I can remember the commercial for Mattel’s “See and Say.” The ad ran in 1973 for “The Farmer Says” version. The young boy sat on the steps to a brownstone, pointed the arrow to the picture of an animal, and pulled the string as it twirled around and voiced back, “The cow says moo.” Of course, the kid was just as interested with the duck quaking sound and the pig going…oink, oink, oink.
Let’s travel forward and imagine this young boy, preoccupied with the pig’s noise back in the early 1970’s. In the time since, he has lived the American Dream, went to college, climbed the corporate ladder, married with a family, pets, luxury sedan and an SUV, vacations, investments, etc. He could be the head of a health insurance association, a lobbyist for their industry, or a CEO for a health insurance company. Within decade or so, this respected man will have his retirement horizon line in place and his golden parachute deployed.
The other day, I sat down with our insurance agent. This person covers the health and dental policies. She presented the “options” available to us now that the Affordable Care Act (ACA) is in effect (i.e., “Obamacare”). I need to point out that I support the ACA because of the work we do and how there are peers who are uninsured and how many people with disabilities will benefit from the provisions related to no preexisting conditions along with mandating mental health coverage – among several other improvements.
I really admired this agent for what she was about to do because she certainly has a very difficult job and EVERYBODY must be venting their anger directly at her, which is very misplaced. She proceeded to tell me how our current high deductible plan would increase by 70% for an individual and 81% for a family. I laughed. How ridiculous and impossible! We could not “afford” the cost of the plan we currently held. The only way that we could do this type of policy would be to go down in coverage (meaning an extremely high deductible). Bottom line, if anyone became seriously ill or needed an operation, they would be in a very vulnerable position in terms of their health and finances. They are putting people at risk of being destitute due to their health care costs. I thought this was something the Affordable Care Act was trying to solve. So we went to a different type of policy, an EPO, and found that this might be a better option. I will know more in a couple of weeks. However, the brutal reality is we will have less coverage for our dollar and better remain somewhat healthy or else we will incur significant deductible and out of pocket expenses.
Okay. So as our country moved to address some long-standing health care concerns and gaps, the health insurance companies and their infrastructure (let’s call them “the industry”) was given the task to comply and cost-justify the new plans and rate structures. Who allowed them to raise the rates to unprecedented “pig-knuckled” levels? The industry can say it is because of the expanded coverage they now have to provide and the greater number they now have to insure. There is no rational explanation for an increase of this magnitude for currently insured Americans.
An American Reality blog (posted on CNN back at the time the ACA was being formulated) sheds some light on the subject. The industry had direct input on the House bill, the President and Democrats backed off the idea of the public insurance option (competition) because the industry convinced enough people that it was a bad idea, and the Democrats included a bill requiring all Americans to purchase their insurance from the health insurance industry (to make sure that they supported the bill). And…a report released by the industry one day before the Senate Finance Committee was scheduled to vote on the bill claimed that if the bill they helped to write (the industry) became law, Americans should expect their premiums to jump to 111% over the next ten years! So the industry and politicians were all in on it and knew this day of reckoning would come.
The industry bluntly squeeze out the competition, played hard ball, and announced it all up front to cover the crassness of the political trade-off. Nobody wants the industry to fail, but what happens when health insurance companies become cash cows because of the new rate structures? They will be doing so on the backs of businesses and citizens. Will they adjust their rates down if these unprecedented increases prove to be too steep? Don’t hold your breath. It is all about protecting their solvency and profits.
In hindsight, the ACA should have included two additional provisions to help avert the shameful activity that is taking place. Health insurance companies should not have been allowed to raise existing health insurance rates more than 25% for the population of currently insured Americans. In addition, was anything set up to monitor the bottom lines of these companies, especially if large profits start coming in, and the industry ends up benefitting at record levels, doling out excessive campaign contributions through PACs to politicians? A FOX News report critical of health insurance companies identified that the CEO of AETNA insurance made $36 million last year plus several million in stock options and the CEO of Cigna made $12.5 million plus stock options.
I think Mattel should come up with an updated version of its classic toy called “The Citizen Says See and Say.” I would point the arrow to the taxpayer (who right now has empty pockets), pull the string, and listen to the toy say, “Any politician that accepts a campaign contribution from the health insurance industry is a pig in this environment.”