Insurance companies doing fine without an Obamacare repeal

McCain Congress Health Overhaul
Sen. John McCain (R., Ariz.) got out of his sickbed after a brain cancer diagnosis to participate in the Obamacare repeal debate.

My four brothers and I never went to a doctor’s office when we were growing up. On those rare occasions when my mother’s remedies and treatments didn’t produce the results she sought, Dr. Plump was summoned to our housing project apartment in Birmingham, Ala., to examine us, pronounce his diagnosis, and perhaps fill out a prescription.

My father would settle with Dr. Plump directly. There was no Medicaid and Daddy, a truck driver, couldn’t afford paying premiums to an insurance company to handle charges owed to a physician for a house call. Neither was a middle-man agency involved when the hospital was paid for maternity care when my mother delivered her five sons.

Doctors’ bills and hospital charges apparently were more manageable for poor families in the 1950s. For certain, the bills more accurately reflected the true cost of the medical services provided. There were few of the upcharges so prevalent today, not just to cover the cost of advanced medical technology but also to ensure the profit margins of insurance companies.

Insurance company profits have become excessive, even in a country where it’s heresy to place limits on any enterprise’s ability to make money. Consider the $2.6 billion in reserves that Horizon Blue Cross-Blue Shield of New Jersey had last year. Gov. Christie tried to get legislation passed allowing him to pilfer $300 million to pay for New Jersey’s opioid addiction programs and other needs. His crude attempt to force his will was wrong. But he made a point.

Blue Cross, a not-for-profit company, is required to have a reserve to cover unexpected costs. But the size of the reserve appears unseemly when the insurer is also lavishly paying its executives huge salaries and bonuses while policyholders struggle with high premiums and copayments.

Blue Cross isn’t breaking any law, not even the Affordable Care Act, which didn’t completely deliver on its promise to check the highhandedness of health insurance companies. But neither is the insurer hurting for money.

The major insurance carriers are thriving despite any losses incurred after Obamacare forced them to cover sicker, poorer patients. That’s why their complaints about the ACA weren’t as loud as the gripes of Republican members of Congress.

GOP lawmakers were pressing a political agenda that has little to do with helping people gain access to health care. If it were about that, they wouldn’t be trying to cut Medicaid funding.

America’s health insurance companies have found ways to absorb any Obamacare losses and make even more money. Combined profits for the nation’s 10 largest health insurance companies have grown from $8 billion to more than $15 billion since Barack Obama was elected president in 2008.

United Health Care, the nation’s largest health insurer, blamed Obamacare for an $850 million loss in earnings last year, but the share price of the insurance company’s stock has increased nearly 1,000 percent since the ACA became law in 2010.

During that same period, the Standard and Poor’s stock index returned 135 percent on investments but investments in United Health, Aetna, Anthem, Cigna, Humana, and Centene collectively returned nearly 300 percent to stockholders, including dividends.

Those stock performances are why Bespoke Investment Group founder Paul Hickey recently questioned whether the nation’s health insurers “really need to be rescued by Congress.” The rest of America should be raising the same question, instead of accepting as truth the Republican spiel about Obamacare.

The big insurance companies have found ways to protect their bottom lines by diversifying their business, applying clever accounting devices, and taking advantage of Obamacare’s expansion of Medicaid.

Most people don’t know it, but many states pay private insurers to manage their Medicaid programs. Some insurance firms also handle Medicare accounts. Others earn huge fees managing insurance programs for large companies that are self-insuring their employees.

Even with their strong profits, some insurance companies have either abandoned the ACA exchanges in some states or jacked up premiums for Obamacare policyholders to offset their coverage costs when the ratio of healthy policyholders is overwhelmed by those with expensive health problems.

Before Obamacare, insurance companies could simply declare sick people they didn’t want to insure “uninsurable.” They saw an opportunity to take advantage of the Republicans’ playing politics with Obamacare to dial back some of the ACA’s directives.

They wanted to stop insuring people with preexisting conditions and go back to charging older people five to 10 times more for their policies.

But it looks as if they won’t get away with it. They got a boost when Sen. John McCain got out of his sickbed following his brain cancer diagnosis to cast a decisive vote allowing the Senate to begin debate of the Republican bill to repeal and replace the ACA. But that was quickly followed by the defeat of three repeal/replace bills, with three Republicans, including McCain, joining Democrats and two independents, to cast a final no Friday.

Because they promised for seven years to kill Obamacare, the Republicans didn’t want to give up without passing something. They were being egged on by President Trump, who made the same promise during his election campaign and is blaming them for the effort’s failure.

Political considerations are not supposed to be what motivates the men and women elected to protect the public’s interest.

The public isn’t interested in seeing the number of uninsured Americans grow, or seniors gouged by insurance companies, or people with serious illnesses being labeled “uninsurable.”

The public would like limits placed on how much profit an insurance company can hoard if it’s not reducing premiums and copays.

Obamacare isn’t perfect. Neither was Medicare or Social Security when those massive programs were created. But they didn’t have to be killed to improve them, and neither does the ACA. Anyone who says it does is playing politics with people’s lives.

(An earlier version of this post incorrectly referred to Independence Blue Cross.)

Harold Jackson ( ) is editorial page manager for Philadelphia Media Network.