Wellpoint — the parent company of Anthem/Blue Cross, posted 2009 profits of $4.7 billion. That’s up from $2.5 billion in 2008. Wellpoint celebrated by cutting rates for Anthem Blue Cross customers by up to 39%.
Oh, wait.
Sorry, no, they raised rates for many customers by up to 39%. I get confused. But then I think of my best friend and I remember his monthly premium went from $219/month to $298. Which is — do I have this right? — yes, an increase of 36%. His premium isn’t as high as some because he’s chosen a $5000 deductible and a $7500 annual out-of-pocket. He got the best coverage he could afford. Coverage he can no longer afford. The situation is much worse for parents with children — and God forbid they should be special needs children.
Anthem can’t maintain a consistent story about the rate hikes. Anthem Blue Cross President Leslie Margolin told the California state legislature,
Profits in the range of 2.5 to 5 percent I think are reasonable profits, I think they are appropriate profits and I think [the] profits are a responsibility that we have to have to keep a viable business surviving and thriving.
Strange, then, that internal Wellpoint memos indicate the new rate hikes are meant to “return California to a profit of 7%.”
Darn those internal memos!
Now, you might not be aware that I’m not a good traditional liberal. I believe in the free market and the power of competition — far more, at least, than my more progressive friends do. If I had to state a basic policy principle, it’s that I fear great concentrations of power, whether in the political or economic sphere. I’m big on decentralized power and economic competition.
Unfortunately, insurance companies are exempt from anti-trust laws. Have been for decades. The consequence, according to Christine Varney, the US Assistant Attorney General for Antitrust, is this:
The McCarran-Ferguson Act antitrust exemption is very expansive with regard to anything that can be said to fall within “the business of insurance,” including premium pricing and market allocations. As a result, “the most egregiously anticompetitive claims, such as naked agreements fixing price or reducing coverage, are virtually always found immune.
This means that even if your state offers a measure of choice when it comes to insurance carriers, those carriers can still work together to screw customers maximize cooperation to create an oligarchy environment of fair, reasonable, and stable profits.
Right now the country isn’t battling about health care reform. It’s really a struggle over health insurance reform. And the insurance companies were on the verge of winning. That may change, though, with Obama’s new push and this terrible misstep by Wellpoint.
In the meantime, the CA state assembly is investigating this insurance debacle. If you live in CA, call your assembly member and tell them it’s a priority for you. Don’t know who that is? Find out here.
The cost of the US healthcare system has always been, to me, staggering – from a British perspective it verges on criminal negligence that it has been allowed to become so bloated. The UK’s NHS is certainly not without its flaws, yet judging by many key markers (life expectancy, cancer survival, infant mortality) it manages to provide a service that’s the equal and in some areas the better of the US healthcare system.
The NHS costs 8% of UK GDP and serves the entire population; the US healthcare system costs 17% of US GDP, but only serves 85% of the population. US GDP is 31% higher per capita than UK GDP. So the UK’s healthcare costs $2880 per patient, vs. $9487 per patient for the US – 230% more!
So it’s entirely possible to provide a high standard of healthcare to every citizen for much less than half the current cost. And if it’s possible for a socialised healthcare system to do that, it should be possible for a free-market system to do so as well. Shouldn’t it?
This is the reason we need to have a public option – if nothing more than to give the FOR PROFIT INSURANCE COMPANIES some healthy competition. What they are doing is exactly what a for profit corporation should be doing – making a shitload of money. However, this does nothing for the citizens of this country who need affordable health care. They’ve also dropped coverage on 2.7 million people this year. Dropped.
“Republicans are wholly owned subsidiaries of the insurance industry” – Rep. Anthony Wiener