Posted on September 2, 2008

For-profit health insurance has outlived its usefulness


By Oliver Fein, MD
The Philadelphia Inquirer
Posted on Sun, Aug. 31, 2008

The Census Bureau reported Tuesday that the estimated number of Americans who lack health insurance had dropped to 45.7 million, compared to 47 million in 2006.

The slight improvement is entirely due to an increase in the number of people covered by government health insurance programs such as Medicare and Medicaid.

Even so, the lower number remains a national scandal, yet the Bush administration tends to discount such reports. The president says that many of the uninsured are young and healthy people who don’t want to buy insurance, presumably because they think they don’t need it.

But this flies in the face of a new study by a team of Harvard researchers who report that 11.4 million of the nation’s uninsured are working-age adults with one or more chronic illnesses, including hypertension, heart disease, diabetes, asthma and cancer. These millions hardly fit the young-and-healthy profile.

These are high-risk individuals whom the private insurance industry strives to avoid. Many of them, were they to seek insurance in the individual market, would face sky-high premiums and severe pre-existing-condition clauses, excluding coverage for their chronic conditions. Many of them are simply “uninsurable,” yet they badly need care.

According to Dr. Andrew Wilper and his team, whose research appears in the Aug. 5 edition of Annals of Internal Medicine, working-age adults with one or more chronic physical illnesses were much more likely than their insured counterparts (by a factor of 3.6 to 1) to report that they had not seen a health professional within the last year.

Many no doubt stayed away from the doctor’s office because they could not afford it. A disproportionate number end up in emergency rooms with worsened conditions, risking serious complications or death.

The United States ranks highest in preventable deaths among 19 developed nations, and the Institute of Medicine estimates that 18,000 Americans die unnecessarily each year because they lack health insurance.

The problem of uninsurable Americans has surfaced in the presidential campaign. Sen. John McCain’s proposals would undermine employer-sponsored health plans and push millions, including some with chronic illnesses, onto the individual insurance market. This is a sure-fire formula for increasing the number of uninsured and uninsurable adults.

McCain counters that uninsurable Americans can turn to government-sponsored high-risk pools. While 35 states currently offer such quasi-public insurance pools, the premiums sometimes cost two or more times the amount charged to healthy young people. As a result, only a few hundred thousand people participate nationwide. And because of rising costs, many of these plans are failing financially.

The frequency of chronic illness among the uninsured also poses challenges for individual mandate proposals, including those associated with Sen. Barack Obama. While Obama’s plan includes a requirement that insurance companies accept anyone who applies for coverage and sets up a new public plan to provide another coverage option, several states that have adopted this kind of model (Massachusetts being the most recent example) have invariably abandoned them, citing uncontrollable costs.

The plight of the uninsured and uninsurable shows how the for-profit, private health insurance model of financing health care has outlived its usefulness. Originally conceived as a nonprofit enterprise (e.g. Blue Cross), the industry is now bent on maximizing profits by screening out the sick and minimizing claim payments.

It’s time we move to a single-payer national health insurance program, an improved Medicare for all. By putting an end to private insurance company overhead, advertising, executive salaries and shareholder profits, estimated to be $350 billion a year, we could guarantee quality care to all.

Most industrialized nations have such a system, and their per-capita costs are one half of ours or even less. What are we waiting for?

Oliver Fein is associate dean and professor of clinical medicine and public health at Weill Cornell Medical College in New York and president-elect of Physicians for a National Health Program