Friday, March 23, 2007

Why we don't want private health insurers chasing after profits.

The LA Times just published this story:
Blue Cross of California systematically violates state law when it cancels health insurance policyholders after they get pregnant or sick, making no attempt to determine whether the consumers did anything to merit such harsh treatment, a scathing investigation by state regulators has found.

As a result of its unprecedented investigation, the Department of Managed Health Care today fined Blue Cross $1 million. The department's findings also expose the company, the state's largest health insurer, to legal liability in dozens of lawsuits filed by consumers who allege their policies were illegally canceled, subjecting them to substantial hardships.
When I need the benefits of my health insurance, I need it at the time I am sick (or the pregnant woman needs it when pregnant and when giving birth.) Even if the insurance company is caught denying benefits illegally, as most are not, then they don't get sued or fined until a long time after the benefits are actually needed.

A private health insurer has one purpose. That is to make money. They are not there to help pay for your health care. They are there to collect payments on your health insurance policy and pay out as little as possible. They can make a lot of money as long as they receive the payments and don't pay the benefits. It doesn't matter to them if you don't use the benefits because you are healthy, or because they deny your policy when the benefits should have been paid. It just matters that they get richer if they do not pay out the benefits on your health insurance.

The government does not have a profit motive. The covered benefits are paid when they are needed. If they aren't, then the government is carefully watched by large numbers of people who want to catch them out. Clearly we cannot say the same for even the very best of the private insurance companies. Blue Cross/Blue Shield has usually been the very best.

The health care industry should be working to keep people healthy or make them well. They should not be working to get rich themselves. (And most aren't.) But as long as we have private health insurance companies trying to skim off the healthiest of the rate payers, health care will cost too much for those who can pay for the insurance, while leaving a lot of people out - often unexpectedly as the customers of Blue Cross in California found.

This is one more very strong argument for single-payer national health care.

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