Health insurance corporations have been, next to energy and pharmaceutical corpo's, enjoying the highest profits of any economic sector. Now that the Bush Recession is beginning to affect the middle class and not just us low-incomers, it's getting harder to maintain those profits as more companies jettison their health programs and more people are making less money. In a "free market", of course, this would mean that health insurance premiums would go down. Are they? Well, um, no, actually.
The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.
Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be — often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.
With medical costs soaring, the coverage many people have may not adequately protect them from the financial shock of an emergency room visit or a major surgery. For some, even routine doctor visits might now take a back seat to basic expenses like food and gasoline.
“It just keeps eating into people’s income,” said James Corbin, a former union official who works for the local utility in Tucson.
(emphasis added)
Everything keeps eating into people's shrinking incomes, and the investor class still won't give an inch. Remember the Collins family? This is typical:
Zena Collins knew she had a serious problem when she could no longer afford electricity.
The mortgage payment on her Gaithersburg house had jumped about $500, to $2,000 a month, not counting taxes and insurance, after her adjustable interest rate increased. When she bought the house in 2000, she was a pension administrator. By the time her company decided to cut her job, she was bringing home $5,200 a month. In April 2006, she managed to secure a similar job -- but not a similar salary. So there she was, earning less but paying more for her house. And that's when the lights went out.
"I simply could not do it," she said. "I was sitting there with battery-operated lights and showering with cold water."
That's who the corpo's are determined to get more money from - the same people they're determined to pay less to. This kind of corporate behavior isn't what one expects during a serious recession - that prices keep going up even though incomes are diving ducks and inflation is supposedly under control. Something's got to give here, and the only thing that's clear at this point is that it ain't gonna be the corporations.
They're hanging tough, raising their prices in the teeth of lower incomes and assuming, I suppose, that they've got everybody over a barrel. But the outcome isn't that tough to predict. Older folks with higher medical expenses will bankrupt the system as the younger folks who don't use it as much abandon the system altogether. We're looking at millions more uninsured than we've seen up to now simply because with their income doing a vanishing act, nobody can afford health insurance any more. It's hard to figure the health corpo's rationale.
Mr. Corbin said that under their employer’s health plan, he and his co-workers are now obliged to pay up to $4,000 of their families’ annual medical bills, on top of about $1,600 a year in premiums. Five years ago, they paid no premiums and were responsible for only about $2,000 of their families’ medical bills.
“That’s a big jump,” Mr. Corbin said. “You’ve just lost a month’s pay.”
And with health insurers raising premiums whenever you use your insurance, you'll what? Stop using it, naturally.
[T]he soft economy is making some insured people hesitant to get care they need, reluctant to spend a $50 co-payment for an office visit. Parents “are waiting longer to bring in their children,” said Dr. Richard Lander, a pediatrician in Livingston, N.J. “They say, ‘The kid isn’t that sick; her temperature is only 102.’ ”
This is a recipe for disaster, and the oddest thing about it (in some ways) is that the insurance companies are cutting their own throats by not cutting their premiums. They're driving people out when what they need to be doing is drawing more people in, expanding the payment pool. That has historically been the way insurance works - and the way it makes money. Now they seem to want everybody out, even the younger, healthier folk who are less of a drain.
Nor does the corporate fad of reducing or eliminating health care benefits for their employees make a helluva lot of sense in times like these. In fact none of it makes much sense until you realize that corporations have been training themselves for 30 years NOT to look past the next quarter. If they're making money now and they're projected to make money for the next 3 months, nothing changes. If they're projected to lose money over the next 3 months, they raise their prices. The long term effects of their decisions get little or no attention. Nobody is studying them. Nobody cares.
This is one of the hardest things to accept and understand about the way modern US corpo's work. There is a strong myth dating from the post-WW II period that all American businesses think - and plan - far in advance, that they're setting up the next 10 years of growth and stability. The reality is very different.
No, they aren't. They're looking at the next 3 months and refusing to look at the 3 months after that until it, you know, gets here. They are systemically short-sighted. It's engrained in their thinking, their procedures, and their accounting.
They think small.
The results have been painful. Health insurance corpo's looking for higher and higher profits without bothering to look at the overall economic picture are bankrupting their customers and offering less and less in return.
Experts say that too often for the underinsured, coverage can seem like health insurance in name only — adequate only as long as they have no medical problems.
“There’s a real shift in the burden of health care to people who happen to be sick,” said Paul B. Ginsburg, the president of the Center for Studying Health System Change, a research group in Washington.
And here, at last, we begin to see what the insurance companies laughingly call "a strategy": now they want people who are sick because those people will pay whatever they have to pay as long it's below the amount they would be paying without insurance. This is a whole new area of profit-taking. Instead of charging everybody 10% of their medication cost, you charge just the sick - what? 80%? 70%? What will the traffic bear?
That's the motto of health insurers today, apparently: "As much as you can get away with."
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