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The health insurers designed our financing system, and it works for them

August 6, 2020

Topics: Quote of the Day

By Reed Abelson
The New York Times, August 5, 2020

Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago.

Anthem’s net income soared to $2.3 billion for the second quarter, from $1.1 billion in 2019, while UnitedHealth reported net earnings of $6.7 billion, compared to $3.4 billion for the same three months last year.

Although many hospitals have been overwhelmed by the coronavirus outbreaks raging from state to state, insurers have shelled out billions of dollars less in medical claims in the last three months because expensive, elective surgeries have been postponed in many places. Moreover, people have steered clear of doctors’ offices and emergency rooms in fear of contagion.

The companies’ staggering pandemic profits stand in stark contrast to the scores of small medical practices and rural hospitals that are struggling to stay open. And the earnings are putting a spotlight on the big insurance companies at a time when government officials in many states are facing massive budget shortfalls as businesses collapse, unemployment rises and tax revenues plummet.

But the companies may have even higher profits than is apparent. Some, like UnitedHealth, have large networks of doctors and other health care businesses, in addition to owning giant pharmacy benefit managers. There are no limits on how much these units can make, and many of the units sell their services directly to the insurer.

And in this presidential election year, the companies’ overly buoyant position could also reignite a discussion among Democrats about “Medicare for all,” a proposal that would replace the current private health care system with a government one that guarantees coverage for all U.S. residents.

“We’re looking at the fact that health care can’t be regulated by the marketplace,” said Representative Pramila Jayapal, the Washington State Democrat who is a strong proponent of Medicare for all.

“Who knows what’s going to happen by January?” Ms. Jayapal asked. “It’s entirely possible that everything shifts on health care, within weeks or months after the election.”



By Don McCanne, M.D.

So how is our health care financing system working? For patients, many are losing their health insurance and others are facing financial hardship in spite of being insured. For small medical practices and rural hospitals? They are struggling and many are having to shut down. And for the large private insurers? Record profits!

If we had a single payer Medicare for All program, patients would have no financial barriers to care, and the health care delivery system would be adequately funded to be able to provide all essential services. And the expensive, private, for-profit insurance giants? Gone!

Reject the presidential candidates’ statements in opposition to Medicare for All. The down-to-earth conditions cry out for intensifying our advocacy for single payer Medicare for All. We must give the victors in the November election no choice but to accept the will of the people. No more health care coverage designed of, by, and for the private insurers. No more!

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

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Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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