why do we need health insurance companies

When the healthcare insurance companies conclude an area they service cannot return a satisfactory profit to their shareholders, they ll pack up and leave without the least concern for people left behind without access to medical care. And one wouldn t expect a middleman to do anything else. A middleman is in business to make money. The services they represent are merely an afterthought. Take Iowa for example: Tens of thousands of individual health policy consumers could be left with no insurance option if the last carrier decides to pull out of the state. And Iowa is not alone. Other states have similar concerns. P
Health insurance giant Aetna announced they ve decided to exit the Virginia market, citing expected losses in 2018. In 2016, Aetna sold individual healthcare plans in 16 states. Today, they re leaving the door open to not selling individual healthcare plans in any states due to profitability issues. And even though Aetna maintains plans sold to consumers through their employers won t be impacted, those without jobs will be S. O. L. Still, to be fair, health insurance companies have heavy expenses.


They spend hundreds of millions of dollars annually. Their costs for marketing are huge. And executive salaries are staggering. Unfortunately, few of these expenses does anything for healthcare. Implicitly, she begged for the government to help -- put people back to work so they're eligible for cheaper group plans, and clamp down on costs. (Not even the government can stop people for growing older. ) Without that help, she intimated, premiums are going to keep rising sharply and WellPoint's already meager profits are going to be hammered worse. In delivering this appeal, Braly was forced to make an implicit admission that her industry almost never makes explicitly: The nation's health coverage system is so hopelessly broken that even the health insurance industry can't handle it anymore. Her testimony, and other statements she and other WellPoint executives have made, suggests that insurers can't profitably manage through periods of high unemployment.


They can't price policies in a way that keeps healthy young people in the same pool as older people, producing a mockery of the very point of indemnity insurance. Despite a decade of unobstructed consolidation, which was sold to regulators as a way to control healthcare costs by creating mega-insurers like hers, her industry can't control healthcare costs. Braly's words are a reminder of the most important unasked question in the entire healthcare debate: What do we need insurance companies for, anyway? The only way insurers can remain profitable at all is by selling healthy people on policies that don't offer much coverage at all, while squeezing older, less healthy people remorselessly so they either pay for most of their care out of pocket or get priced out of the insurance market completely (thus becoming a burden for taxpayers). In short, this is an industry that acts as if it will have trouble making money unless regulators allow it to cover only injuries suffered by a young single male hit by an asteroid.


Meanwhile, however, it fritters premium income away on expenses generated largely by corporate initiatives having nothing to do with healthcare. WellPoint spent $2. 6 billion repurchasing its own shares last year. This was such a good deal for shareholders that its board recently authorized spending for the same purpose. None of those dollars, it should go without saying, will be available for delivering healthcare to customers. It would have been marvelous and uplifting if all the participants in in Washington understood that as well as the insurers themselves. Instead, the health reform obstructionists, who mostly belong to the Republican Party, mouthed the same tired and irrelevant bromides. They yammered about blocking malpractice lawsuits, even though the evidence shows that malpractice litigation, including the "defensive medicine" it foments, of $1. 7 trillion. (Arguably a small price to pay, at that, for the value of giving patients injured by malpractice redress for their injuries. )

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