Denial of coverage leads to big profits for insurers

Other views

By Pat Justis | For The Olympian • Published May 14, 2008

• Comments (0)

Health insurance companies make staggering profits by denying coverage to people who need health care. Premium costs rise and coverage shrinks. When corporate greed trumps human suffering, it is time to regulate the villains.

Health insurance company profits are obscene. WellPoint, parent company of Blue Cross, earned $3.09 billion in profits in 2007, a 25.6 percent increase since 2005. UnitedHealth garnered a $4.16 billion profit, a 25 percent increase since 2005. UnitedHealth and WellPoint made the top 25 most profitable Fortune 500 list — great for shareholders — but the ethically bankrupt profits were raked off the backs of U.S. families.

Since 2000, employment based health insurance premiums have increased 100 percent, compared with cumulative inflation of 24 percent, and wage growth of 21 percent for the same time period. In 2007, premiums rose 6.1 percent.

Employers struggle to afford insurance premiums and pass on a larger percentage of costs to employees while offering health plans that cover less care. Employers can offer health insurance, but premiums are too high for some employees to afford. In Washington, 79 percent of uninsured families have at least one person who works either full or part time.

Health insurance companies love to deny coverage for pre-existing conditions and cancel coverage when enrollees become injured or ill. In February, the Los Angeles Times broke a story about Blue Cross. The company sent letters to California physicians asking them to report patient conditions so it could use the information to cancel coverage for new enrollees, telling doctors Blue Cross had the right to drop patients with pre-existing conditions.

Blue Cross (and other health insurance companies) had been sending those letters out for years. The Los Angeles Times report sparked a large public outcry; physicians were particularly outraged with Blue Cross's attempts to intrude on patient privacy. Blue Cross agreed to stop sending letters to doctors in California.