For-profit health insurers add more than 30 percent to America's health expense

Karen Ignagni is CEO of America's Health Insurance Plans, the main health insurance lobby.
 She pushes for a bill that has no public option but that does require insurance for all.
(Manuel Balce Ceneta/ Associated Press)

AHIP reverses position 

America’s Health Industry Plans (AHIP), the lobbying group for health insurers, attempted a Halloween surprise Monday just in advance of Tuesday’s scheduled vote on the Senate Finance Committee’s Health Care Reform proposal. White House officials were blindsided by the eleventh hour release of an industry purchased analysis by accounting firm PricewaterhouseCoopers.

The report assumes a worst case scenario and claims that adoption of the Senate proposal will increase health insurance premiums by an additional $4000 for a family of four by 2013. Finance Committee staffers called the report a pure “hatchet job” and untrue.

Threatened premium increase happens without action too

AHIP Executive Vice President Mike Tuffin threatened on Monday that reform as proposed would cause premiums to increase more than no legislative action at all. Federal research shows that health-care expenditures have increased by 7.5 percent per year since 2000.

Defeat of health care reform predicts average premiums of $17,658 for a family of four by 2014 extending the current historical record. The PricewaterhouseCoopers - AHIP funded study found that premiums could reach $17, 200 a year earlier.

The surprise move by AHIP is a sharp reversal to their previous public support of health care reform. It once again raises the specter of the group's famous “Harry and Louise” scare TV commercials which helped to derail health care reform during the Clinton presidency.

No other developed country allows for-profit insurers on basic policy
 
America is the only developed country with private insurance companies who are allowed to make a profit on basic health policies. According to the Organization for Economics and Development, the median administrative expense for all 37 developed countries is 3 percent.

A current analysis of 2008 health insurer SEC filings reveals the top 23 American health insurers spend more than 20 percent of gross revenue on expenditures other than patient care. This is between four and seven times what is spent in similar countries for similar functions and ignores a parallel structure in doctor’s offices and hospitals that exists to service the insurers and creates a similar duplicate expense.

For-profit insurers increase total bill by 30 percent

It is probable America’s health expenditures are inflated by a factor of at least 30 percent by the mere existence of today’s for-profit basic insurance entities. $750 billion in annual savings could be there for the taking simply by outlawing profits on basic policies as all other advanced nations have already done.

Nixon proposed non-profit system in early 70's

A non-profit health payment system was last proposed during the early 1970’s by the Republican Richard Nixon administration.

Al Portner is a former daily newspaper editor and publisher in seven states and author of the forthcoming “Mark Twain and the Tale of Grant’s Memoir.” Portner is also the proprietor of The Assignment Desk, LLC and provides writers, editors, and photographers for numerous kinds of contract projects from proposals and speeches to public relations and journalism. Reach him at alanportner@gmail.com.

For more info: 
PricewaterhouseCoopers Report
OECD International Comparison Report
SEC Filings
Top American Health Care Companies