But of course they are raising premiums to maintain their profits. Exactly what I was saying.
Of course they're trying to maintain their profits. Do you blame them for that? It is not disreputable for a company to try to maintain its profits.
So you don't blame the insurance companies...
Since when is it the job of insurance companies to reduce health care costs? Why are you putting that burden on them. Sure, it's reasonable to expect them to not add to the burden and to act responsibly in the best interests of the country as would any citizens. But their role is not to reduce costs. Their role is to provide a service and make money for their shareholders.
Actually the opposite is happening... less coverage and bigger deductibles.
The size of deductibles is a function of whatever employers negotiate with insurance companies. The employer pretty much decides how much of the burden it will bear and how much its employees will bear. Insurance companies offer products that are responsive to the demands of customers.
As for more services being added, how old are you? Do you not remember when mental health services were not included? Or chiropractors? Or fertility treatments? Lots of stuff has been added over the years. There are states that require all policies to have such things. I remember when health insurance covered only what was known as "major medical." Now when you check into the hospital they give you socks. They used to cost extra if they were available at all. You've somehow managed to miss the trend line here. Maybe in the last couple of years there has been a dip in the trend line but the overall trend line is the inclusion of more and more services. Demand drives up prices. That's very basic economics.
That's a gross cost problem not a per capita problem. We face both... but when talking about the industry we need to focus on per capita.
Huh? They're the same thing. More of us are old. The average age is older. The gross is older and so is the per capita.
Listen Lane, the insurance companies didn't stop it.
Of course they didn't stop it. They slowed it some, but they did not stop it. It wasn't their job to stop it but you keep blaming them for not stopping it. Yet you have no suggestions on how they could have stopped it. The reason I keep asking for ways they could have stopped it is that I don't believe it is feasible for them to stop it and you can hardly blame anyone for doing something that isn't feasible. So either offer something that they feasibly could do or could have done or quit blaming them. It's illogical and unfair scapegoating.
That has been a dismal failure.
I'm glad to see that you understand how it came about. Had we all been doing our own individual thing all along we wouldn't be in this mess. The problem was triggered by employers offering health care benefits and competing among themselves to offer primo packages. We would be better off had that not happened.
So why do you want to exacerbate earlier errors by reducing what little flexibility we still have?
Why? I suggest that they can pretty much raise premiums without a resultant loss in business. So why would they aggresively reign in costs? If you can charge $50 with a 10% margin or charge $100 with a 10% margin, why charge $50?
Insurance companies compete on price. Employers go with the company/companies that offer them the best price. So do employees who have options. For example, every year the feds have an open season and people change plans choosing among the offerings based on, among other things, price. Your argument suggests that you think that there's only one insurance company with monopoly control rather than many companies competing on price. It's true that there are fewer companies than before and less competition but there are still enough that they have to compete on price.
If you can charge $50 with a 10% margin or charge $100 with a 10% margin, why charge $50?
Because the employer and the individual will choose the one that charges $50, that's why. Again, basic economics.
Listen you have to agree that we need to reduce cost.
I do. I heartily agree. Just disagree that the proposal will produce that result.
You may not see the insurance companies as the villain... fine with me. But do you admit that they are not the solution?
They could be part of one potential solution. If we could remove the employers from the equation and free insurance companies to offer a full range of products to individuals, there's opportunity there to reverse the damage. They could offer both prepaid health care plans, what we now call health insurance, and actual insurance products, which would be relatively inexpensive. That approach is hardly a slam dunk--we may be too far down the entitlement road to destruction--but it's better than creating a universal standard policy with all the bells and whistles and either have the government run it nationally or let the insurance companies each administer identical pieces of same pie. The latter is what the proposal would establish and that wouldn't fix anything. It would institutionalize and solidify everything that went wrong without reducing overall costs.
Can we meet somewhere in between?
We're talking ideas here, not politics. You compromise in politics. With ideas, you try for facts, logic, and intellectual integrity. You can't fight the basic laws of economics or human nature when you design a system nor can you put players in roles for which they are not equipped and expect a workable solution. When people are informed and use their thinking caps, they can find a consensus around something workable, not a political compromise but a thoughtful, enlightened consensus. That's what I'm trying to enable by discussing the topic with you. I'm trying to enlighten and I'm willing to be enlightened but I will not compromise nor would I want you to.
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Earlier today I tried to find something non-partisan on profits. I thought this might fill the bill. If you can't trust a Catholic publication, who can you trust? <g>
"In the health care reform debate, we often hear about how huge amounts of money that could be going to provide people with treatement is being sucked up by insurance company profits instead. This kind of thing always makes me wonder, since in my experience a competitive market place will usually drive profit margins down pretty low. So I thought it would be illustrative to look up how much money the top private insurance companies make, and then determine their profit margins and profits per enrollee.
The following information is publically available on Google Finance. Revenue figures are annual ones for the year ending 12-31-2008. The total revenue, income before tax and income after tax figures come directly from each companies public financial reports. The enrollee figures are potentially slightly more approximate, since there I googled for the most recent press release which showed total enrollment for each company.
It struck me as interesting that it was Humana, with the lowest profits per enrollee in 2008, which just posted a healthy profit increase for Q2. Wellpoint and Aetna have suffered membership declines in the last quarter.
In no case is the company making more than $100 per enrollee per year in profits. Given that most insurance plans cost a good $4000-$6000 per year, the amount of what we pay for insurance that goes to “lining insurance companies’ pockets” would seem to be fairly small."
the-american-catholic.com
[The original text contains some charts you might find interesting.] |
