Red, Blue and Purple Redux: Don't let them divide and conquer!

I wrote Red, Blue, and Purple: The Math of Health Care Spending back on Oct 20, 2009, and have referred to it several times since. It is important because not everyone is sick at the same time, so the percentage of sick people in any given year is relatively low.

I included these charts:

 

The colors represent more or less the same groups of people; in any given year 5% of the population accounts for 50% of the health care costs, while half the population accounts for only 3%. This means that, in any given year, a large percentage of our population (generally younger, and mainly healthier) does not have significant medical problems and thus does not incur significant medical expense. This is good for them, but it also can make them relatively happy with their health insurance. When you don’t need it, insurance of any kind is great, except that you continue to pay premiums. Ignorance is bliss. But when you get sick is when you find out how good your health insurance is – or is not. Does it cover the treatment that your doctor recommends? Does it say it will, but require prior authorization that, while not medically indicated, can delay your treatment. Maybe for too long ()? Does it cover your doctor? Does it cover the hospital they use? Does it cover the other doctors in the hospital you will be billed by (e.g., ER, radiology, laboratory, anesthesiology, etc.)? Does it require big co-payments? Or any?

It is also the basis for a lot of the decisions that health insurance companies make. In a recent post on the “Health Care Un-covered” substack, Ron Howrigon (Feb 3, 2026) demonstrates how insurance companies can use these numbers to their advantage (i.e, to not pay):

So, you have been named the new CEO of UnitedHealth, and you have this wonderful idea. Put policies in place to deny, delay or refuse to pay for care. These policies are going to upset 5% of your membership. The members impacted by these policies are expensive members with chronic diseases like MS, cardiac disease or cancer. Let’s say that half of those members get so upset that they leave UnitedHealth and join one of your competitors. That means you take a 2.5% reduction to your revenue but a 25% reduction to your medical expense. Profits go up and life is good. Well, unless you are one of those patients that didn’t get the medication or treatment that you needed that is.

You see? They don’t get screwed – you do. They don’t care if you leave their insurance company if you are costing them money. Ideally, insurance companies want to collect premiums from people (or their employers, or the government for programs like Medicare and Medicaid) who will never use them! Indeed, one tactic that Medicare “Advantage” (MA) plans use is urging people who get sick to consider leaving their program and going on to regular, traditional Medicare (TM). Those “free” glasses and hearing aids and gym memberships that the MA plans offer seemed great at the front end, but actually having them cover the cost of your being sick and in the hospital and needing procedures would be better.

It is too bad if people do not realize that, while they may be in the purple or even blue groups today, not needing too much health care and not costing that much, that could change tomorrow. Much of that “purple” group is made up of people with one or more chronic diseases, predominantly older, who go to the doctor a few times a year and maybe have a short hospitalization or two. But when those chronic diseases worsen, when you need surgery or other procedures, or need to be in an ICU, then you can quickly become “red”. The shifts can be even more dramatic for young, healthy people. One car accident and a teenager can need multiple surgeries and become a very high-cost patient. One premature baby who needs to be cared for in the neonatal ICU and your young family skyrockets into the high-cost group. Or cancer – a new and unexpected diagnosis can change anyone of any age into a high-cost high utilizer.

Since I wrote the original piece in 2009, many more people have cottoned to the truth of the situation, because they, or their family members, or their friends have experienced movement into the high-need, high-cost group. It may be only 5% of people in any given year, but those years mount up, and they are not the same people year-to-year. For starters, a significant percentage of those who were in that 5% last year are no longer with us this year. It is commonly noted that end-of-life care accounts for a huge percentage of the cost associated with someone’s care in their lifetime, but when that lifetime is over, others move into the 5%. The fact is that we are all in this together (well, except for the insurance company executives and really wealthy folks) and policies that don’t hurt us individually this year can hurt us very much next year.

In the substack post cited above, Ron Howrigon raises the specter of a major economic event, “correction” or recession à la the housing bubble of 2008, except maybe worse because the health sector of the economy is three times as large. The problem identified above is only one of three major problems with the health insurance industry that he identifies, as he makes the case that it is built on flawed economic assumptions just as the housing industry was. Such economic implosions are not, in themselves, good for us, but continuing the way we are is also not. For many years, the “economy” has grown, but all that growth has gone to corporations and multi-billionaires and not to regular people (indeed possibly more than all the growth, since the imbalance is worse). While there may be some hard-working people who are fine with this even though they are struggling to pay the rent and buy food and gas – it takes all kinds – most of us are not. If the health care industry “fails” and then must be rebuilt to actually take care of Americans’ health, that would be a good thing. Although, judging by the response of the government to the financial crisis of 2008-09, that would be a dubious outcome; they’d probably bail out the health insurers. Unless we all can get together to stop them!

Divide and conquer has long been a strategy used by rulers and the powerful. It still happens and, so far, it still works. On Dec 30, 2025 I published on this blog Yes, Rep. Van Drew, there IS a solution!, which had appeared 3 days earlier as an Opinion piece in my local paper, the Arizona Star. I note that Medicare for All is a solution to a huge part of this problem, that there are bills in both the Senate and House (S. 1506 and HR. 3069) to create it, and that a large majority of the American people, in poll after poll, support it.

While the people are increasingly understanding how they are being screwed for the benefit of the rich and powerful, in this important case insurance companies, legislators seem to have not gotten the message. This could be in part the result of money being given to them and their campaigns for re-election by those same companies! This cannot be understood as anything but – graft! And, to overcome this, our voices – and our votes – need to be loud and clear so they can be heard by those legislators and policy makers. Pass laws and make policies that benefit the health and pocketbooks of the mass of the American people, and do not pay attention to the enrichment of health insurance companies, their executives, or their billionaire private equity owners. In the balance between the health of the people and the wealth of corporations, the latter should get NO weight!

Write to them, tell them, call them daily!