Health insurers easy targets for angry president

President Obama has found a convenient whipping boy for all that's wrong with health care in America — insurance companies.

But his choice shows again the fundamental problem with his health insurance reform plan: It does little to solve the real problem with the U.S. health care industry, skyrocketing costs.

The president has been on the health care warpath this week, and health insurers have been in his line of fire. "Every day, they raise premiums higher and higher and higher," Obama told one audience Tuesday.

In Washington, meanwhile, Howard Dean fired up a group of protesters outside the Ritz-Carlton Hotel. "This vote is about one thing," he said. "Are you for the insurance companies or are you for the American people?"

Stealing a page from the tea party movement, Obama and the Democrats are trying to energize their supporters by tapping into a deep well of anger toward insurance companies. Why they didn't choose pharmaceutical companies, we'll never know.

Unfortunately, while insurers may share some of the blame, the real problem is health care inflation. Between 1999 and 2009, health care costs increased 131 percent. Wages, meanwhile, went up 38 percent and the overall inflation rate was only 28 percent.

Simply put, the real crisis is that we can't afford the health care we're receiving.

Are health insurance companies part of the problem? Probably, but they only account for 4 percent of total health care spending. Hospitals are responsible for 31 percent, doctors 21 percent and medications 10 percent.

Are health insurance profits obscene? The top four insurers had profits of $14.7 billion last year, which is certainly a very big number. But that's only a four percent profit margin, compared to 20 percent for drug companies.

But the volume of health insurers is so large, perhaps a 3 percent profit rate would be more reasonable. And that might shave a few billion off what is a trillion-dollar problem.

Meanwhile, the Obama plan — while promising a variety of new benefits for health care consumers — only vaguely suggests how prices will be controlled.

For instance, it says Medicare reimbursements will be cut by 21 percent for a savings of $300 billion. Who will eat those costs? Hospitals? Doctors? Recipients? No word on that in the plan.

In reality, Congress will never muster the courage to make those cuts. That would mean taking something away from somebody, and Congress rarely, if ever, does that.

Another example: Much of the revenue for the new plan would come from taxing high-end insurance plans. But that tax won't go into effect for eight years, which would leave it up to some future Congress to impose that unpopular measure.

Would it really happen? We doubt it.

The singular problem with the Obama plan is its lack of balance, its commitment to expanding coverage without a similar commitment to cutting costs.

And insurance companies aren't to blame for that.

editorialboard@sunjournal.com

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Comments

 's picture

My wife and I are both

My wife and I are both retired and above 65. Fortunately upon retirement I was given the option of maintaining my insurance coverage through my former employer. This included my wife when she retired. We are currently paying a monthly premium of 650.00 which includes prescription coverage. In addition we pay 220.00 monthly for Medicare A&B.  (Total monthly cost 870.00 plus deductibles) Thankfully we can afford it. BUT WHAT ABOUT THOSE WHO CAN NOT OR HAVE NO SUCH COVERAGE?) Shame on both the Republicians & the Democrats for selling America's future for THEIRS. We need to change our political system and it's two party corruption. Both parties are whores. Special interests such as Insurance and Drug companies own our elected officials. They buy them with gifts and campaign contributions (some, perhaps most, illegal) and these elected scum we send to represent us sell their self respect, integrity and lack of honor to the highest bidder.

 

 's picture

I'm a Republican and Obama is

I'm a Republican and Obama is right. Most of this mess was created by the greed of insurance companies.

PAUL ST JEAN's picture

Did you not read the

Did you not read the editorial? The average profit margin is 4%. Do you bounce off the walls with joy when you get a 4% raise? Not that big a deal is it? What is it about  a company, any company, making a 4% profit on their investment that is so horrible?

PAUL ST JEAN's picture

None of it is about health

None of it is about health care, anyway. EVERYBODY who needs health care in America gets it, with damn few exceptions. The issue is Health Insurance and who's going to pay for it, which is somewhat superfluous, because in the end, we (the working class) all end up paying for it one way or the other.

 's picture

Everybody?

Do they offer chemo and dialysis in the emergency room? How about insulin?

PAUL ST JEAN's picture

Lil, we're not talking about

Lil, we're not talking about prescription drugs, but anyone who needs ER care gets it; you know that. And, I did say, "with damn few exceptions. Did not say there weren't any.

RONALD RIML's picture

and the reason you cherish

and the reason you cherish the Freedom to Die without Health Care?

RONALD RIML's picture

Greg writes: "It is not the

Greg writes: "It is not the responsibility of my fellow Americans to make sure I have health care"

It is if your poor health threatens the health or well-being of any other person in this country. 

As you needed to resort to name-calling it's obvious you don't have a grip on a solid argument.

- And, yes.  The government can - and does - force you to buy against your will.  Often times you either don't know it, or have already accepted the fact. 

RONALD RIML's picture

Thanks for the apology. It's

Thanks for the apology. 

It's not a 'Lack of personal accountability' which has driven the quest for health care reform.

Consider that we are the only advanced, industrialized nation in the world that relies upon a 'private insurance' industry to finance one's medical care.

Why is that?

For years, "Insurance" was a benefit of employment.  That is no longer always the case.  One can either choose to buy 'Insurance' at practically unaffordable rates, or go uninsured and take their chances.

So who here is accountable?  And who are they accountable to?  Themselves?  Their families?  The insurance industry? Or health care delivery system which they make demands upon?

Who is the Insurance Industry accountable to?  The consumer?  Government?  The stockholders?

There are many stakeholders in this system - and each one raises the cost.

What is the purpose of a Health Care System?

Can it meet all needs?  Of course not.

So what must be cut.

Your turn. 

RONALD RIML's picture

Of course we're not 'Every

Of course we're not 'Every other Industrialized Nation"

Now I did throw a number of questions out there regarding insurance - which you essentially disregarded.  If I ask questions about stakeholders in the insurance or healthcare process, and you simply ignore them - then we're not accomplishing anything.

What you did bring up was the cost of drugs.  That's a valid point.  But it's also related to the entire subject at hand.  Our system of health care delivery is essentially 'Profit Driven' rather than 'For Service'

And that's why ours is so expensive.

You don't want the govt telling you what to do,  yet remark about self-destructive personal habits of others.  So who's got the power to  mandate and actually compel one to change their behavior beside government?

I agree we can't afford this Health Care Plan - not when it is enabling the very industry which is part and parcel of the problem - the Insurance Industry. 

I can live very well without Insurance - even though they allegedly have 'only' a 4% profit margin.  I can't manage without drugs.  Health care is every bit as important to this country as defense.  Yet while we account for approximetely half of the world's entire military spending, nineteen civilian amatuers were able to breach our defenses and kill 3,000 of us back in 2001.

The resources would be much more wisely expended on health care as other rational countries do.

You should pay for some other sorry S.O.B. because some day some other sorry S.O.B. will pay for the product of your spawning.

More later.

 's picture

Go easy

taxpayer, go easy on veritas. He might be on the other side, but he is level-head and someone you can have an intelligent exchange with.

PAUL ST JEAN's picture

The Pirate will drink to

The Pirate will drink to that...

 's picture

That's it Democrats...keep at

That's it Democrats...keep at this health care thing and the 2010 elections will bury you.  You won't see a majority for a generation...I can't wait for November. 

RONALD RIML's picture

Perchance do you draw your

Perchance do you draw your daily bread from the Health Insurance Racket Industry???

 's picture

Nope...I buy my own health

Nope...I buy my own health care through my employer and have no complaints.  They have always paid for my health care, the co-pays are reasonable, the deductible is fair, and I have never had a claim refused.  I have found them anything but a "racket."  If they start giving me a hard time, I'll buy it somewhere else.  I won't get that from the government...but let's not got there, we already had that conversation. 

PAUL ST JEAN's picture

It'll all be tied up in the

It'll all be tied up in the courts when the republican (you know, the bad guys) majority spends the next 4 years trying to repeal it. Gonna be quite a circus. Don't you love a good circus, T? Clowns, acrobats, and all that good music.

PAUL ST JEAN's picture

You're correct, Sonof Tron,

You're correct, Sonof Tron, (Geez that name shivers me timbers) they should cover all Americans under the same health inusrance plan that the members of congress have, OR, the House of Representatives and the Senate should be required to, as you put it, accept for their own coverage, the same crappy plan they force on us.

RONALD RIML's picture

Look how well blaming the

Look how well blaming the Democrats has kept the Republicans in office....  ;)

PAUL ST JEAN's picture

LOL...I like that

LOL...I like that

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