Thursday, January 20, 2011

Health Insurers Continue to Gouge Americans


 This Video is from congressional hearings in 2010 after Anthem Blue Cross announced its 39% rate increase in California.

 In California, Blue Shield has just announced to its customers that it is raising insurance rates as much as 59% because of its own rising costs. The State Insurance Commissioner, Dave Jones asked them to delay the planned hike for 60 days. The reply was equivalent to "get lost, you have no power over us". And guess what?   He doesn't. 

The four other large insurance plans in California have also raised their premiums by double digits. Blue Cross Anthem had already increased rates in October as much as 20% for nearly 800,000 individual California policyholders.  They now want more.


Why do I make the bold statement that they are gouging Americans?  Researchers at Goldman Sachs Group  (as reported in the Wall Street Journal) estimate that the top four publicly traded plans will show earnings increases averaging 21% in the 4th quarter of 2010 compared to a year earlier.   Aetna, Inc could see a 65% jump in the quarter just ended. "It is a very good time for profits in the health-insurance industry," says Robert Laszewski, president of consulting firm Health Policy and Strategy Associates.


It's also a good time to be an executive at a Health Insurance Company. WellPoint (parent to Anthem and it's steep rate increase) CEO Angela Braly earned a 51% pay increase from 2008 to 2009 to $13.1 million. Hey, did someone mention a recession?

I can assure you that physicians are not receiving payment increases from these insurers.  Hospitals in California are contracting with them only enough to cover cost of living and inflation (a few percentage points).  As families are struggling to hang on and employers are struggling to stay in business, the Insurance Industry is fat and happy. 

26 comments:

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Anonymous said...

"GOUGE" is absolutely the perfect word!! I have been on them at least three years and hate the way they RIP US OFF yearly in January Antham thinks it is their Christmas at the expense of us all being on their insurance. More on this maddening subject tomorrow!

KathleenMDPhD said...

Our health system has been hijacked by the insurance companies whose primary motivation is greed, not patient well-being. Of course, it's okay, that they're greedy, that's the capitalism that built our country. The problem with it is that somehow the consumer has lost control over what they are paying for through this middle man (really, linking to insurance to employment was brilliant for the profiteers), and doctors have lost control over their reimbursements through insurance companies. And we're being held hostage by our own fear of "being uncovered" and by our very human fear of disease and death. Unlike 30 years ago, in days I remember, people are now convinced they need to see the doctor for everything and that every aching knee needs to be replaced with an artificial one. We've been "sold" on the idea of a need for more heath care, and the insurance companies get to make a profit off of that. Amazing. How to fix it? Stop buying their products. Reset health care to a relationship between patients and doctors.

M.scott said...

Yes this is just wrong...but really Doc, aside from reading yours and other articles, and getting mad, what can we do? They seem to hold all the cards, flaunt their power and basically we are left powerless and at their mercy...unless we just forego buying insurance altogether...and then risk bankruptcy if we get injured or seriously ill...and then our doctor would get screwed...but the insurers would still make out just fine.

Truly disheartening.

jobb said...

I have an independent agent whom I can contact when I receive an unreasonable rate hike. He helps me obtain a better rate by changing to an approved Health insurance company. Try dealing with an independent agent.

KathleenMDPhD said...

3/4s of people who file bankruptcy over health bills have medical insurance.

"Unless you're a Warren Buffett or Bill Gates, you're one illness away from financial ruin in this country," says lead author Steffie Woolhandler, M.D., of the Harvard Medical School, in Cambridge, Mass. "If an illness is long enough and expensive enough, private insurance offers very little protection against medical bankruptcy, and that's the major finding in our study." CNN article source here: http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

Anonymous said...

I went to a see a doctor is was a specialist for a minor skin problem for a 10 minute office visit to just look at the problem and it was $250 for a 10 min, appt. not covered by my ins.because of not meeting my deductible yet. Most people can't afford to spend that much for 10 min. and walk away with out a definite diagnosis told to come back for follow up which would be at least $500 total for the two office visits of 10 each 20 min. combined.. Needs to say not going back when being excessively over charged. I know of other physicians who charge more fairly and don't rip off their patients. This receptionist told me me the doctor has no control of her prices it is set by the hospital foundation this physician is affiliated with.

Raymond Bouchayer said...

I wonder when the American people are going to wake up to the fact that Insurance companies are in business to make money and could not care about any of us .This farce about "health care reform" is beyond comprehension . Our Government and the people do no "Blink .or complaint. or object " to spending billions of "Tax Payers " money on fabricated wars and leaving millions not insured with the same slogan that we have the "best in the world "....no we rank about 39 in the world , Mexico does a better job .
Put every Politician in jail that takes money from the Insurance or Pharma for their "Re-election" ...they are not working for you they are working for them . Socialism medicine ...what about socialism military ?

Anonymous said...

50% of health is determined by behavior such as smoking and overeating or eating junk food. Politicians want preexisting conditions including those caused by tobacco and overeating to be paid for then someone must pay.

Instead of complaining about insurance companies complain to the politicians that want those who don't have these behavior health issues to subsidize those who do.

One of the best ways to get people off of their tobacco addiction is to increase the cost of cigarettes through taxes.

California has not raised it tobacco taxes since 1999 and it stands at 87 cents per pack. I live in NYC and this compares with a NY State tax of $4.35 per pack and in NY City an additional $1.50 per pack above that for a NY State & City total of $5.85 per pack making the overall minimum cost of cigarettes about $11 per pack.

Think about that. Our NY City tax alone is about twice that of California's state tax!

Overall the $5.85 is nearly 7 times (!) the tax of California.

Stop blaming insurers and instead blame the fiscally irresponsible California State politicians that refuse to be fiscally responsible and raise cigarette taxes and other politicians that want non-smokers to subsidize the health care costs of smokers!

Toni Brayer, MD said...

Anon: You are mixing two issues that are really different topics. Yes, people need to address unhealthy habits. But many people who live "good, clean, responsible lives" are unable to afford health care. Let me name a few:
Diabetes, arthritis, trauma, congenital or hereditary problems,lupus,depression, infections, blood disorders,cancer, premature delivery...I could go on and on.

Lets quit blaming humans for being human. Every advanced country except the U.S. has figured this out.

Raymond Bouchayer said...

Well said Dr.Brayer its right on.
About Taxing the Insurance and Pharma for the amount of profit they make ? not the loopholes that they have .about 50% of their profit and the same for their executives bonuses

Anonymous said...

January 23, 2011 12:37 PM; How would you like to be born 100% deaf in one ear and have only 10% hearing in the other ear, had a mother who had a healthy lifestyle. Then as an adult kept a healthy lifestyle,and weight weight, does not smoke and does yoga regularly but when you apply for new health insurance be told your deafness if a preexisting illness and denied because of that reason even though your hearing impairment could not have been prevented prior to birth or at birth. This is what BLUE SIELD did to a hard working, college educated, relative of mine. She has a friend with the same kind of disability who moved from the US to Canada who never has to worry about being denied health ins. because of a disability that she was born with and has full health benefits.

Anonymous said...

That last comment was to Anon.January 23, 2011 12:37 PM.

I also strongly agree with Dr.Brayer said in her comment!!

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Anonymous said...

Dr. Brayer,
The reason that non-smokers and non-overeaters can't afford insurance is precisely because the smokers and overeaters are having their health care costs paid for by those who don't smoke or over-eat (or drink sugar Coke).


The advanced economies that you mention (UK, France....) have a tax burden on tobacco (Excise tax plus roughly 20% value added (sales) tax) of $7 per pack. So, do you agree that we should raise our measly $1.02 US federal tax to levels of UK and France?

Honestly, don't people understand that somebody has to pay for health care costs? If smokers and those who drink sugar Coke don't pay for their health costs incurred from their behavior then someone else must?

If you wan't insurance rates to come down, advocate for UK, France, German level cigratte taxes. Don't blame insurance companies for high costs...

Anon 12:37

KM said...

One example of insurance "ripping people off" is denying them for being deficient in Vitamin D. I know this sounds like a joke but it happened to a close friend of mine. And this is someone who never smoked does not drink any sugary cokes,and works out at the gym.

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