Health Insurers Report Record Profit – But Leave 50 Mil Uninsured, Shift Uninsureds’ $49 Bil Unpaid Hospital Bill to Taxpayers

Four recent health-care related stories in the news, taken together, put the current state of the crisis into perspective:

• Despite failing at its core mission of providing insurance to everyone, the insurance industry rakes in record profits:
  

  The five largest insurers — WellPoint, Cigna, UnitedHealth Group, Aetna and Humana — which along with some other competitors boasted a 250 percent return over the past decade, earned over $15 billion in 2010. That’s 22 percent growth over their combined $12.2 billion earnings in 2009.

• And yet, the insurance megacorps are demanding large premium hikes:
  

  Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends. Many defend proposed double-digit increases in the rates they charge, citing a need for protection against any sudden uptick in demand once people have more money to spend on their health, as well as the rising price of care.

• These companies have rigged the system so that one-sixth of the U.S. population can’t afford insurance:
  

  More than 50 million Americans are uninsured: More than 7 million of them are children and more than eight out of 10 are in working families. They are our friends, neighbors and colleagues – forced to gamble every day that they won’t get sick or injured.

• Because of the insurance companies’ failure, the uninsured wait until they have a health crisis and have to be hospitalized, resulting in $49 billion in unpaid hospital bills last year:
  

  Uninsured Americans — including those with incomes well above the poverty line — leave hospitals with unpaid tabs of up to $49 billion a year, according to a USA TODAY analysis of government statistics.

  On average, uninsured families can pay only about 12 percent of their hospital bills in full. Families with incomes above 400 percent of the poverty level, or about $88,000 a year for a family of four, pay about 37 percent of their hospital bills in full, according to the Department of Health and Human Services study.

  “This report shows that even higher-income, uninsured families are struggling to meet the high costs of health care,” Sherry Glied, assistant secretary for planning and evaluation at Health and Human Services, said in a statement. “No family should bear the burden of being one illness or accident away from bankruptcy.”

  Researchers also found that most uninsured people have “virtually no” savings and that about a third have no financial assets.

There is one more step. The health-insurance industry has, in effect, socialized the risk and privatized the profit, similar to the way the Wall Street banksters socialized their billions in debt and privatized their profits after the economic meltdown.

While health-care industry profits grew by 22 percent last year, at least in part because they jacked up their prices, 50 million Americans — mostly small-business owners, the self-employed and lower-income families — went without coverage, mostly because they couldn’t afford the premiums.

When the uninsured needed care, they went to hospitals — the most expensive setting for medical care, where they received treatment which they also could not afford. And here’s the last step: Their unpaid hospital bills — $49 billion last year — were paid by tax payers, mostly at the local level.

Socialize the risk, privatize the profit.

Republicans like to blame the victims — the uninsured deadbeats — but it is these same Republicans who insist that only private industry, not the government, can solve problems.

And, in fact, private insurers could solve this crisis tomorrow, if they had a reason to. All they would have to do is lower the price of premiums to make them affordable.

Arguably, lowering the price would bring in new customers — up to about 50 million of them. Even better, adding tens of millions to the risk pool would spread the risk more widely, a fact that ought to be appealing to providers.

Unfortunately, the billionaires who run the health-insurance industry learned long ago that it is cheaper to hire lobbyists and pay off politicians — or even to fund an entire astroturf political “movement” like the tea party — to fight reforms than it would be to create a market-based solution that insures everyone.

So what were are left with is essentially a hugely profitable money-laundering scheme fronted by an enormous corporate bureaucracy for which job one is denying coverage to Americans who can’t afford the high premiums that produce the huge profits — thereby shifting the cost medical care for millions of American workers from the private insurers onto local taxpayers.

For centuries, doctors believed that leeches could cure diseases by sucking “bad humours” out with the blood. The practice was abandoned when it was discovered that leeches weren’t really good for anything but sucking blood.

Now, like the plot of a bad sci-fi movie, it’s as if giant leeches — these health-insurance companies — have latched onto the U.S. health-care system and are sucking it dry.

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