Insurance

&quotThe Way Insurance Companies Have Rigged Our Health Care System, Theyre Probably Going to Emerge as Financial Winners from This&quot – ProMarket

author and former health insurance executive wendell potter explains to promarket why the employer-based health care system in the united states is “collapsing” and why health insurance companies see the covid-19 crisis as a “net saving”.

A record number of Americans (6.6 million) applied for unemployment benefits last week, the Department of Labor reported today. This brings the total job losses in the United States in the last two weeks to almost 10 million, a staggering number that highlights the serious economic impact of covid-19.

Reading: Why are insurance companies so corrupt

Making the blow even worse is the fact that millions of recently unemployed Americans likely also lost their health insurance, since most workers (nearly 150 million) receive health insurance through their employers. a similar situation occurred in 2007-2009, when 9.3 million Americans lost their health insurance. the difference is that the current crisis is expected to get much worse, and of course the great recession was not accompanied by the largest pandemic the world has seen in over a century.

For author and former health insurance executive turned whistleblower Wendell Potter, a longtime advocate for reforming America’s health care system, this unfolding crisis shows how “incredibly unreliable” it is. the employer-based framework that has defined care for decades really is.

“It’s extraordinary. we’ve never seen numbers like this, and it highlights the importance of decoupling our health care from the places where we work,” he says. “Any rational person would see that there is absolutely no point in having his medical care associated with his employment. we are always one layoff away from being uninsured. now we’re seeing millions of people affected in a single week, and economists say it’s likely to get worse.”

What this means for the millions who have now lost their jobs and health coverage, he adds, is unclear, but it’s not good. “For the millions of people who have lost their jobs and joined the ranks of the unemployed, the options are not so good. some employers have extended benefits for a short period of time, but the trump administration has said it will not reopen exchanges for people who become unemployed.”

Before becoming a whistleblower and one of the health insurance industry’s most vocal critics, Potter worked as vice president of corporate communications at Cigna (an experience he wrote about in his 2010 book deadly spin ). in recent years, he has co-authored a book on the corrupting influence of money in politics, nation on the take, founded the non-profit news site tarbell , and is now the president of medicare for all now, a nonprofit organization that advocates for universal health care.

In an interview with promarket this week, Potter discussed how the current structure of the US health care system. uu. the covid-19 crisis is getting much worse, and he spoke about the “accelerating collapse” of the employer. based on the model, and explained why the health insurance industry sees the coronavirus as a potential “net saver.”

[the following interview has been edited for length and clarity]

Q: What has this crisis taught us about the us healthcare system? US, compared to others around the world?

has taught us that the employer-based system through which most Americans get their health insurance is incredibly insecure. The number of uninsured will increase significantly this month, and that’s solely because we rely on our employers to provide access to health care.

Another thing is that insurance companies actually run our health care system. they are increasingly the gatekeepers of health care, and more and more of us are not getting the care we need because of the practices of the health insurance industry. the way they manage to pay or avoid paying claims is to erect barriers for people to get the care they need. The end result is that people often put off seeking care, and that’s especially problematic during this pandemic.

p: Allowing millions of people to lose their health coverage during a global pandemic doesn’t seem like a very reliable way to run a health care system.

that’s exactly right. it’s a system that has been slowly collapsing, and I think we’re going to see an acceleration of that collapse.

The only entity that really supports the continuation of the employer-based health system is the health insurance companies, because they have made huge profits from employers for many years. Employers are growing weary of shouldering the burden of providing access to workers and their families.

This has been a problem for many years. During the Democratic debates earlier this year, we heard some of the candidates say that 149 million Americans have coverage through their workplace and they don’t want to lose that. Of course, no one wants to lose coverage. But what they didn’t tell us was that 20 years ago, in 1999, some 160 million Americans got their coverage through their employers; it is now down to less than 150 million. During those 20 years, as the US population grew by about 50 million, the employer-based system experienced a steady decline.

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q: less than a month ago, after the coronavirus had already reached the us. In the US, Democratic leaders like Joe Biden and (then-candidate) Pete Buttigieg still extolled the trustworthiness of our current employer-based system. even now, when it is sweeping across the united states, some politicians are still fiercely opposed to changing it in any meaningful way. how do you explain that?

you’re right; it was even less than a month ago that candidates on the democratic debate stage extolled the virtues of our employer-based system.

I think that was before there was a lot of public awareness of how this pandemic is going to affect us, so they were able to get away with using the scare tactics that the industry has been peddling for many years and quite frankly, the talking points i used to write when i worked for cigna.

p: for example?

for example, that Americans don’t want to have a “government-run health care system.” that’s a term we use specifically. when we talk about moving to a better health care system, we’re talking about replacing our multi-payer system with a publicly funded health care system, not a government run one, but the insurance industry has been very successful in scaring to the public.

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They can also influence candidates, including Democrats on the debate stage, with large campaign contributions. they benefited significantly from large campaign checks and were very willing to voice insurance industry talking points to keep that money invested in their campaigns.

q: I used to be a health insurance executive. What was (or is) the role this industry played in getting us to where we are today?

there are several things. First, the insurance industry has no interest in making sure everyone is covered. They don’t want to cover people who have conditions that would lead to extensive treatment, so they have ways to prevent people from getting the care they need, or even signing up for health insurance. many people in this country, even if they can technically get health insurance, just can’t afford it. That’s mainly why we still have 30 million people in this country who don’t have insurance, and that’s before this pandemic started.

The other thing is a big reason why I left the industry, and that’s because I was expected to be a cheerleader for high deductible plans. we had a euphemism for these plans. we call it “consumer-driven health care”; the plans were called “consumer-driven health plans.”

What insurance executives (including me) were saying back then was that the reason health care costs are rising so much is because people use too much health care. we were able to persuade businessmen, individuals and policy makers that this was the real problem. in other words, the insurance industry was pointing the finger of blame at ordinary Americans, saying they needed more “skin in the game.” they were very successful in selling that. Unfortunately, I was part of that effort to persuade employers that the way forward was to move people from the plans they had to these high-deductible plans.

That industry-wide strategy has been extraordinarily successful. Now, most people with private insurance are on high-deductible plans, and most people just don’t have the money in their checking accounts to meet their deductibles. That’s another reason why we’re especially vulnerable during this pandemic: People are avoiding getting the care they need.

q: Which brings us to an everyday reality in America that doesn’t seem to exist anywhere else in the industrialized world, and that is that people have a debilitating fear of seeking medical help because they fear the cost.

It is absolutely a fear that people have, one that does not exist in other developed countries. in this pandemic, I think people will be reluctant to get tested; Although the government says it will cover the cost of the test, I’m not sure that message has reached everyone.

and the insurance industry does not guarantee that the cost of treatment will be adequately covered. Some insurance companies have said they will waive out-of-pocket costs for treatment, but not all have.

In this country, we have this constant anxiety and fear of getting sick, not just because of the disease we might get, but because we have to pay a lot more money than we actually have. That’s why so many Americans turn to gofundme to get the care they need, even with insurance, and why so many people end up in bankruptcy court even with insurance.

p: Part of that seems to be related to the incredible complexity and opacity of the system, doesn’t it?

The system is enormously complex, much more so than any other health care system. so many things that doctors and patients have to deal with are completely unknown in other parts of the world. One thing that’s common in this country is that insurance companies, even after a hospital claim is paid, they have teams of people who look at those claims that have been paid for reasons to ask for money back, any kind of mistake. encoding, for example.

We have this huge bureaucracy within private insurance companies that consumes the time of doctors and nurses. that is simply unknown in the rest of the world. As a result, doctors and nurses don’t have adequate time to treat their patients as they know they should because they have to deal with multiple insurance companies.

every doctor in this country should have a staff that does nothing, day in and day out, other than dealing with the people at the insurance company. It’s not just the big companies. there are a multitude of smaller companies, and each company has a multitude of health plans. there’s a lot of variation, and that requires constant phone calls on behalf of doctors to insurance companies to make sure they know what’s covered and how much they’ll be paid when they treat a patient.

p: So while hospitals, doctors, and nurses are overwhelmed by the magnitude and force of this pandemic, they also have another burden their peers in other countries don’t have: they need to do multiple calls. to insurance companies every day on behalf of patients.

that’s exactly right. Before a doctor will even prescribe a specific drug for a patient, in many cases a nurse or even a doctor has to contact them on the phone or check their database to find out if and to what extent a particular drug is covered.

Each insurance company has its own unique formulary. the drugs that are in there and the levels that they are in depend on the agreements that the insurance company has made with the pharmaceutical companies. Usually, the insurance company will get some discounts based on the volume of drugs that they can send to the pharmaceutical company. that benefits insurance companies and pharmaceutical companies. patients are at a disadvantage, because there’s no way to really know how much you’re going to have to pay for a drug your doctor says you need until you show up at the pharmacy.

q: You recently said that this crisis is an opportunity for health insurance companies to make record profits. this does not seem to fit with the exemption of co-payments in treatments and tests.

Insurance company executives have even told financial analysts that they may have a net savings here.

There are different ways that can happen, even if they agree to cover the cost of treatment. one of the things that is happening across the country is that hospitals are canceling many procedures that had been scheduled and are not life-threatening; if someone needs a hip replacement, for example, they won’t get it for an indefinite period of time.

The other thing is, frankly, a lot of people are going to die, and the people who are going to be affected the most are those who have co-morbidities, people who may be obese or have diabetes or lung or heart problems; older people, who are the most expensive for insurers.

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The people in charge of calculating the numbers within insurance companies know that there is a strong possibility that, with all those things included, they could emerge on the other side of this pandemic having paid less money in claims than they would otherwise. another way.

but even if they have to pay more claims than they expected, they know they can, and have already indicated they will, raise everyone’s premiums next year. In fact, the folks who run the California Health Care Exchange, California Covered, are already saying that people in California who get their coverage from the exchange can expect to see their premium increase by 40 percent. And it’s not just about the obamacare exchanges, it will also affect people who get their coverage through their employers.

The way the insurance companies have manipulated our health care system, they are probably going to benefit financially from this, while the rest of us are going to be at a disadvantage.

our hospital floor is full and we need open beds for the impending increase in covid.

but several of my patients can’t leave the hospital because they’re waiting for pre-authorizations from commercial insurers.

insurance companies are crashing the system in the middle of a fucking pandemic.

— augie lindmark (@augielindmark) March 18, 2020

p: You are a long-time advocate of universal health care. In your opinion, what makes universal health care systems better equipped to handle a pandemic?

A couple of things come to mind. one, we have such a fractured system, where there are so many health care payers that there is no consistency, and people don’t know how much they will have to pay out of pocket.

The other important thing is that other systems can spend more money on public health initiatives. we spend only about 3 percent on public health in this country, and I’ve talked to some public health experts who think that’s inflated and we spend even less than that. other countries are better equipped because they spend more and have the ability to spend more on public health infrastructure, allowing them to prepare for and weather a pandemic like this.

Also, not only do we have many for-profit insurance companies, but many providers are now for-profit. many medical practices are owned by private equity firms that are there to make money. some of them are actually owned by corporations, including insurance corporations.

so it’s all about the money in this country. it’s about making a profit, whether it’s on the insurance side or the delivery side, and that contributes to the ever-increasing costs of healthcare.

Americans don’t really get it, but I think they’re beginning to understand that the free market doesn’t work in health care like it does in other sectors of the economy. it does not function at all as a free market. For one thing, there is no price transparency. people don’t really have the choice that they’re told they have. but we have been told that this is what we have and that this is what we must preserve.

p: Most Americans seem to know that this is a crazy way to take care of your health. Polls consistently show that most Americans support some kind of government-funded universal health care system. however, very few politicians suggest that. How do we explain this disparity between what the public wants and what politicians are willing to offer?

It’s money in politics, and I’ve written quite a bit about it too. in fact, my latest book is called nation on the take. when i worked for cigna, one of the responsibilities my team had was doling out campaign contributions through cigna’s political action committee, our pac. and individual insurance company executives separately donate a lot of money to the campaigns. the candidates want that money to keep flowing, and party leaders on both sides of the aisle want that money to keep flowing. Until we can really address the issue of money in politics, it’s going to get harder and harder to get us where we need to be.

I think this pandemic is waking up members of Congress and other legislators to realize that despite those campaign controls, despite the lobbying and talking points that people like me used to create, their constituents are suffering. I think we’re going to see more candidates supporting universal health care than we’ve seen in the past.

if possible, we need to fix not only our health care system, but also our political process.

q: Let’s talk about the day after covid-19. there will obviously be some momentum for reform, once the immediate threat is behind us. What tactics would companies use to try to stifle reform?

appears in different ways. one is the ongoing campaign to scare people. all the campaigns carried out by the industry are based on the principles of fear, uncertainty and doubt or fud. they want people to fear reform. they want them to feel insecure about it and how they will be affected by it and to doubt the proponents and whether they are really on their side.

They are very effective. fear works. people fear change, and the industry knows it. they know the words and phrases to use to scare people. again, that’s what I used to do for a living.

promarket is dedicated to discussing how competition tends to be subverted by special interests. Publications represent the views of their writers, not necessarily those of the University of Chicago, the CAB School of Business, or their faculty. For more information, please visit the promarket blogging policy.

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