Private Health Insurance Is Hopelessly Broken

Dale Fountain
Jan 14, 2019 · 2 min read

So why do states and California’s new governor Gavin Newsom want to emulate Trump and expand private insurance?

Photo by Artem Bali from Pexels

Let’s get this out of the way. For-profit insurers are not your friends. Anthem denied 12,000 ER claims between 2017 and 2018. Cigna stiffed a patient on a $1 million claim. A jury found against Aetna for $25 million.

Oh sure, you say, that’s national, but not California.

In California, HealthNet denied hundreds of thousands of claims. UnitedHealth/PacifiCare was fined $91 million for 908,000 violations. Or if you’re Blue Shield, you drop people’s insurance without telling them.

Okay, that’s for-profit, but non-profit insurers…

Non-profit insurers won’t back you up either. Kaiser Permanente just settled a lawsuit where they were accused of refusing to cover their own mental health patients and turning them over to Medicaid to deal with. And “non-profit” is in the eye of the beholder. Kaiser posted a $3.8 billion profit in 2017.

But surely these are one-offs…

Hardly. 24% of all cases denied by insurers were for chronic conditions. Private insurers are purposely dragging out appeals resulting in worsening sickness or deaths. People taking a drug to prevent HIV have their claims denied or coverage outright rejected. And to top it off, workers’ comp denials increased 20%.

But California…

And in California, health insurance claim denials increased 300%.

I’ve heard good things about the federal government having success…

Have you? Let’s look at the success of privatization on the federal level. Privatizing the V.A. led to longer wait times, worse outcomes, and was billions of dollars more expensive. And the U.S. Department of Health and Human Services found that Medicare Advantage plans willfully denied claims to increase profits.

Oh dear…

Let’s turn back to California’s privatization efforts.

Two companies in two years were caught illegally denying thousands of Medi-Cal claims. Separately, Molina was fined for the third time since 2015 for continuing its improper handling of Medi-Cal claims grievances.

If it’s as bad as you say it is, why aren’t hospitals complaining?

They are complaining. Hospitals aren’t happy about being stiffed either. American hospitals lose $262 billion per year on denied claims.

It’s extremely difficult to remain objective in the face of such overwhelming evidence of malpractice that private health insurance should be allowed to exist at all. So, for a candidate who campaigned on single payer, why is Gavin Newsom calling for giving more money to private insurance through laughably small premium subsidies ($70), a state mandate for unaffordable individual insurance, and a further expansion of Medi-Cal — of which 81% is already privately managed? One can only speculate.

Private insurance is a cancer that needs to be cut out of healthcare.

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