One of the most despicable moments in the past few years came when CIGNA denied one of their customers, 17 year-old Nataline Sarkysian, a liver transplant. Bowing to public pressure after several days, CIGNA reversed itself and approved the transplant – but not before Sarkysian died. It was a perfect example of how insurance company CEOs get rich off of denying care. Americans United For Change remembered this sorry episode in a new political ad airing in Washington.
“This year Cigna CEO Ed Hanway will retire with a $73 million golden parachute. Seventy three million dollars. That’s 292 liver transplants. Nataline only needed one. If insurance companies win, we lose.”
Insurance companies are winning in some of the latest iterations of the health care bill in Washington, closing in on getting an individual mandate for everyone in the country to buy insurance, while maintaining a monopoly on the under-65 market by scuttling the public option, which would compete with private insurers and offer a not-for-profit alternative. They would get millions of new customers while potentially passing increased costs on to their customers. Nevertheless, they are still bellyaching about the meager changes to their bottom lines that would be more than offset by a forced market:
The insurers “would prefer to have absolutely no public plan on the table,” said Ana Gupte, an analyst with Sanford C. Bernstein & Company. Still, Ms. Gupte said, the insurers should benefit from the expansion in coverage — especially under Mr. Baucus’s proposed rules limiting the premiums that insurers would be able to charge from one person to the next. Under his proposal, premiums could vary by 7.5 times from the least expensive policy for the same benefits to the most expensive policy, based on age and other factors like use of tobacco.
Insurers also say they are worried about many of the new fees and taxes being proposed, including Mr. Baucus’s idea of charging the industry $6 billion a year in fees, in addition to taxing the most generous policies.
The industry also points to proposed cuts in payments to private insurers that now cover the elderly under Medicare — cuts that could amount to more than $100 billion over 10 years. “It’s a major issue,” said Ms. Ignagni, adding that health plans might not be able to continue to operate in some areas if the Medicare payments were cut too much.
There are still plenty of ways to ensure quality and affordable coverage for everyone under this plan. Insurance companies could be treated like regulated public utilities. They could have competition with a public insurance option that would force them to lower prices and improve quality. They could see an end to their corporate welfare in the form of Medicare Advantage payments, where they get free money from the government to run Medicare plans without any significant increase in quality. Any number of things could occur that would still allow insurers to skim off the top of a trillion-dollar industry and make very good livings.
But they want it all. And they traditionally have gotten there through denial of care, necessitated by a relentless drive for profit. The Sarkysian family knows this pretty well.