Let me start with a disclosure to be fair: I am always suspect of the insurance industry. I worked in the insurance industry for many years and, although there are very good people there, the companies often stand for something I do not like.
I am in favor of every corporation in America making a reasonable profit. In fact, if you want to sell the latest “widget” and make a kazillion dollars, I am very happy for you.
What I have a problem with is an industry that knows its business; has earned billions in profits; yet insists upon trying to evade the very promise they made — the very obligation for which they have received premiums paid to them.
So, that very long preamble to set the stage for my disgust, not surprise, at the recent news about WellPoint, Inc. WellPoint insures 33.7 million people; reportedly the nation’s largest insurer.
MSNBC reports that WellPoint cancelled the health insurance of women who had been diagnosed with breast cancer. WellPoint used a computer program to target women recently diagnosed with breast cancer.
Imagine this dreadful conversation:
Physician: Mrs. Smith, I am so very sorry to inform you that you have breast cancer.
Mrs. Smith: Oh, no, doctor, what can we do? Where do I go from here?
Physician: I have some more bad news. Your insurance company will be cancelling your health insurance policy now that you have been diagnosed with this life threatening disease. So, unless you are independently wealthy, you are never going to be able to pay for good care for treatment of your breast cancer.
Mrs. Smith: But, doctor, how can that be? I have always paid my premiums on time.
Physician: Well, you are now sick. Your health insurer needs to make a profit and how are they expected to do that if they have to pay for your care.
OK, derisive and theatrical? Yes. Inaccurate? No.
On February 24, 2010, the CEO of WellPoint, Angela Braley testified before the Oversight and Investigations Subcommittee of the Committee on Energy & Commerce. She said a number of things:
- “I understand the burden that rising health care costs put on hard working individuals and families.”
- She set forth a number of causes for spiraling health care costs; although not one of them cast any real responsibility on the insurance industry.
- “Out of every dollar the nation spends on health care, less than one penny goes to health plan profits – isn’t it time to ask what are we doing about the other 99 cents?”
- “Rising health care costs frustrate all of us. It is a serious problem facing the country that deserves not only a serious discussion, but meaningful action. WellPoint is eager to continue to participate in both.”
And the very best part of her speech once again casts blame everywhere else but with her industry:
While it may be tempting to shift the blame to insurers for rising health costs to do so would be
the triumph of sound bites over substance. Insurers are among the least profitable part of the
health care system – and the part that helps in the most meaningful way to reduce health care
costs. Insurance industry margins are dwarfed by the margins of others in health care. Real
reform needs to focus on the areas where systematic savings could be realized. The elephant in
the room is the growth of health care spending. Despite the attention we’ve garnered in this
debate, we are the tail on the elephant and we need to address the elephant.
Her characterization of the insurance industry as being the “tail on the elephant” in the overall health care crisis, seems to have characterized her company, at least, well — although I always heard it in the context of a horse’s rather than an elephant.