Why are Health Insurers Launching An 11th Hour Attack on Health Care Reform: A Response
Posted on : October 22, 2009 | By : Bill Stapleton | In : Health Insurance, Health Insurance Companies, Healthcare, Politics, Universal Healthcare, health care reform
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There has been a lot of recent discussion about insurance companies’ sudden entrance into the health care debate. The Washington Post referred to the health insurers as Obama’s “top foe” last week, mainly as a response to actions taken by America’s Health Insurance Plans (AHIP), industry trade group, including an advertising campaign opposing health care reform and a controversial PricewaterhouseCoopers report commissioned by AHIP analyzing the recent Senate Finance Committee proposal.
Many others have criticized AHIP’s actions, claiming that AHIP is scared and attempting to block health insurance reform as a last ditch resort. Well, of course. The health insurance industry is reacting because the public option will put them out of business. Although they are not saints, the health insurers simply pay claims and charge premiums. In the end they make a 3% profit out of doing so. They also subsidize Medicaid and, to a lesser extent, Medicare-by paying doctors, hospitals, and more. The payment difference is not by choice-rather, free (and oligopolistic) market forces at work.
The idea that a public option will make health care more affordable can only happen in 2 ways: (1) pay doctors, hospitals, and others less. This may be a good idea, but there are consequences of monopolistic, heavy handed pricing tactics; (2) we can have taxpayers subsidize the public option.
The idea that the public option will save on administrative costs is not realistic. What does Medicare do for administrative costs? It contracts with Blue Cross and other insurance companies! If you still don’t believe it, go visit any major health insurer headquarters in CT (Anthem, Aetna, Cigna…). The places are half empty, having massively reduced costs over the last 5 years. “Profiteering” may be considered bad, but these insurers are very lean.
We don’t like HMOs, because they are too restrictive. We don’t like limited benefits so we pile on mandated benefits each year. We don’t like high deductibles, but we do like high tech cures. There is no ceiling and our solution? A public option? If our appetites are insatiable, NO option can solve the problem.

You know the debate has really moved in the last few months when the headline of every major paper praises the congressional budget office scoring of the latest senate health bill, suggesting an 829 billion dollar cost over a decade (See the
The American population remains highly divided in its opinion of President Obama’s proposed 
e 11%. Factors like any applicable age increase, moving to an area with higher or lower medical costs, changing the number of family members enrolled in a policy, or adding or deleting optional coverage may also affect premiums for customers. Members are required by law to be notified in writing of the increases in premiums, and are advised to to call their agent or Anthem Sales Representative if they have any questions. Anthem offers advice to its customers, some of which includes raising their deductible. They also state they offer other lower-cost plans as alternatives.
Unfortunately for many people in New England, large changes are being made to insurance plans for the upcoming year. Important changes in the way CIGNA HealthCare plans to operate in the states of Massachusetts, Maine and New Hampshire will take effect on January 1st of 2010, the next contract year. CIGNA HealthCare has decided to withdraw from the HMO market and no longer offer the HMO Plans to any sized employers for coverage of any employees and their eligible dependents in those states.
