Health Care Blues : Citizens Suffer While Insurance Profits Soar

Photo from Public Option Health Care Now.

Health care blues:
Insurance profits soar, Congress fiddles,
Teabaggers rail against ‘socialist’ Obama

By Dr. Stephen R. Keister / The Rag Blog / February 21, 2010

As I write, we await the President’s open discussion about health care on CSPAN. How illuminating it will be to have an open forum to which the American people will have access, unlike the previous behind-closed-door consultations with the health care insurance executives and the lobbyists for PhARMA.

What a rare privilege for the physicians, nurses, and public health workers to finally have some real understanding of the politicians’ plans, since they have been kept on the periphery of any substantive discussions and have been denied constructive input regarding the issues that involve them and their patients.

In the meantime we who are interested in genuine health care for the nation watch hopefully as the roll of senators signing on to a bill containing a public option, to be passed through the “reconciliation” process, continues to grow. Perhaps, just perhaps, our elected representatives will actually turn their backs on their corporate donors and look, just this once, to the welfare of their constituents.

It should certainly be noted that the five largest U.S. health insurance companies sailed through the worst economic turndown since the Great Depression by setting new profit records in 2009, while leaving behind 2.7 million Americans who had been in private health plans. For customers who kept their benefits, the insurers raised rates and cost sharing, and cut the share of premiums spent on medical care.

According to Insurance and Security Exchange Commission filings the executives and shareholders of the five biggest for-profit health insurers, UnitedHealth Group, Inc, Well Point Inc, Aetna Inc, Humana, Inc. and the Cigna Corp, enjoyed a combined profit of $12.2 billion in 2009, up 56% from the previous year. It was the best year ever for Big Insurance.

The proportion of premium dollars spent on health care expenses went down for three of the five firms, with higher proportions going to administrative expenses and profits. The shedding of 2.7 million members from private health plans is part of the industry’s long-term shifting of responsibility for millions of sick, older, or low-income customers to tax-payer-supported government health programs such as Medicaid and the states’ children’s health insurance plans.

The Center For Responsive Politics reports that WellPoint spent $4.7 million last year to lobby in Washington against comprehensive national health reform proposals while United Health spent $4.5 million; Cigna, $1.6 million; Aetna, $2.8 million; and Humana, $3.2 million.

The President should join with the Progressive Caucus in the House in demanding that the health insurance industry be brought under the anti-trust laws, as well as finally supporting Medicare for All as proposed by the Physicians for a National Health Program, and their hundreds of co-endorsing organizations. At the very least Obama could support an unencumbered public option. It is time to stand up for the American people rather than the large corporations that were complicit in the current financial meltdown.

I saw in the morning paper that the recession is causing the states to cut back on Medicaid payments, thus decreasing the amount of medical care funding for our poorest citizens. According to Steven Hill’s outstanding book Europe’s Promise, the national health plan in Germany has also had to reduce services due to the recession.

Viagra and certain other medications are no longer covered, as well as fertility-related treatments, breast implants, artificial insemination, sterilization procedures, and certain eyeglasses and dentures. A $12 co-payment has been introduced on doctor’s visits. These are the horrors of a government supervised health system!

Incidentally, Hill points out that Germany, France, Belgium, Switzerland, and Japan have programs in which universal coverage is provided by private, non-profit insurance companies at 50% of the cost, or less, that we pay here in the United States. This is not to say that their care is better, or worse, than in the U.K., Sweden, Denmark, or Canada, where health care is directly supervised by the government. Europe’s Promise contains a wealth of information about planning and methodology within the E.U. and it also discusses in detail energy, environment, governance via social-capitalism, national security, immigration, and social welfare.

According to Bloomberg News, the average income reported by the 400 highest-earning households grew to almost $345 million in 2007, up 31% from a year earlier. These figures, for the last year of economic expansion, show the average income reported by the top 400 earners more than doubled from $131.1 million in 2001. Each household in the top 400 paid an average tax rate of 16.6%, the lowest figure since the IRA began tracking data in 1992. The average tax rate in 1993 was 29.4%.

I find it a mystery why the Republicans and their right wing followers hate President Obama so much. I am particularly baffled by these folks calling him a “socialist,” when he seems to me to be just the opposite. He appointed to his treasury department the top rung folks from Wall Street and the big banks, and has pursued a very non-socialist agenda, not pushing hard for strict financial controls on Wall Street, the Federal Reserve, or the big banks. And he has continued the Bush policies of surveillance and detention. He has expanded the Bush war policies and has increased our military bases (we now have more than 700 worldwide) with no apparent concern about cost.

Jim Hightower provides a useful breakdown of how these mobs that rant against reform are financed, much of the support coming from the brothers Charles and David Koch, both billionaires and sons of Fred Koch, who was a founder of the John Birch Society in 1958. Other family foundations contributing to the Cato Institute, Americans for Prosperity, and others cited by the New York Times (the Friends of Liberty, the Oath Keepers, the Freedom Works), are the Bradley Foundation, the Coors Foundation, the Olin Foundation, and the Scaife Foundation — as well as Glenn Beck of Fox News.

The ironic thing is that the majority of these white middle class and working class people are demonstrating against their own best interests, demanding an end to Medicare, Social Security, and Medicaid. The New York Times tells us that leaders of the movement — like former Arizona Sheriff Richard Mack — rail against a “despotic government,” Interpol (!), the council on Foreign Relations, the Bilderberg Group, the Brady gun control law, the major TV networks (excluding Fox News), immigrants, and secularists.

A February 2, 2010, CBS News poll indicates that a majority of Americans do not know that they got a tax cut. The survey showed that 24% of respondents said that they recently have had taxes increased, 53% said taxes were the same, 12% said taxes were decreased. Of those identifying with the Tea Party movement, only 2% think taxes have been decreased, 46% say taxes are the same, 44% say taxes have been increased.

In reality the Obama administration has passed 25 different tax cuts. Taxes have been cut for 95% of working families, for first-time home buyers, for 8 million Americans paying for college. And the administration wants to end the Bush era tax cuts for the wealthiest families, set to expire next year. Maybe the teabaggers somehow see this as a tax increase that will affect them. Or, perhaps, they still believe in the discredited “trickle-down” hypothesis.

We are surely at a crossroads, with the direction of social policy in this country up for grabs — challenging whether we can continue with a true democracy in the kind of America conceived and established by our founders who were products of the Age of Reason. It was, for instance, their intention to create a secularist society where all are free to choose a religious affiliation of choice, or no religion at all. We should recall the words of Eric Hoffer:

It is easy to see the faultfinding man of words, by persistent ridicule and denunciation, shakes prevailing beliefs and loyalties, and familiarizes the masses with the idea of change. What is not so obvious is the process by which the discrediting of existing beliefs and institutions makes possible the rise of a new fanatical faith. For it is a remarkable fact that the militant man of words who ‘sounds the established order to its source to mark its want of authority and justice’ often prepares the ground not for a society of freethinking individuals but for a corporate society that cherishes utmost unity and blind faith.

[Dr. Stephen R. Keister, a regular contributor to The Rag Blog, lives in Erie, PA. He is a retired physician who is active in health care reform.]

The Rag Blog

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8 Responses to Health Care Blues : Citizens Suffer While Insurance Profits Soar

  1. Anonymous says:

    I read :’the militant man of words often prepares the ground for a corporate society’; is this the thought?.

  2. Dr Keister, I think you have misunderstood. The Tea Party folks I know, are not “demanding an end to Medicare, Social Security, and Medicaid.”

    We do however strongly oppose the Federal Governemt creating and administering these programs as we think that they are not constitutional or within the founders intent. Only through “eye of the needle” SCOTUS manuevering were these activities found to be constitutional.

    In fact, most of my Tea Party friends and I would argue that programs like Medicare, Social Security, Medicaid,and others I(including HCR) should be created and run at the state level as the founders intended. Individuals who wish to live in a state where taxes are higher in order to provide these services, could do so. Others could choose differently.

    These programs operated at a state level would also have the beneficial effect of gating the size and lobbying operations of insurance companies and Pharma. There wouldnt be a “too big to fail” company. Power instead of being concentrated in DC would live closer to the people and be dispersed throughout the states.

  3. Hosea W. McAdoo MD says:

    Dr. Keister’s writing is well researched and is from readily available data. He is absolutely correct

    Comments from those without a name must be considered to be ignorant and or actual lies. With no data evidence it must be considered to be just ignorant opinion and should be disregarded.

  4. Dr McAdoo,

    There are many Anonymous comments on this site. Funny that I havent heard you weighing in about their lack of validity in the past?

  5. Pollyanna says:

    my insurance carrier is among the five largest that recently reported obscene profits last year — oddly, they have sent me a notice of a rate increase!!

    must be a mistake, right????

  6. Alan L. Maki says:

    By advocating for what we really need: socialized healthcare; we would be giving the country a lesson in what socialism really is.

  7. Douglas says:

    Health Care Reform Act-intent for Change

    For many years, America’s health brokers have been offering health insurance to individuals, small businesses and large businesses for decades, yet the enrollment statistics have revealed a steady decrease on an annual basis. The number of uninsured Americans is estimated to be as high as 30 million, and the Health Care Reform Act offers a

  8. Douglas says:

    A Government proposal for Change-Health Care Reform Act

    March 2010 may stand out as a monumental month for change with the Obama Administration-Americans can look forward to changes in the current health care system through the passing of the Health Care Reform Act. Though there are many details that need to be ironed out, there are many changes that have been established.

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