Why the Health Insurance Industry Loves Medicare

[MineralMan]

Does that sound strange? It isn't. Medicare represents a huge body of US citizens. Because of that, it can more or less dictate how much will be paid to providers for medical procedures. Providers depend on the health care needs of Medicare recipients to keep their facilities busy, and the payments allowed by Medicare effectively pay the overhead for most clinics and hospitals. For individual practitioners, the benefits aren't as strong, but for most group practices and other larger providers, Medicare income is important.

The private health insurance companies take advantage of this to leverage their own payments for procedures. By forcing health care providers to accept similar rates to Medicare rates, they lower their payouts. As consumers, we're really aware of none of this background negotiation and coercion, and the private insurers continue to build their redundant bureaucracies and pay their executives obscene salaries. Since each private insurer must maintain a complete bureaucratic system, while Medicare uses a single bureaucracy and, since insurance rates are almost completely uncontrolled and can be manipulated without any recourse from customers, profits soar for the private insurers. Best of all, the private insurers are free of the people who are most likely to need extensive and expensive treatment - the elderly.

In the meantime, the pressure continues to grow to reduce payments to providers, deny procedures, and increase profits by the private insurers. All of this is helped by Medicare's constant need to control its costs. Medicare is transparent. Private insurance is not. Every time Medicare cuts the amount paid for a given procedure, the private insurers do the same. Medicare rates to not go up, but private insurers can raise rates at will, and do. Further, since most people who have private health insurance only pay a portion of the premium, the true cost of their insurance remains a mystery.

The only solution to this spiraling cycle of inequity is to convert the entire US system to a single-payer system, with one bureaucracy, one payment scale, one pool of clients, and full transparency so that each person understands what the cost is and is assured of coverage.

This will not be easy to implement, and is going to require a massive effort to change the makeup of Congress. Unless that change takes place, there is no chance of getting a single payer public health care system. No chance at all. It was impossible in 2009. It is impossible today, and it will be impossible tomorrow, unless we provide the legislative framework that will enact such a system. We can do it if we truly want to. Not in 2012, although we can make progress toward that change, but by 2016, I believe we can make it possible.

It is not enough to say it must be done. We must provide the tools with which to do it, rather than just elect tools as legislators. It starts now. If we fail to act, it will end now, and will not happen for at least another generation. We have to put aside our differences and act if we want this to happen. There is no alternative.

[bemildred]

1. Medicare insures the most expensive segment of the population.

Insurance companies get the cream, and Medicare covers the oldest and most expensive part of the population.

[MineralMan]

2. Yes. I tried to point that out. The private insurers don't want

those people as primary customers. Oddly enough, they're very happy to sell you insurance to pay the 20% copays if you're on Medicare. That's very strange, indeed. They aren't doing that out of the kindness of their hearts, either.

[bemildred]

4. Since Obama's "reform", you can get supplemental coverage more or less for nothing.

I do find that a bit strange, I was getting a couple of those offers a week for a while, but I suppose it's the old "negotiated pricing" trick, you still pay retail without it.

But anyway, yes, I assumed you were aware of the reason why Medicare was done the way it was. We wanted single-payer like everybody else back then too, and we didn't get it then either.

[Warpy]

3. Insurance companies REFUSED to insure people over 65

and that's the only reason we GOT Medicare! People were losing everything when the first spouse got sick, able to leave nothing at all to their children. Or they were simply unable to get care, at all, and died of neglect.

The way to save Medicare is to take away the "profitable" younger, healthier population from the insurance companies and the insurance companies know this. That's why they fought tooth and nail for over 40 years to keep the eligibility age from being lowered.

Members of both parties were in favor of lowering the age to 55. Joe Lieberman (he's really an R-worm) stopped this single handedly in 2009. If you want to know who he really represents, just look at this one act.

This is why "vouchercare" is not going to work. Insurance companies are not going to write policies for older people, period. The few that they do write for "important" older people will be so much more expensive than the vouchers, that the "important" people had better be billionaires.

We know how they work, you know, even if that moron Ryan thinks the world came into being with his own birth and doesn't.

[sad sally]

5. Agree 100% with your analysis, yet still find it very unsettling and indefensible

why, when reforming health care was the President's main agenda, he decided instead that reform would be all about insurance and not about care. It was a chance to make real change; a chance to economically provide one of the most basic needs to ALL Americans. In my opinion, he blew it, and I don't see him doing anything more to address the shortfalls of the 2010 health insurance reform act.

Are the tools you mention making changes of politicians or something else?

Back in 2009, George McGovern was trying to make the point.

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/AR2009091102406.html?du

Many people familiar with politics in America will tell you that this idea can't pass Congress, in part because the insurance lobby is too powerful for lawmakers to resist.

As matters now stand, the insurance companies claim $450 billion a year of our health-care dollars. They will fight hard to hold on to this bonanza. This is a major reason Americans pay more for health care per capita than any other people in the world. The insurance executives didn't cry "socialism" when their buddies in banking and finance were bailed out. But to them it is socialism if the government underwrites the cost of health care.

Consider the campaign funds given to the chairman and ranking minority member of the Senate Finance Committee, which has jurisdiction over health-care legislation. Chairman Max Baucus of Montana, a Democrat, and his political action committee have received nearly $4 million from the health-care lobby since 2003. The ranking Republican, Charles Grassley of Iowa, has received more than $2 million. It's a mistake for one politician to judge the personal motives of another. But Sens. Baucus and Grassley are firm opponents of the single-payer system, as are other highly placed members of Congress who have been generously rewarded by the insurance lobby.

In the past, doctors and their national association opposed Medicare and efforts to extend such benefits. But in recent years, many doctors have changed their views.

In December 2007, the 124,000-member American College of Physicians endorsed for the first time a single-payer national health insurance program. And a March 2008 study by Indiana University -- the largest survey ever of doctors' opinions on financing health-care reform -- concluded that 59 percent of doctors support national health insurance.

Add Robert Reich's advice to the President in April of this year.

http://readersupportednews.org/opinion2/272-39/5605-medicare-for-all-is-the-solution?du

By Robert Reich, Robert Reich's Blog
13 April 11

Mr. President: Why Medicare Isn't the Problem, It's the Solution

I hope when he tells America how he aims to tame future budget deficits the President doesn't accept conventional Wasington wisdom that the biggest problem in the federal budget is Medicare (and its poor cousin Medicaid).

Medicare isn't the problem. It's the solution.

The real problem is the soaring costs of health care that lie beneath Medicare. They're costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That's almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years - less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

[NNN0LHI]

6. Sound strange?

Pretty sure the Blue System is the largest processor of Medicare claims in the United States.

Blue Cross is who processes them here in Illinois for Medicare.

Who processes the Medicare claims in your state?

Don