cross Blue Shield of Texas, considered the condition to be "pre-existing" and therefore denied the couple coverage.
This case was made for the headlines; how could a baby's congenital heart defect, which was present before it was even born, possibly be considered a pre-existing condition?
No matter-BS/BC had decided it was, and that was the end of it.
Well, not quite. The latest is that BC/BS, which has been publicly embarrassed by the media firestorm, has decided to reconsider. Which changes absolutely nothing in the big picture, because most people who get their coverage denied aren't lucky enough to have the media publicize their plight.
It was subsequently revealed that the heath insurance industry was already claiming that they had found a loophole which would enable them to avoid covering children with pre-existing conditions even after relevant provision of the reform bill takes effect six months from now.
And people are shocked. Shocked! Those who sold out true health care reform in order to get what they considered would be a political victory are already professing surprise that the bill in fact accomplishes very little, and does it at the price of handing over hundreds of billions of dollars of potential profits, bonuses, and waste to health insurance companies and their executives while doing little to rein in costs.
What did they expect?
There were three main objectives for health care reform, but the public was only told about two of them. Those three objectives were (1) universal coverage, (2) systemic cost reduction and (3) ensuring the profitability of the health insurance industry.
In reality, health insurance profitability predictably turned out to be the most important of these, at least for the people who were writing the laws. (These people were, in many cases, executives of those same health insurance companies.)
The truth is that in a universal coverage system, there is simply no reason to have insurance companies. Insurance companies earn money by discriminating between high-risk (healthy) and low-risk (unhealthy) customers.
This works out great with car insurance. State Farm discriminates between risky and safe drivers, and drivers who are extremely unsafe either can't get coverage or have to pay large amounts of money to be able to drive. We're okay with that, because we realize that people often have a choice about whether to be unsafe drivers, and, at any rate, society has determined that driving a car is not a right.
But our society long ago determined that access to health care is a right. This is settled. Medicare, Medicaid, the VA hospital, an array of tax deductions and the right to emergency treatment are all proof of this. The new legislation acknowledges that right. Health care reform is not a matter of establishing the right to health care; it's a matter of implementing it in a sensible way.
The point is that health insurance companies are essentially useless in a system which guarantees universal access. Useless, but not free.
Health insurance companies cost the system vast amounts of money. Consider the case of the Texas newborn. If the surgery that the baby needs to live costs $50,000, then it makes economic sense for BC/BS to spend $49,999.99 on lawyers to fight that claim. In fact, the executives of that company have a legal, fiduciary duty to do exactly that, because their duty is to maximize shareholder value, not to provide health care.
That $49,999.99 is essentially wasted. It will not be used to provide health care, and it is properly viewed as a drag on the system. Add in the money insurance companies spend on marketing, executive bonuses, return on shareholder capital, and administrative overhead, and you can start to see why the United States spends more money per capita than any other country on earth for a health care system that is ranked lower that of Costa Rica.
So why was primary objective of health care reform to ensure the continued existence of insurance companies? Because they make so much money that they can afford to buy off politicians and run marketing campaigns designed to convince voters that they are essential to the system.
They are not.
What can we do about it?
We should fight for single payer and eliminate the useless, expensive, for-profit health insurance industry. Single payer could be best defined as "Medicare For All." Rep. Alan Grayson has introduced a bill which would provide exactly that. He writes:
Let's face it. Health insurance companies charge as much money as possible, and they provide as little care as possible. The difference is called profit. You can't blame them for it; that's what a corporation does. Birds got to fly, fish got to swim, health insurers got to rip you off. And if you get really expensive, they've got to pull the plug on you. So for those of us who would like to stay alive, we need a public option.
In many areas of the country, one or two insurers have over 80% of the market. They can charge anything they want. And when you get sick, they can flip the bird at you. So we need a public option.
And they face no real competition because it costs billions of dollars just to set up a national health care network. In fact, the only one that's nationwide is . . . Medicare. And we limit that to one-eight of the population. It's like saying that only seniors can drive on federal highways. We really need a public option.
You can sign his petition here. And here is Grayson on the floor of the House explaining this bill:
The fight for universal, affordable health care has only just begun. A majority of voters favor a public option. But it will take a supermajority of informed, committed voters to defeat the powerful health insurance industry, who will fight tooth and nail against anything that improves your health at the expense of their bonuses and profits.
Sign the petition. Learn about the system. Fight for your health care.
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