The National Anthem: Why We Need Health Care Reform So Desperately

My health insurer here in California is Anthem Blue Cross. When I first opted for it, it was just called Blue Cross. Then, a year or so back, I was notified that an entity called “Anthem” would now be running my insurance policy. I didn’t think much about it at the time. I’ve had the usual problems most people have with their health insurers – confusing bills, co-payments and deductibles that never seem to add up, a bureaucracy that gives every impression of being more interested in fighting me than helping me — but nothing more.

Now, Anthem Blue Cross is going a step further. It’s raising rates for individual policyholders by as much as 39 percent. That’s fifteen times faster than inflation. So far, my group policy hasn’t been affected but I’m expecting the worst.

Anthem says it has no choice. It says the recession has forced many policyholders to drop coverage because they can’t afford it. So Anthem has to spread its costs over a much smaller pool, which ratchets up the cost of each. In addition, says Anthem, too many of those remaining policyholders have greater medical needs than the average. So Anthem is just doing what it has to do to survive.

This argument sounds logical until you look more closely. First, Anthem and its corporate parent, WellPoint, are enormously profitable. WellPoint’s profits rose to $2.7 billion last quarter. Even if you subtract one-time-only financial maneuvers, WellPoint is still fat and happy, which makes Anthem fat and happy. Everyone is fat and happy except Anthem’s policy holders, who are being skewered.

Anthem’s argument is even more questionable when you consider that Anthem has been among the most aggressive opponents of the health-care bills passed by the House and Senate. If Anthem were sincere about why it’s raising its rates, it would be embracing the legislation. The Senate and House bills would add tens of millions of Americans to insurance pools – thereby spreading the costs over more people and avoiding the very problem Anthem says is now forcing it to raise its rates so much.

Even more troubling is the fact that Anthem obviously believes it can raise its rates by as much as 39 percent without losing every one of its remaining customers with average or even somewhat above-average medical needs. The only way it could possibly raise its rates so high and expect to keep its customers would be if Anthem’s customers have no other choice. In other words, Anthem’s strategy makes sense only if Anthem faces little or no competition from other health insurers.

I wouldn’t be surprised if this were the case. Insurers, remember, are exempt from the federal antitrust laws. And WellPoint, Anthem’s parent, is the largest insurer in America.

Anthem is a microcosm of what ails our private for-profit health insurance system – the most expensive in the world, whose costs are rising faster than anywhere in the world; a system rapidly becoming unaffordable to more and more Americans, in which insurers are rapidly consolidating into behemoths that have almost no competitors. And a system in which the biggest health insurers are lobbying like mad against reform because they like things just the way they are. They can squeeze the public and the public has no alternative but to pay up.

All this makes Anthem one of he best arguments for reform — which is probably why the President mentioned Anthem today when he emerged from what was billed as a “bipartisan” meeting to talk about health care and jobs.

Obama says he’s open to any new ideas from Republicans for how to control health care costs and expand coverage. The problem is Republicans don’t want to play this game. They don’t care about controlling costs or expanding coverage. They care only about taking back the House and/or the Senate next November. And they believe a means toward attaining this goal is to prevent Obama from achieving a victory on health care.

robert_reich.jpgThe sooner the President accepts that undeniable fact — and gets the House to pass the Senate’s bill, and then uses the reconciliation process (that requires only 51 votes in the Senate) to deal with any remaining irreconcilable differences between the House and Senate — the better.

In the meantime, next chance I get I’m switching to another insurer — if that makes any difference at all in what I pay or the service I get, which seems increasingly doubtful. I’m also joining any Tea Party of mad-as-hellers fed up with how Big Insurance, Big Pharma, Wall Street, and much of the rest of corporate America have taken over our democracy.

by Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission


  1. MyLeftMind says

    If progressives want healthcare reform, we need to quit blindly supporting Obama’s “Insurance Industry Profit Protection and Enhancement Act.” This faux reform bill forces us to pay the very insurance companies that are destroying our health care system. And don’t believe him when he says the rich will pay for this new boondoggle. The middle class always has and always will pay the government’s bills.

    Demand that our Democrats give us true reform. Obama has even abandoned the one reform that would help us most – the public option. Demand the public option WITHOUT the individual mandate. A simple expansion of Medicare at cost to all Americans would provide cheaper health care without obscene insurance company overhead.

  2. says

    Just submitted my article for the Rag Blog which is due on line Wednesday of next week. The current issue is on line at present.

    In my 88 years I have never been so frustrated with the deviousness of the U.S.political establishment…

    One comment re Blue Cross/Blue Shield—-a “NON-PROFIT’ corporation hereabouts. I find that my contemporaries, and many Americans in general—confuse this with a charity. In reality non-profit insurance companies, retiremen homes, nursing homes (now called “rehabilitation centers”) are tax free corporations without shareholders. The boards set the executive salaries and the tax form does not show “profit”, it shows “surplus”. I was aware of one outfit where a retired hospital CEO spent a year as a
    “consultant” at a proported salary of 1 mill.

    In essence there is little difference from the subscribers satandpoint between a “non-profit” and a commercial insurance company.


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