Three Crumbling Health Insurance Pillars

July 19, 2024

Healthcare Affordability and Value Indexes 2021-2024
West Health-Gallup
July 2024

Cost security among U.S. adults dipped to its lowest level ever in 2024, down 6 points since 2022, to just 55%. This decline mainly reflects adults aged 50 to 64 (down 8 points to 55%) and 65 or older (down 8 points to 71%). Adults under 50 dropped 5 points to 47% in 2024. For all three groups, these are historic lows.

Cost Insecure (37%): Recently unable to pay for care or medicine or to easily access quality care. 3-4 times more likely to cut back on basic household spending and to skip a medical procedure due to the cost.

Cost Desperate (8%): Recently unable to pay for care or prescribed medicine and feel that they lack access to affordable quality care. Half are “extremely concerned” about being able to pay for prescriptions and healthcare in the next 12 months.

2025 Proposed Medicare Physician Fee Schedule Highlights Urgent Need for Medicare Payment Reform
Press Release from Steven P. Furr (President, American Academy of Family Physicians)
July 10, 2024

The Medicare program is essential in helping millions of people access comprehensive, continuous primary care. While the proposed 2025 Medicare physician fee schedule includes some proposals to strengthen primary care, its 2.8% reduction in the Medicare conversion factor once again highlights the urgent need for congressional action to ensure that physician payments keep up with the costs of running a practice.

Family physicians provide high-quality care to our patients and communities, but inadequate, falling Medicare payment rates create barriers to care for beneficiaries and strain physician practices. As a first step, Congress must enact an annual inflationary update to help physician payment rates keep pace with rising practice costs. Any payment reductions will threaten practices and exacerbate workforce shortages, preventing patients from accessing the primary care, behavioral health care, and other critical preventive services they need.

Private Medicare Plans and Vertical Integration Yield UnitedHealth $15.8 Billion in Profits Between January and June
HEALTH CARE un-covered
By Wendell Potter
July 15, 2024

UnitedHealth Group, the largest health insurance conglomerate by far, continues to show how rewarding it is for shareholders when corporate lawyers find loopholes in well-intentioned legislation – and game the Medicare Advantage program in ways most lawmakers and regulators didn’t anticipate and certainly didn’t intend – to boost profits.

UnitedHealth announced this morning that it made $15.8 billion in operating profits between the first of January and the end of June this year. That compares to $4.6 billion it made during the same period in 2014. One way the company is able to reward its shareholders so richly these days is by steering millions of people enrolled in its health plans to the tens of thousands of doctors it now employs and to the clinics and pharmacy operations it now owns. This is the result of the hundreds of acquisitions UnitedHealth has made over the past 10 years in health care delivery as part of its aggressive “vertical integration” strategy. 

 

Comment by: Jim Kahn

Three pillars of functional health insurance are: (1) assuring financial access for patients, (2) paying providers fairly, and (3) directing financial resources to care.

But these pillars are crumbling:

(1) nearly half of adults lack secure financial access due to lack of insurance and under-insurance, with one in 12 “cost desperate”.

(2) In Medicare, while Medicare Advantage plans overcharge by >$100 billion per year, front-line doctors face pay cuts. I think this reflects a CMS determination (terribly misguided) to grow Medicare Advantage. There are similar or worse underpayments in Medicaid (health care for the poor) across the nation. While there are discussions of payment reform, they typically steer clear of single payer.

(3) Insurer-conglomerates rake in tens of billions in profits, enriching shareholders while stiffing providers, patients, and pharmacies. (Add to this the administrative burden on providers of dealing with hundreds of insurance plans.)

We’ve reported elsewhere on falling longevity in the US, worse than in other nations.

The failure of our fragmented, profit-driven insurance couldn’t be clearer. The success of unified, not-for-profit insurance in >30 other wealthy nations couldn’t be clearer. It is efficient and humane to cover everyone with the same excellent insurance. Patients prosper, providers prosper. Investors play in other economic sectors.

Alas, too many groups have an ideological and/or financial stake in the current exploitive and deadly mess. We must stay the course; eventually sanity and single payer will prevail.