15 Times Faster than Inflation

As Republican leaders threaten to boycott the President’s healthcare summit unless the Democrats dump what is already on the table, signs that our healthcare system is sicker than ever may jar a frustrated electorate to demand reform, one way or another. The February 9^th Washington Post reports: “Anthem Blue Cross of California sent out notices earlier this month to many of its roughly 800,000 holders of individual policies, informing them that the costs of their plans would sharply increase [by as much as 39%!] to cover rising health-care costs. The increases do not affect employer-provided plans in the state.” Sensing that Congress is simply not a threat, that internal partisan bickering will stop any real effort at cost-containment at the Capitol steps, the healthcare insurance industry appears ready to join big pharma in a new set of rolling cost increases.

The Post continues with specifics: On Monday, HHS Secretary Kathleen Sebelius joined the fray, writing Anthem President Leslie Margolin to impress on Anthem its ‘responsibility to provide a detailed justification for these rate increases to the public.’ In particular, she said, Anthem should disclose to policyholders what share of their premiums is going toward profits, administrative overhead and advertising, as opposed to covering medical claims. In its initial defense of the increases, Anthem has said only that its so-called ‘loss ratio’ (the proportion of premiums spent on care) is above the state's required minimum of 70 percent… Sebelius also noted that Anthem's corporate parent, WellPoint, has seen its profits "soar," rising to $2.9 billion in the fourth quarter of 2009… ‘These extraordinary [rate] increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy,’ she wrote.”

Anthem delayed the effective premium increase pending a state investigation, but there doesn’t seem to be any legal basis to stop this financial carnage: “The [California] state insurance commissioner, Steve Poizner, requested the delay on Monday after an estimated 700,000 individual policy holders began receiving notices from the insurer, Anthem Blue Cross, of increases, some as high as 39 percent. The increases, originally scheduled to take effect March 1, were suspended until May 1… Mr. Poizner said his department needed time to determine whether the increase would violate state regulations that require insurers to spend at least 70 percent of premiums on health claims, rather than on overhead and profit. Absent that, he said he had no authority to reduce Anthem’s rates.” February 13^th New York Times.

In world of layoffs, unemployment and contracting paychecks, cost-containment in healthcare is where the rubber hits the road. Americans may not be concerned with those who don’t have coverage, but they are deathly afraid of not being able to afford their policies or being hit with those big holes where coverage lapses. I’ve blogged about most of them, but a little summary won’t hurt (the following is a partial list with lots of shorthand): high cost of prescription drugs that are skyrocketing even faster, caps on lifetime benefits, cancelation based on medical claims, denial of coverage for pre-existing conditions, out-of-service charges, out-of-plan expertise just out of reach, bankruptcy from huge medical bills, increasing costs/taxes to pay for the uninsured, etc.

When the big pharmas made a deal with the Obama administration to cut $80 billion over a decade from their aggregate costs… once a plan went into effect… they instantly raised the prices on many prescription drugs, some by over 2000%, so that they could cut them back and look as if there were complying later. Now that the healthcare legislation appears to be dead or maimed, those price increases are still on the books with no off-setting pledge to reduce costs. If we ever needed to have the right to import European or Canadian alternative prescription drugs to create some serious competition to the American branches of these drug companies, that time is now!

We need to end medical bankruptcies, take pre-existing conditions and heavy but justified usage out of the list of acceptable reasons to deny or cancel health insurance and offer affordable healthcare alternatives to everyone… Maybe we can worry about extending universal coverage, a politically unpopular theme these days, until a later time, but if the healthcare industry can continue to block the solutions even to the cost issues that are a priority for 85% of Americans (only 15% prioritize universal coverage), if a stubborn and partisan Congress cannot find common ground to solve the issues that concern the entire American electorate, then this country is killing itself with doctrinaire and unjustified logjams. We need fewer Democrats and Republican Congressmen and women and more Americans. That unaffordable healthcare is imminent is obvious; the writing is on the wall. Sometimes leadership requires someone to lead.

If you think this is a false issue, try this quote from a poster shown in the February 10^th FastCompany.com: For every person who dies in a terrorist attack globally, 58 people in the US die due to lack of health care. How much did we spend in Iraq and Afghanistan over the last few years? What were the results again?

I’m Peter Dekom, and I approve this message.