Lexington Herald Leader Editorial: Seeking Savings In Health Care?
Seeking savings in health care?
A former insurance industry insider who grew up in East Tennessee and worked in Louisville is speaking out against "big for-profit insurers (who) have hijacked our health care system and turned it into a giant ATM for Wall Street investors."
Wendell Potter, who earlier worked for Humana in Louisville, was head of public relations for CIGNA when he was visiting family a couple of years ago. He read about how thousands of people stand in line for free health care at the Wise County, Va. fairgrounds each year and decided to see for himself.
The experience produced an epiphany.
Potter helped tank health care reform the last time there was a serious effort in 1993. Now he's working with the reformers.
Recently in a PBS inteview with Bill Moyers, he explained something called medical loss ratio: "a measure that tells investors or anyone else how much of a premium dollar is used by the insurance company to actually pay medical claims."
In the early 1990s about 95 cents of every $1 paid as premiums was paid out for health care. Now a little more than 80 cents of each premium dollar actually buys medical care.
Where does the rest of the money go? Some to administrative costs but most into profits for the insurance companies and their stockholders.
One of the proposals in Congress for delivering more health care at lower cost is to mandate a limit on medical loss ratios.
It was with all that in mind that we read Monday about Louisville-based insurer Humana's "higher-than-expected quarterly profit."
Reuters reported that net income rose 34 percent to $281.8 million, or $1.67 per share, from $209.9 million, or $1.24 per share, a year earlier.
Also, the company spent 83.3 percent of its premiums on medical costs, compared with 85 percent a year earlier.
Another boost came from the company's Medicare Advantage plans. Humana's non-government business declined because more people are out of work, but those declines were more than offset by growth in the government-subsidized Medicare business.
President Obama wants to end Medicare Advantage, a dubious Bush-era innovation in which taxpayers subsidize insurance companies to manage the care of elderly Medicare recipients. Medicare Advantage costs 19 percent more than regular Medicare.
Enrollment in Humana's Medicare Advantage plans has grown 12 percent from a year ago and stands at nearly 1.5 million.
Government health care may be the bogeyman in the current debate. But for investors in at least one for-profit insurance company, it's been very, very good.
A former insurance industry insider who grew up in East Tennessee and worked in Louisville is speaking out against "big for-profit insurers (who) have hijacked our health care system and turned it into a giant ATM for Wall Street investors."
Wendell Potter, who earlier worked for Humana in Louisville, was head of public relations for CIGNA when he was visiting family a couple of years ago. He read about how thousands of people stand in line for free health care at the Wise County, Va. fairgrounds each year and decided to see for himself.
The experience produced an epiphany.
Potter helped tank health care reform the last time there was a serious effort in 1993. Now he's working with the reformers.
Recently in a PBS inteview with Bill Moyers, he explained something called medical loss ratio: "a measure that tells investors or anyone else how much of a premium dollar is used by the insurance company to actually pay medical claims."
In the early 1990s about 95 cents of every $1 paid as premiums was paid out for health care. Now a little more than 80 cents of each premium dollar actually buys medical care.
Where does the rest of the money go? Some to administrative costs but most into profits for the insurance companies and their stockholders.
One of the proposals in Congress for delivering more health care at lower cost is to mandate a limit on medical loss ratios.
It was with all that in mind that we read Monday about Louisville-based insurer Humana's "higher-than-expected quarterly profit."
Reuters reported that net income rose 34 percent to $281.8 million, or $1.67 per share, from $209.9 million, or $1.24 per share, a year earlier.
Also, the company spent 83.3 percent of its premiums on medical costs, compared with 85 percent a year earlier.
Another boost came from the company's Medicare Advantage plans. Humana's non-government business declined because more people are out of work, but those declines were more than offset by growth in the government-subsidized Medicare business.
President Obama wants to end Medicare Advantage, a dubious Bush-era innovation in which taxpayers subsidize insurance companies to manage the care of elderly Medicare recipients. Medicare Advantage costs 19 percent more than regular Medicare.
Enrollment in Humana's Medicare Advantage plans has grown 12 percent from a year ago and stands at nearly 1.5 million.
Government health care may be the bogeyman in the current debate. But for investors in at least one for-profit insurance company, it's been very, very good.
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