Setting the record straight on the health care system
Glenwood Springs, CO Colorado
This is in response to Hal Sundin’s column in Thursday’s paper. It seems as though Hal has neglected to check the facts before presenting them to the public through his ranting about the insurance industry.
First, I would like to make the point that I believe, as does the insurance industry, that there needs to be reform in the health care industry. Notice I said health care and not just health insurance. There are numerous components of health care, and each of these needs reform in order to make the system work.
I will address Hal’s arguments and show that he has misled people at best and has twisted the facts to try to show his disdain for the insurance industry.
There are actually 45.65 million people uninsured in this country. However, I wouldn’t categorize them all as Americans because roughly 10 million are illegals and not entitled to insurance. This is according to the U.S. Census Bureau statistics published in August 2008.
Regarding the remaining 35 million Americans, approximately 12 million earn more than $75,000 per year who could purchase insurance but choose not to, while another 10 million are between jobs and are temporarily uninsured in this “snapshot” taken at any given time.
The other 13 million are uninsured either because of their health history or they can’t afford it. This is the segment of the population that we need to work on as an industry and a society. The health insurance industry has already stated that they support a plan that would guarantee coverage to all Americans without regard to their health situation.
Hal asks why health care is so much more costly in the U.S. and then puts most of the blame on the insurance industry, saying that there are enormous profits that pay large stockholder dividends, excessive salaries and bonuses, and costly advertising and lobbying. He goes on to say that this “top-heavy administration … is busy … denying coverage and canceling policies and contesting payment of claims.”
He contends that eliminating this administration would reduce costs 25-30 percent. Interesting, but not factual. Yes, insurance companies can decline applications for individual policies based on a person’s health history. However, small group coverage has a “guarantee issue” component, and there are numerous regulations regarding the timely payment of claims. Also, his assertion of saving 25-30 percent is impossible. Pricewaterhouse Cooper did a study in 2006 and found that out of every premium dollar collected by insurance companies, 86 percent went directly to paying claims, 6 percent went to government payments/taxes and administration, and 5 percent went to consumer services and marketing. That left a statistical average of a 3-5 percent profit margin. These are the facts.
He then makes other false statements that I have quoted and responded to:
• “Lose your job you lose your coverage.” The fact is, you may continue coverage through COBRA or state continuation for up to at least 18 months, and there are other options beyond that.
“File a claim for an illness, accident or surgery and your policy may be cancelled.” This is the furthest thing from the truth. There are laws in place that prohibit this from happening. No insurance company can cancel your coverage because you file a claim or become sick.
• “Sixty percent of the American public favors a single payer health care plan.” The truth is that according to a Rasmussen poll conducted late last week, 49 percent said they were at least somewhat opposed to the unfolding health care reform plan and 46 percent were somewhat in favor. Nearly 80 percent liked their current health plan and wanted to have that as an option.
Finally, under a true single-payer system, you as a consumer would have no choice, no chance of recourse if you feel you have been wronged, no representation by your broker/agent or the state Division of Insurance during a dispute, and certainly more costs involved (Congressional Budget Office estimated on July 16 that the overall cost would actually increase under the plans being considered). Don’t believe me about the costs? Just check the unfunded liability currently facing Medicare – a mere $39 trillion.
Let’s work together to find a true solution that works for all Americans. Give individuals a tax deduction similar to businesses who buy insurance for their employees. Give everyone health insurance regardless of their personal health situation, and require that it be mandatory. If there is a public option, require it to negotiate with doctors and hospitals for the reimbursement fees, require it to pay state premium taxes, and give people the right to sue when things go wrong, just as they can now with the private sector.
Oh, and one last point. If the public option is such a good deal for all of us, let’s require that the people in Congress who are making the laws, and the president who signs the bill, must participate in the public option. Because as it reads in the current bills, they are exempting themselves from participation. Interesting, isn’t it?
Scott Bolitho, a partner at Glenwood Insurance, has consulted with businesses and individuals for their health and life insurance needs for 25 years.
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