Unaffordable Healthcare: Insurers Guilty of Price Gouging
Congratulations! By now you have been forced to decide what kind of health insurance to purchase for 2016, and if you choose not to choose, you will be fined up to 2.5 percent of your income. But never fear because President Obama said that we can keep the plan we had. Oh wait, that’s no longer true. He also said that our premiums wouldn’t increase by more than 10 percent. Again, not true. Depending upon where you live, premiums are going to rise by 25 to 50 percent. Then there’s the part where he said we would never be turned down for coverage.
That’s sort of true, and sort of not true. Yes, you can get coverage, but if you can’t afford the premiums, your insurance will be canceled. And even if you can make the monthly payments, if you or a loved one has a prolonged or catastrophic illness, you still have to pay the deductible, and (under most plans) up to 20 percent of the hospital bill. That means if your hospital bill is $50,000, you’d have to come up with about $12,000. Perhaps I’m missing something here, but most families don’t have $12,000 lying around.
So how can the deck continue to be stacked against individuals and families under the so-called Affordable Care Act? Because the healthcare system itself has not been reformed. For the sake of brevity, let’s just focus on the actual cost of insurance. If Blue Cross wants to raise our premiums by more than 10 percent, all they have to do is write a justification report to the State, then they pretty much get whatever they want. That’s because most State Insurance Commissioners either can’t or won’t do anything to prevent the increase. Says healthcare expert, Professor Timothy Jost of Washington & Lee University, “Nothing in the Affordable Care Act prohibits them (insurers) from proceeding.”
Perhaps President Obama should have fought to include rate hike protections in his reform package, but I doubt Congress would have approved them anyway. It’s a moot point, though. According to Washington State Insurance Commissioner Stephanie Marquis, “The large cost driver in what people are paying does not have to do with healthcare reform … it would continue to happen regardless of whether we had healthcare reform.”
Earlier this year, correspondent Robert Pear wrote in the New York Times, that Blue Cross Blue Shield has sought (and will probably get) rate increases that average 23 percent in Illinois, 31 percent in Oklahoma, 36 percent in Tennessee, 37 percent in Kansas, and 54 percent in Minnesota. Pear also reported that here in North Carolina, Big Blue has asked for an average 25 percent rate hike, but many people with individual plans are experiencing as much as a 50 percent jump in monthly premiums.
There’s no way to justify or sugar coat what Blue Cross is doing. They can try and explain their exorbitant rate increases by blaming doctors and hospitals, but the truth is, Blue Cross Blue Shield is guilty of price gouging, pure and simple. And price gouging is illegal. Generally speaking we only hear about price gouging during or immediately after a natural disaster, such as when a gas station operator jacked up his prices after two gulf oil refineries were knocked off line following Hurricane Katrina. But even during disasters we’re not always protected against price gouging. CBS Money Watch reported that after super storm Sandy hit the east coast, only 7 of the 13 states struck by the storm had laws against price gouging. Today, 34 states have laws in place, including here in North Carolina. The question is, will they enforce them?
North Carolina General Statute 75-38 prohibits, “excessive pricing during states of disaster, states of emergency, or abnormal market disruptions.” So far, Attorney General Roy Cooper has a pretty good track record when it comes to punishing companies for price gouging during a natural disaster, but he’s never lifted a finger to stop Blue Cross from gouging its customers, even during and following the great recession of 2008. And if that recession doesn’t constitute a market disruption, then I don’t know what does. Millions of people lost their jobs, and families are still struggling to recover.
The obvious long-term fix to our healthcare crisis is to adopt Sen. Bernie Sanders’ solution, a system of so-called “Medicare for all.” The fact is nearly every other industrialized nation in the world offers its citizens free healthcare, so why not us? Yes, those systems are funded by taxes, and yes there can be a waiting list for certain types of non emergency surgery, but at least people in those countries don’t lose their homes and their savings trying to pay for healthcare. Here in the land of the free, the number one reason for personal bankruptcy is medical bills, and that is a disgrace. At most, it will take a miracle for Congress to pass Sanders’ plan. At the very least it will take a long time. And so, in the meantime, there are a couple of quick fixes that can prevent financial ruin for the average family.
One solution is to legislate a cap on insurance premiums. This approach is not without precedent. Back in 2013 when States were trying to get a handle on how to implement ACA, Maryland’s Attorney General Douglas Gansler and the Maryland Insurance Administration sought a cap of 5 percent on health insurance premiums until such time as it became clear what the actual price tag of ACA would be. Gansler’s actions were precipitated by Care First Blue Cross Blue Shield’s attempt to raise premiums by up to 150 percent.
Another short-term solution is for States to enforce their own laws against price gouging. If he broadly interpreted and applied statute 75-38, Attorney General Cooper could unilaterally drop a fly into Big Blue’s greedy ointment. Of course, such an action would be challenged by BCBS, and perhaps eventually struck down by the courts, but you don’t know if a solution will work unless you try. Right now, families in North Carolina need an advocate who will stand up to insurance monopolies. Roy Cooper could be that advocate, especially since he needs our help to get a job promotion next fall. Maybe we just need to gouge him a little. !
JIM LONGWORTH is the host of “Triad Today,” airing on Saturdays at 7:30 a.m. on ABC45 (cable channel 7) and Sundays at 11 a.m. on WMYV (cable channel 15).