California think they have found the answer.
“The bill in question is AB 52, introduced by Assemblyman Mike Feuer (D-Los Angeles). It would prevent health insurance premium increases from going into effect without the prior approval of the commissioner of insurance or the director of the Department of Managed Health Care, who share jurisdiction over health insurers.
The bill would give insurance regulators the same prior-approval authority they were given over auto and homeowner policies by Proposition 103 in 1988. Under current law, California health insurance regulators can’t reject a rate increase even if they think it’s unreasonable — they can only try to jawbone the insurance company or shame it with a public objection.”
Small business support this measure. That is likely because small business care more about cost control than the quality of health care.
If the state forces insurance companies to cut premiums, however, something has to give. Likely there will be more rationing, physician and hospital payments will be cut, and the quality of care will decrease. Although there is much waste in healthcare, cutting spending with such a blunt tool as AB52 will decrease the quality of health care. At this point, however, reducing (or simply holding constant) health plan premiums may be a more important goal than improving quality.
The only thing that cuts premium prices in the long run is a drop in claims — and the only thing that will bring that about is a healthier population. Which is why health insurers either try their damndest to cherry-pick their enrollees, particularly the older ones, to get healthier specimens or simply get tougher about paying/denying claims.
More to the point, health insurance isn’t like any other type of insurance coverage. You insure your house, your car, your boat or your business, pay the premium, and hope to God never to have to make a claim. People go into health insurance, however, fully expecting to make a claim, and sooner rather than later: medicine tells us that earlier treatment is better than later and prevention is better than cure, which means getting regular preventive care up front and treatment as soon as you need it, without delay, even if that preventive or earlier care isn’t exactly cheap. Yet that’s not what regular indemnity insurance is set up to do, although I would point out that spreading the risk across the greatest number of people in order to defray the cost to all (which a single-payor system would do) is in fact what insurance is all about, and a very capitalist notion at that.
Health insurance, then, IS NOT indemnification against rare events but rather a financing mechanism for regular if intermittent care, in order to avoid much costlier care later on when our health goes ignored too long. The point is NOT to delay care in order to save costs but to get care promptly, effectively, and efficiently.
Add to this the fact that insurers now operate under the same philosophy that other corporations adhere to in this century — namely, that the first duty of a business is not to deliver goods or services but to make money for shareholders, and if making money means not delivering the goods and services, so be it — and you begin to see just how screwed up health insurance has become (thank you, T. Boone Pickens, Carl Icahn, and all you other bloody-minded corporate raiders: this is YOUR fault).
The truth is that if you want insurance to truly function for the benefit of the insured, perhaps no one but a single payor should be in the health insurance business. Or at the very least, all the rest of the citizenry should be folded into FEHBP, including Medicaid and Medicare, and FEHBP can negotiate rates for all of us at the same time and impose performance standards and supervision for participating plans. But that would scare the insurers to death (oh, eeek!) and we’d end up with a government financing program like Medicare For All anyway, paid for with salary deductions as Medicare is now. So maybe the logical short-cut is just to go right to pure single payor, pay providers directly, and be done with it. I’m just saying.
Would the insurance industry collapse, in that case? Oh, hell no. Please. Multiline insurance companies would probably all be relieved to have dumped the responsibility for covering health care. Although it would deny them another source of money, it would also mean losing all the headaches and bad press involved in adjudicating (i.e., denying) claims. Besides, health insurers are like buggy-whip makers: they were never guaranteed a living or a customer base in perpetuity, and times change. So no, I think that after the requisite crocodile tears and loud public bullying, they’d all gladly reconcile themselves to single-payor health care financing. Even if that meant they didn’t participate at all. Blue Cross and Blue Shield might feel a little differently, of course, as they only offer health insurance, not other lines; but nobody guaranteed them a living in perpetuity either.
And don’t anybody cuss me for making sense, please — I’m just the messenger/piano player. It is what it is.