Insurers in trouble for the wrong reason: Wall St. wants them to rip you off for even MORE!

There is good news and bad news regarding health/medical insurance. Let’s start with the good:

In his Substack, “Health Care Uncovered” from August 8, 2024, Wendell Potter reports that “Wall St. is disenchanted with Medicare Advantage Plans”. This is good news in the sense that it is good when anyone is disenchanted with these plans, or any aspect of the for-profit health insurance industry. Potter notes that both CVS/Aetna and CIGNA disappointed Wall St. investors with inadequate (from their point of view) profits, compared to a year ago. I also am disenchanted, but for different reasons than Wall St. I am upset that these for-profit insurers continue to rake off such a huge amount of money that was intended, by the workers and employers who paid it, to be spend on actually delivering health care. Investors are upset that these health insurers are not raking in even more.

Potter notes that Aetna president Brian Kane resigned as a result, but appropriately writes:

I am much more concerned about the health and well-being of the 4.3 million people enrolled in CVS’s MA plans and the 6.2 million in Humana’s plans. Sadly, most will find they’re trapped in a circle of hell created by the insurance industry, unable to stay in their current Medicare Advantage plan but also unable to return to traditional Medicare because of what for them will be unaffordable Medicare supplemental policies (most of which are sold by the same big insurers that sell MA plans). Seniors have six months from the date they’re eligible for Medicare to buy a supplemental (Medigap) policy to cover out-of-pocket expenses. If they’ve been enrolled in an MA plan longer than six months, they’ll have to go through medical underwriting. That means that if they’re being treated for much of anything or, God forbid, have a “preexisting condition,” they’ll have to pay an arm and a leg for Medigap policy.

A similar piece of good news is not particularly about Medicare Advantage plans, but the overall health insurance industry/scam, in a story about data-analytics firm MultiPlan (‘Revenues Down and Stock Battered as Data Firm Faces Scrutiny’, NY Times, August 16, 2024). This one is a little harder to understand than the CVS/Aetna and CIGNA stories. They are about the fact that while they are making beaucoup bucks, it is not as much as investors would like. In the MultiPlan case, we have a company that worked for insurers to get reimbursements down (that is, to pay doctors and other healthcare providers less) and made money from it. For example, if a doctor billed $100 and MultiPlan told the insurer to only pay $50, that’s more money for the insurer (and MultiPlan), and the patient can be on the hook for the other $50. (Of course, it’s never only $100, or $50.) Since they do this mainly for “out of network” care the amount that you (the patient) can get stuck with having to pay can be – a great deal. (This can happen even when you choose an “in-network” doctor and hospital, since other doctors – like in the ER, or radiology, or even the “assistant surgeon” – can be out of network. And the ambulance almost always is).

This article was a follow-up to an earlier exposé in the NY Times ‘Insurers Reap Hidden Fees by Slashing Payments. You May Get the Bill.,’ April 24, 2024, in which the amount the patient could get stuck having to pay was as much as $100,000 – or more. The good result of this first article was a lot of opprobrium aimed at MultiPlan, resulting in some insurers being more reluctant to use them (because of the bad publicity, not because they save them money; apparently they can use other less-notorious data analytics firms to save them money), so MultiPlan is in trouble as the more recent NY Times article documents. Good. I love to see them in trouble.

The bad news is that it is likely to be you and other regular people who are screwed. There is already evidence that the pressure from investors to go back to making not just great but obscene profit margins is affecting CIGNA, CVS/Aetna, and other insurers, who are denying more claims, making it even harder to get the care that you need. Potter notes that

Humana said last week it planned to jettison “a few hundred thousand” of its Medicare Advantage enrollees that have become unprofitable. CVS says it will get rid of about 10% of its MA enrollment, which would be around 430,000 of America’s seniors and disabled people.

That’s a lot of seniors who will lose their medical coverage. I have often been critical of Medicare Advantage plans (sometimes called, more accurately, Medicare Dis-Advantage), which are NOT Medicare but are private insurance plans, usually HMOs or PPOs, paid for by Medicare funds. One of the major reasons for my criticism is that because they are private insurance, they can (and often do) deny coverage for care even when the care is approved by Medicare. Recent legislation has required these MA plans to cover Medicare-approved care, but in fact they still often deny claims. Indeed, it is often the modus operandi for these companies. They may approve the claim if you appeal, but the vast majority of clients do not appeal, and probably don’t even know that they can. If fined by the Center for Medicare and Medicaid Services (CMS) it becomes a “cost of doing business.”

But the “jettisoning” of hundreds of thousands that Potter refers to illustrates another big problem with MA. As with all insurance – not just medical – companies make money by collecting premiums and paying as few claims as possible (although medical insurance companies seem to have taken this to the extreme). One effective way to do this for healthcare is to insure healthy people. They, or their (usually former, if they’re on Medicare) employer pay the premiums but they don’t cost much money in claims. And they love getting free eyeglasses and hearing aids and gym memberships, which cost the insurance companies very little. The problem is that sometimes previously healthy people get sick, and this becomes more and more common as they age. Remember that in any given year approximately 5% of the people account for about 50% of healthcare costs, but they are not necessarily the same people the next year. Some folks get better, some folks get worse, and some really sick people die. MA plans have long “encouraged” their sickest (= most costly) patients to consider switching to traditional Medicare. Now they will be more than encouraging; they’ll drop those high-cost “losers”. Maybe you.

The MultiPlan case got good (that is, bad) coverage from the original April NY Times investigation, which resulted in it losing business as reported by that newspaper in August. But the insurers will get another data analytics firm to try to screw doctors and other providers, and the patient, you, will still be caught on the hook for many of those dollars. The system is not set up to help or protect you, and it has relatively few sanctions against companies whose business model is to find any way to screw you that will make them more money, and to use that money to hire lawyers and others to find the loopholes and to pay the politicians to ensure that they are not closed too tightly.

It’s kind of like a sport where one team able and willing to bring in ringers, violate the rules, commit all sorts of fouls and infractions, and at worst get a slap on the wrist for it. Not a fair game, but heck, that team’s owners are paying off the referees and the league.

There’s another way to do it. Absolutely strict regulation to ensure the interests of patients are the ones that are protected, and protecting the profits of the insurers is given zero weight. Penalties that are strictly enforced, and draconian and include going out of business. Even better: prohibiting profit making in any healthcare endeavor. In some countries, like Switzerland, there are private insurers, but they all have to offer the same comprehensive product, charge the same rates, and be non-profit. So how do they compete? Customer service, can you imagine!?

I like that approach!

Racism and lack of social services: The status of women's health care in the US

A recent publication from the Commonwealth Fund is the 2024 State Scorecard on Women’s Health and Reproductive Care in which they rank all the states (plus DC) for how well that care is provided and the health status of women that results. The map below gives an overall sense (darker is worse), and the entire ranked list can be found in an interactive table in the document. 

The first thing that we see is that there are no real surprises. Massachusetts is at the top and Mississippi is at the bottom. The other top and bottom states are the usual suspects for almost anything that is beneficial to people, with the Northeast doing best and the old Confederacy doing the worst. There are always some minor shifts within those groups, and in this ranking we see that Louisiana* and South Carolina are only “worse than average” not in the “bottom performing states”, while disappointing to me, Arizona and New Mexico are in the lowest group. The reasons are a little different in different states; the Arizona legislature is (narrowly; we hope to flip it this year) controlled by Republicans who are as mean and nasty as those in the deep south. New Mexico is controlled by Democrats, but it is very poor. Poor is a big component of health status, and its fingerprints are all over this data on women’s health.  ‘Despite a small rebound in women’s life expectancy in 2022, it remains at its lowest since 2006,’ says the report.

Abortion care – access to it and the quality of it – has dominated the national political discussion. I don’t want to minimize it; it is incredibly important that women can have abortions, it is a privacy issue, and it will hopefully have major negative repercussions for the party whose agenda is to limit it. That the greatest restrictions on abortion are in the same states that have the worst women’s health status is neither a coincidence nor a surprise; the people who control these states and are anti-abortion are also racists and are unwilling to provide funds to improve the health standards of people who are women, minority, or poor – and especially all three. But it goes far beyond abortion:

For health outcomes, we measured all-cause mortality, maternal and infant mortality, preterm birth rates, syphilis among women of reproductive age, infants born with congenital syphilis, self-reported health status, postpartum depression, breast and cervical cancer deaths, poor mental health, and intimate partner violence.

Abortion is not the major component of poor reproductive health status. Maternal mortality rates are shockingly high in the southeast, and worst in the Mississippi Delta. The US overall does not do very well in this area, especially as it is the richest country in the world. Data from the CIA (!) shows that in 2020, the US maternal mortality rate overall was 21/100,000, tied with Lebanon, Grenada, and Malaysia and just slightly worse than the West Bank or (pre-war) Gaza Strip. This was (and remains) much higher than Canada (11), UK (10), and most of Europe, including eastern Europe at 5 or less! (Note, showing the same dramatic racist differences as in the US, Israel is at 3). Of course, this overall rate in the US is driven by the states with the highest rates, with the worst states having a range of 34.1-51.7! While this is largely the result of excessively high rates in minority women, it is worth noting that the maternal mortality rate for white women in the US is over 19!

 

This is a good time to discuss the segmentation of results for maternal mortality (and all-cause mortality, and really most things) by race or ethnicity. In the bizarre, perverted, and of course racist excuse provided by many (racists) for why the US’ maternal mortality is so high compared to civilized countries, it is often said “it’s the minorities that drive the rate up”. In addition to ignoring the excessively high rate for US whites (19) it is scarcely an excuse; indeed, it is an indictment. It is not only that the US, unlike civilized countries, does not provide health care for everyone, essentially free of charge at the time of service (that is, paid for by tax revenues, as well as costing a lot less because of the elimination of the incredible profits extracted by middlemen such as insurance companies in the US). It also provides lousy social services of all kinds, not ensuring, as civilized countries do, housing, food, and education for everyone. These (the “social determinants of health”) are even more important than medical care in creating improved health status. And, while other countries do spend much more money than we do on providing them, the total cost per capita is probably less than what the US spends on health care alone! Of course, much of the spending (particularly on social services and health care for the poor, like Medicaid) is on a state basis; that is why there are such differences between the Massachusetts’ and Mississippi’s in this Commonwealth Fund study. And what are the practices that work? Again, no surprise:

In our scorecard, states with the lowest rates of maternal mortality had:

·       more maternity care providers (Vermont #2, Connecticut #3)

·       fewer women with no prenatal care (Vermont #1, California #3, Connecticut #5)

·       fewer women with no postpartum checkups (Vermont #1)

·       fewer uninsured women ages 19–64 (Vermont #3)

 

It cannot be stated too strongly that public funds should support a public social safety net, not bloat the profits of private companies as they do here in the US! This is most well-documented for the piggish pharmaceutical industry and the entirely unnecessary (indeed, far worse than unnecessary, destructive and evil) for-profit health insurance industry, which I have discussed many times. But it is also the other parts of the health care industry, particularly delivery systems (e.g., hospitals). Yes, the for-profits, hospitals and nursing homes and other facilities, especially those run by corporations. But it is also the ostensible “non-profits”, which do their best to emulate for-profits by doing everything possible to exclude patients without insurance or with Medicaid, pay their CEOs (and other C-suite executives) exorbitant salaries, and channel huge earnings into subsidiaries that actually own or invest in for-profit enterprises! This is documented in Why many nonprofit (wink, wink) hospitals are rolling in money by Elisabeth Rosenthal (Washington Post, July 29, 2024) and discussed by Don McCanne in Health Justice Monitor ‘Not-for-profit care begets profits’. Dr. McCanne cites a study by KFF showing even a program providing “street medicine”, healthcare for the homeless, in California is making money by getting huge amounts of Medicaid funds. Providing health care to homeless people is a good thing, something we need more of. If I had my druthers, I would rather see them making money than huge “non-profit” hospital systems (or of course straight for-profits, although those at least pay taxes), but they shouldn’t be either.

In health care, and in all social service, all the public money should go to providing direct care (OK, maybe with a 2% overhead, like Medicare – but NOT Medicare (Dis)Advantage – has). Zero dollars should go to profits (or “excess” income that can be invested for profit), bloated salaries, and the like.

We have too many people, women and others, dying because of the lack of such care.

 

*Louisiana just put the two drugs used for medication abortion, mifepristone and misoprostol, on its state’s controlled dangerous substances list, like narcotics. So look for LA’s ranking to drop!