Mark Gimein, writing in Slate, disputes the commonly held belief that ”Big Insurance” is driving health care inflation. He does a good job of debunking two pervasive myths:
Myth-1: Insurers’ profits are responsible for our health care costs.
Myth-2: Evidence from Medicare shows that a government program can provide the same services for less than the insurers.
Gimein disposes of the first myth by pointing out that insurance profits actually constitute a tiny percentage of our $2 trillion health care bill:
With a membership that included a little more than half of the Americans covered by private insurance, [the five largest] insurers’ profits came to 0.5 percent of total health care costs.
Myth number two, which is based largely on the cost of Medicare Advantage, is debunked thus:
Yes, Medicare Advantage HMO programs do cost the government more than standard Medicare … The bottom line, though, is that its costs come not from insurance company inefficiency or profiteering, but from the extra benefits.
Gimein’s third “myth” is actually not a myth:
Myth-3: The concentration of power in a few large insurers raises health care costs.
He attempts to deal with it by arguing that big insurance mergers put downward pressure on costs. But the low payment rates that mega-insurers insist upon do not, in fact, lower costs. In reality, the access problems they create drive costs up.
Because doctors are often forced to stop accepting patients whose policies impose a negative ROI, people with low-paying policies from mega-insurance carriers often wind up getting primary care in their local ER. This, needless to say, is very expensive.
His confusion on this issue notwithstanding, Gimein does a good job of debunking the myths that big insurance profits and administraive inefficiency contribute in any meaningful way to health care inflation.
Post a Comment