Health Care For America Now

The insurance industry is pushing their latest lie, claiming that only 1 cent of every dollar spent on health care goes to profits:

Insurers have responded to the administration’s campaign against recent rate hikes by blaming increasing health care costs, provider cost increases and adverse selection (healthier Americans are dropping coverage) for their premium increases. To hear them tell it, the insurance industry is a low-profit industry that spends just one cent of every premium dollar on administration and strives to reduce costs by encouraging efficiencies. Insurers “do not deserve to be vilified for political purposes,” Robert Zirkelbach, a spokesman for America’s Health Insurance Plans (AHIP) told the AP:

For every dollar spent on health care in America, less than one penny goes toward health plan profits. The focus needs to be on the other 99 cents.

Never mind that even if it were true that one penny adds up to $25 billion per year - a quarter of the cost of health reform over 10 years. But the claim is highly misleading:

Zirkelbach is clever enough to compare the private insurance industry’s administrative spending to national health care expenditures — 45 percent of which includes spending in Medicare, Medicaid and other public programs. In the context of total spending, insurers administrative costs may look small, but compared to the revenues of private insurers, administrative spending is seen as far more substantial. Insurers skim off 15-20 percent of premium dollars for administrative costs and profits which fund TV ad campaigns, Washington lobbyists, lavish company retreats and outlandish CEO salaries.

Recent reports by Health Care for America Now bear out this analysis. Today, the insurance industry is making record profits, and it's increasing its rates twice as fast than the underlying cost of medical care. There's no other interpretation to be had - insurers are squeezing more money from their customers while dropping their most expensive patients.

Another reason the insurance industry's excuse that their profits shouldn't be the "focus" doesn't hold water? They just launched ad campaigns spending over $1 million per day to try and kill health care reform to protect their profits - profits which are apparently so small as to be unworthy of scrutiny.

While the insurance industry is only spending about $1 million of our premium dollars on ads themselves, their front group, the US Chamber of Commerce, through which they've funneled tens of millions in the past and are funneling more now, is planning on spending a million a day:

A coalition of organizations led by the U.S. Chamber of Commerce plans to spend as much as $1 million a day on advertisements designed to pressure lawmakers to vote "no" on health-care legislation.

The campaign will last about 10 days and cost between $4 million and $10 million, said Bruce Josten, the Chamber's top lobbyist. The ad will start on cable television and then run in 17 states served by moderate and conservative Democrats, he said.

Though these two ad programs are being reported as separate pushes, they're not. The insurance industry is behind the Chamber ads, meaning they are spending over $1 million of your premium dollars every day to protect their profits. They're protecting themselves from things like regulation that would force them to spend 85% of their premium dollars on care, exchanges to promote actual competition between companies as opposed to the Wall Street-certified lack of competition that exists now, and a public option, all of which would put a cramp in their current style of money-making.

And this spending is on top of the millions per day they're already spending on lobbyists.

(The ads themselves, especially the Chamber ones, are highly misleading as well.)

It's outrageous that the insurance industry can claim on the one hand that their profits aren't the problem, then turn around and spend astronomical sums on ads to protect those very same apparently unimportant profits. And all the while they're raising rates for you and me by 30%, 40%, or over 50% in a dozen states.

Secretary Sebelius took that point to the insurance industry's conference - protested by thousands yesterday - in a speech to them today:

You can choose to take the millions of dollars you have stored away for your next round of ads to kill meaningful reform, and use them to start giving Americans some relief from their skyrocketing premiums. Instead of spending your energy attacking the parts of the President's proposal you don't like, you can use it to strengthen the parts you do.

The industry can't have it both ways. They can't raise their rates twice as fast as the price of underlying care and then claim they're not gouging their customers. And they can't spend over a million a day on ads to protect their profits and then claim their profits are small or unworthy of attention and outrage.

Every minute, 8 people are denied care for profit by the private insurance companies. We need health reform that puts these companies in their place and gives quality, affordable health care for the American people. That's what the thousands in the streets were fighting for yesterday. (The photo above is an aerial shot of the end of the action yesterday.) That's what the dozens of insurance industry survivors are asking Congress for today. And if we fight for it, that's what we'll get.