Health Care For America Now

Why do private, for-profit, Wall Street-run health insurance companies deny your care? Why do they drop your coverage if you get sick? Why do they raise your rates and limit your doctor-recommended treatments?

So they can make money.

One measure of how much money these private plans make is their "medical loss ratio," the amount of money they spend paying for the health care of their customers vs. the amount of money they pocket as profit. Obviously, if they pocket more money and spend less on care, they make larger profits and their Wall Street investors approve.

Since the insurance companies defeated health care reform last time around in 1993, their medical loss ratio has plummeted. As our premiums have skyrocketed, and we face more denials and rejections, the amount of your premiums private insurance companies spend on your care has dropped almost 15 points, from 95% to 81%. Compare that to Medicare [pdf], which has always spent almost 98% of the money it takes in on care:

This is just one of the many problems with private insurance. The relentless drive for profits and a lower medical loss ratio makes private insurers deny more care and find any way they can to spend less money on you and give more to their Wall Street investors.

This chart points to one of the advantages of a public health insurance option: More of the money you pay to it in premiums will go towards your care, seeing as the public option, like Medicare, won't need to lower its medical loss ratio to make a profit for Wall Street, not to mention increasing competition and improving everyone's care.