It should come as no surprise that even with the Big F(ing) Deal of the Affordable Care Act, Americans continue to find health care unaffordable.
But why do we have this horrible health care non-system? After all, the resilience of America's barbaric insurance-based system -- even as all other advanced countries have switched to something closer to single-payer or highly-regulated (i.e. more than America's insurers would ever tolerate) non-profit insurance -- speaks to a political choice.
Follow me through three tweets and learn -- if you did not already know -- that "health insurance companies" are actually like investment banks that pay -- after a lot of fighting with patients and doctors -- some hospitals bills every now and then.
First, it must be understood that like much of American social policy -- the worst costs are socialized (i.e. Medicare for old and disabled, VA for veterans, Medicaid for poor and sicker) and opportunities for profiteering and rent-seeking in the private sector are simultaneously facilitated by government policy (i.e. tax-free employer dollars spent on private insurance policies and mandated -- no public option(!) -- ACA policies for those without a benevolent employer).
Ok, so why the heck would any businessperson want to get into the absurd work of collecting money to subsequently pay out again when sick people seek treatment in America's absurdly over-priced hospitals? Well, because paying for the treatment in those overpriced hospitals -- where prices are marked up by 1,000 percent (or more!) --means collecting a lot of money. And, until folks actually need to visit said medical providers, the insurers have that money -- your premium dollars -- to play with and invest as they wish.
So, ultimately, we have a health care "system" (non-system, if you're feeling cynical, as I often am) literally designed to generate wealth for shareholders as efficiently as possible. Health insurance companies operate like Bank of America or Wachovia, but instead of the banks getting to gamble in the Wall Street casino with your savings account, they get to gamble with your premium dollars. And this, folks, is why it's extremely profitable for insurers to delay paying out -- sending you to the insane asylum as your argue over "coding errors" -- for as long as possible. Wendell Potter explains this quite well.
The longer you can delay paying a claim, the more investment income you can make on the premiums you take in from your policyholders. And investment income is especially important to for-profit insurance companies because it contributes significantly to the bottom line. Shareholders and Wall Street financial analysts like that, even though much of the money on which the investment gains were made should have been paid to health care providers.
You would think hospitals and doctors would be pissed about this, right? (Well, some good doctors are indeed pissed, many of which are primary care doctors operating with very thin margins.) But most hospitals -- and consolidated providers -- are very happy with this arrangement, because the hundreds of rent-seeking insurers have little incentive to negotiate dramatically-lower costs, because higher costs means higher premiums and higher premiums mean more money for the Wall Street casino. (Again, to qualify: if all insurers could negotiate lower provider rates, they probably would, but the disparate nature of a non-system, means --unlike in a single-payer system where one province or national government plays hardball with all providers in negotiations -- that insurers are impotent when it comes to lowering costs. And, as you see, this isn't necessarily a horrible thing when it comes to money for investing.)
So, high-priced, for-profit hospitals win. Insurers win.
And patients?
You lose. Better start designing that GoFundMe page.