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Jackie Wolf: Insurers are the fly in the health care ointment

With the real unemployment rate over 14 percent, GDP barely growing at 2 percent and most Americans looking at stagnant or falling real income, health insurers are cashing in.

Health insurers have mastered the art of raising revenue while containing costs by attracting the young and healthy and dropping coverage on the older and sick. To do this, insurers employ a cadre of administrators to review and deny treatment requests while raising premiums, co-pays and deductibles. Now the Affordable Care Act (2010), aka Obamacare, guarantees private health insurance companies a whole new generation of younger, healthier people paying insurance premiums.

The unnecessary cost of the private health insurance industry is staggering.

Professor Gerald Friedman of the economics department of the University of Massachusetts Amherst has documented how in Massachusetts alone the private health insurance system wastes more than $16 billion. Because doctors, for example, need to bill many different plans with many different provisions, they have to employ more office and billing clerks than nurses. Doctors spend, on average, 20 percent of total revenue for billing and insurance — over $68,000 per physician per year.

The confusion and complexity of billing is enough to make a person sick, or sicker, once they are not well.

Back in February, I slipped on ice, and could not walk without support. An X-ray revealed no broken bones but a painful hip contusion. The injury healed in six weeks without surgery or physical therapy. Nonetheless, the cost of examinations and X-rays resulted in no less than six bills to four different providers and hundreds of dollars for deductibles and co-pays.

There is a much better way to provide health insurance guaranteeing everyone affordable, high-quality care with your choice of physicians and health care providers.

An Improved Medicare for All plan would eliminate the costly, wasteful private health insurance market. Everyone would pay into the plan — just as we do for Medicare — through payroll taxes that would be less than we now pay for health insurance premiums. Doctors, hospitals, labs and other health care providers would bill and receive payment through one agency, simplifying the process and saving billions.

By eliminating insurance company oversight, it would protect patients’ health care by ensuring doctors’ treatment plans were honored.

An added bonus: It would save billions of dollars in public-sector costs, which could support the state budget and budgets of towns and municipalities as well as our families. Businesses would benefit by getting rid of the headaches from negotiating health insurance plans.

In Massachusetts, legislation to enact this plan is called “An Act to Establish Medicare for All Massachusetts.” It is time we stopped needlessly wasting money for private health insurers — padding their wallets and seeing their profits soar. The League of Women Voters of Massachusetts supports this bill and hopes you will, too. Talk to your legislators about it.

Jackie Wolf is a member of the Health Care Committee with the League of Women Voters of Amherst.

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