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Seven reasons commercial insurance cannot meet our health care needs

Written by Diane Archer

As policymakers, pundits and the public consider the path to universal health care coverage in the US, it is helpful to remind ourselves of the key reasons that commercial health insurance cannot and will never meet our health care needs.

Because, as a rule, commercial health insurers put profits before people:

  1. Commercial health insurers are generally unwilling or unable to disclose their benefits or deliver value for people with costly and complex conditions; rather, they tend to deter people with complex and costly conditions from enrolling or, if they are enrolled, from seeking care and remaining in their health plans.
  2. Commercial health insurers cannot offer reliable coverage and they undermine continuity of care. They are constantly changing the doctors and hospitals you can use, and they cannot guarantee that they will offer you coverage from one year to the next.
  3. Commercial health insurers may delay and deny care arbitrarily and keep their protocols and data proprietary, unwilling to be publicly accountable regarding their value to consumers.
    • To generate profits, they treat data as proprietary that would allow researchers to report whether they deliver high value cancer, stroke or heart care. Outside researchers and rating agencies generally cannot access the needed data or, if they can, cannot report on what they learn with respect to a particular health plan or on the comparative value of these plans when it comes to costly services. Try googling “best health insurance for people with diabetes.”
    • They may hire medical directors to oversee treatment decisions who do not understand the conditions or the treatments for which they are denying care, with little risk anyone will know.
    • They may deny coverage for ER visitsbased on patients’ diagnosis, expecting patients to know when they really need emergency care and deterring them from getting needed emergency care.
    • They have a financial incentive to delay or deny care without fear of harming their brand image since consumers cannot compare their value in a meaningful way and they are unlikely to be held to account for these practices. Moreover, they have a financial disincentive to deliver high value cancer, stroke or heart care or to cover costly drugs to treat complex conditions or too many people with those conditions would enroll, jeopardizing their profits.
  4. Commercial health insurers are generally unwilling or unable to drive system change that promotes overall value to our health care system.
    • They are unwilling or unable to control high hospital rates. Rather, they shift costs to people who go to the ER unnecessarily by charging them the full cost of their visit rather than penalize hospitals for not having a cost-effective triage system for people who go to the ER. Medicare, in sharp contrast, penalizes hospitals with high readmission rates to incentivize them to discharge patients appropriately, rather than penalize patients who are readmitted.
    • They are unwilling or unable to control rising drug costs. It can be financially rewarding for health insurers to make profits off of higher-priced drugs (formulary with brand-name drugs and not generic alternative)  or to charge their members a higher copay than their actual cost for the drug.
    • They are generally unwilling to share their data. They tend to see anything they learn that’s working or not working as giving them a competitive edge, be it on the value of a medical device, drug or treatment or any other care-related item. For example, is there a health plan that alerts the general public to a particular treatment that causes their patients harm or provides unique benefits?
  5. Commercial health insurers engage in fraudulent practices.
  6. Commercial health insurers are unwilling or unable to rein in ever-increasing health care costs. Rather, they drive up costs through the time, money and personnel they require for billing and other insurance-related activities.
  7. Neither states nor the federal government have the resources to effectively oversee commercial health insurers and hold them accountable for their inappropriate or illegal activities.
    • Unlike commercial firms that create products whose systemic defects are fixed and can be detected, if not immediately, over the long term, commercial health insurers create products that are constantly changing–doctors, hospitals, protocols for approving and denying care, costs, etc.–and make covert decisions that are constantly changing–medical necessity and billing, etc. As a result, arbitrary denials and delays of care can easily go undetected.
    • All but a handful of states, if any, have the will, skill and resources to ensure that commercial health insurers are complying with their legal obligations and meeting the needs of consumers. And, the federal government does not oversee commercial health insurers outside of government programs.
    • Even with the will, skill and resources needed, health plan data is proprietary, so even independent researchers are hard pressed to report on the failings of particular health plans.
    • Except in the most egregious situations which come to public light, it is near impossible to develop measures to evaluate whether health plans are delivering on their obligations to consumers and not delaying or denying needed care, let alone delivering value or committing fraud.

Improving and expanding Medicare to everyone is the best way to ensure all Americans have access to good, affordable care. If you support Medicare for all, please let Congress know. Sign this petition.


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