Health insurers thrive, but are patients?

I couldn’t help posting this great analysis of health insurance company doublespeak that I saw in The State on Friday.  Enjoy!

By DAVID LAZARUS Los Angeles Times

It’s a good time to be a health insurer.

Three of the biggest names in the insurance game reported rock-solid profits last week. Aetna said its third-quarter net income jumped 53 percent over the same period last year, to $497.6 million. Well-Point said its profit rose 1.2 percent to $739.1 million. Health Net posted a net income of $62.7 million, compared with a loss of $66 million a year earlier.

Angela Braly, chief executive of Well-Point, attributed the company’s strong performance to “disciplined administrative expense control.”

Aetna CEO Ronald Williams was more expansive. He cited “a reduction in utilization of health care services after the surge we saw in 2009, combined with appropriate pricing and effective medical quality and cost management.”

Well, that sounds fine and dandy until you parse what exactly he’s saying.

That “reduction in utilization of health care services” basically means fewer people went to the doctor. Did we all suddenly become healthier? Not likely.

Jamie Court, president of Consumer Watchdog, a Santa Monica, Calif., advocacy group, said Americans are skipping doctor visits because they’ve switched to plans with higher deductibles or their employers have jacked up co-payments.

“People aren’t getting the care they need because they have to pay more out of pocket,” he said.

This raises an interesting question about the looming reform of the nation’s healthcare system, under which everyone will be required to have insurance. If available coverage is too pricey for people to use, will Americans be any better off, health-wise?

While most insurance policies will cover catastrophic events, it’s entirely possible that healthcare costs will be too high for the sort of routine care or preventive treatment that can head off illnesses before they become debilitating.

Then there’s that bit from Williams about “appropriate pricing.” What’s that mean?

“Rate increases,” answered Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute. “It means higher rates, as well as more aggressive underwriting that excludes people for certain conditions or charges them higher premiums.”

In September, the California Department of Insurance approved a 19 percent rate increase for 65,000 Aetna policyholders. This followed rate increases of as much as 29 percent for Anthem Blue Cross, Blue Shield and Health Net, affecting more than 1 million policyholders.

According to the Kaiser Family Foundation, workers now pay 47 percent more for family health coverage they receive through their jobs than they did five years ago, while wages have gone up only 18 percent.

And what about “effective medical quality and cost management”?

Court at Consumer Watchdog said this is just another way of saying that insurers are denying more claims. “It’s code for some bureaucrat somewhere telling people that a treatment isn’t necessary,” he said.

The average health insurance agent now receives more than 200 requests annually from clients to provide assistance in pursuing a claim, according to a survey released this month by the National Association of Insurance and Financial Advisors, an industry group.

Most agents say they have to contact an insurer at least twice on behalf of a client, the survey found. Eleven percent say they have to make six or more calls in trying to help resolve a claim.

“The most effective cost management for insurers is to decline services,” said Ron Pollock, president of the advocacy group Families USA. “And when there’s a dispute, it’s often very difficult to get a satisfactory result from an insurance company.”

It’s a good time to be a health insurer. For patients, clearly, not so much.

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