Monday, February 08, 2010

Insurance In Name Only

David Lazarus' most recent column in the Los Angeles Times is entitled "When healthcare coverage is insurance in name only." No, he's not writing about some fly-by-night scam preying on working class people. He's talking about the highly rated for-profit health insurance company Anthem (Blue Cross) which last week announced double digit premium increases for its individual policies. Some of the beneficiaries got hit with increases over 20%, and the only option they were given was to purchase policies with less coverage and higher deductibles. Mr. Lazarus pointed to one couple, the L'Esperances, who faced just that choice:

The L'Esperances have been covered by Anthem for about a dozen years. At first they had a $1,000 deductible on their policy, but they had to raise it to keep their monthly premium at a manageable level.

They were paying about $1,250 monthly last year with a $2,500 deductible each. Then Anthem said their premium would rise to almost $1,400.

To deal with that, Paul said he and Jan raised their deductible yet again to $5,000 in return for an $834 monthly premium.

Now that amount's going up to nearly $1,000 -- almost as much as they'd been paying with a deductible half as big.

Anthem claims the increases are necessary, given the higher costs of medical care, yet the company made quite a tidy profit in the last accounting year, a profit they decided needed protecting and even increasing this year. In all likelihood, they will succeed. The California Insurance Company is investigating the premium hikes, but the department has no real authority to challenge the increases in most cases.

So, the L'Esperances really had little choice in the matter. Now they have what might be called catastrophic coverage: a policy that will be helpful only if they are diagnosed with cancer or have a heart attack. For that they are paying nearly $12,000 a year in addition to the $5,000 deductible.

Anthem gave its group coverage clients the same kind of news last summer and then again last month. I know, I got hit with it. Because I am essentially a part-time employee I don't get the benefit of the employer-provided benefit. I pay for my participation, but at least I am covered under a policy I couldn't get as an individual plan because I have pre-existing conditions and because I am 63 years old.

That's why the health care reform promised by President Obama is such a big deal, and that's why the hideous plan developed by the Senate is such a huge disappointment. Rather than let that plan die, the president has now invited leaders from both sides of the aisle to meet with him to revive even that mess of a plan. The GOP indicates it will participate, but only if the idea of reforming health care starts from scratch.

That's fine with me. Start from where the reform should have: with a single-payer Medicare-for-all plan. Cut the blood sucking insurance companies out of the action completely and develop a bill that will rein in costs from the major health care providers.

I'm not holding my breath for that one, however. I don't wear blue effectively.



Blogger Erin said...

Hear hear.
You suppose they'll allow any single payer advocates in the room this time?

5:51 PM  
Blogger VirginiaMadeShop said...

My Anthem "insurance" in Virginia will be renewed April 1st. for $1791.08 a MONTH! After 30 years with them, I was diagnosed and dealt with early stage prostate cancer. They have a monopoly on writing small business "insurance" in my county. I'm sure that has nothing to do with it.

9:26 AM  

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