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Health Care Rationing and Death Derivatives

We need a Public Health Care Plan. Available to all, Covers everything. Full Stop.
The folks who want to scream Socialism only need to read this sentence, “Public Schooling gave you the ability to read this.” Available to all, covers everybody.
That private for profit Insurance Companies are offering to take anyone regardless of condition is bullshit. Let me count the ways they will slide. Claim Denials, Rescission, Cost. There has never been an insurance scheme that has resulted in lower costs. No Fault Insurance states are the poster child of this. Every time private insurance companies get to sell policies under mandates, the price goes up.

Health Care Rationing
According to the California Nurses Association/National Nurses Organizing Committee
California’s Real Death Panels: Insurers Deny 21% of Claims PacifiCare’s Denials 40%, Cigna’s 33% in First Half of 2009

Death Derivatives
The NYT has a story on the latest wrinkle on investing.

Wall Street Pursues Profit in Bundles of Life Insurance
“After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.”

“The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.”

“The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.”

This is the next credit-default swap, and or collateralized debt obligation, backed by your illness. You know how well those worked out.

Rescission Math

Rescission is the retroactive cancellation of individual health insurance policies.  This is used by the health insurance industry to keep their medical loss ratio low and avoid paying for expensive or chronic health problems. Which is what you bought insurance for, but who knew.

Unconscionable Math is a posting at Taunter Media that shows your chances of being cancelled if you get sick or need expensive care is a whole lot higher than the health insurance industry is telling you. Highly Recommended.

Medical Loss Ratio

Health Insurance has always been presented as a method of sharing risk across large groups so that when catastrophe strikes you are covered. The theory is that premiums create a large pool of money that is used to cover you in the case of need. Conversely your premium is used to help someone else. This of course breaks down as soon as somebody can find a way to get folks who might actually need to use their policy denied benefits. The insurance industry uses rescission, purging, and the latest game, the Medical Loss Ratio.

Medical Loss Ratio is a term that has nothing to do with providing health care, but everything to do with profitability of for profit insurance companies.

Here is a quote from Wendell Potter, who until recently was the Chief PR guy at Cigna, during an interview with Bill Moyer.

WENDELL POTTER: Well, there’s a measure of profitability that investors look to, and it’s called a medical loss ratio. And it’s unique to the health insurance industry. And by medical loss ratio, I mean that it’s a measure that tells investors or anyone else how much of a premium dollar is used by the insurance company to actually pay medical claims. And that has been shrinking, over the years, since the industry’s been dominated by, or become dominated by for-profit insurance companies. Back in the early ’90s, or back during the time that the Clinton plan was being debated, 95 cents out of every dollar was sent, you know, on average was used by the insurance companies to pay claims. Last year, it was down to just slightly above 80 percent.

Here is the Interview Video.
Here is the transcript.

After watching this, you may have a different view on health insurance.

Rescission, Health Insurance and Universal Health Care

From Legal Explanations.com comes a definition of Rescission

Rescission(n) Rescission is the mutual agreement between the partied to an agreement or contract, deciding to nullify, cancel or otherwise terminate the agreement entered among them and restore the position prior to that agreement
Source Legal Explanations.com

Most folks have never heard rescission in their daily lives, but it impacts them more than they know. Consider the three day grace period on a lot of major purchases. Consider 30 day money back guarantees. Both of these are examples of rescission, which protect you against high pressure sales, bad faith, crappy products, and not having to pay for something that just is not going to work for you. This is the right of rescission, which was made into the law of the land in the Consumer Credit Protection Act of 1968. The Health Insurance Industry however looks at it as a 2 YEAR get out of coverage/payment card.

More Bad Faith

The LA Times reports that Health Net, one of the largest Health insurers in California has been found to have breached their contract and displayed bad faith to the tune of $9 Million bucks.
Health Net ordered to pay $9 million after canceling cancer patient’s policy
The Money Shot

“At the arbitration hearing, internal company documents were disclosed showing that Health Net had paid employee bonuses for meeting a cancellation quota and for the amount of money saved.”
“It’s difficult to imagine a policy more reprehensible than tying bonuses to encourage the rescission of health insurance that keeps the public well and alive,” the judge wrote.

Link to .pdf of the Bates Arbitration Decision

That Health Care Insurance is considered an Industry like making ground beef or cars should cause danger music to play in your ears.

The Politics of Health Care
The current Democratic Presidential Candidates both agree we need health care. Both of them however are blinded by the belief that the Insurance Industry is the One True Way.
Hillary Clinton says that Health Insurance needs to be Mandatory. This is an ass backwards idea of universal health care. The idea is that with everybody covered, the cost of care and insurance will go down, and we will all live happily ever after, or at least through the next re-election cycle.

Barack Obama is offering National Insurance which sounds good, but is still predicated on the Health Care Insurance Industry managing it.

The funniest or most tragic point of both plans is that they are modeling their plans on the coverage that members of Congress get. Which are outstanding plans, that we are paying for already.

Both of these candidates are living under the delusion that the Health Care Industry is actually concerned about health care, and that economies of scale will bring us to the promised land of a country of Shiny Happy Healthy People.

Why Neither of these Plans will Work
Let me set the stage for you with a couple of little know facts.
The Insurance Industry is Exempt from Antitrust. Antitrust is where companies in the same industry compare notes, pricing, and other information. In every other business in the US this is Illegal. But the insurance industry has massive databases of information, including pricing, coverage and information on anybody who has ever paid a single premium for insurance of any type.
They own MIB which warehouses this information.
In reality this is the first stop in denying coverage and or canceling your coverage.

Pricing Information. The Health Care Industry has another database used to determine payments to not only plan providers, but also everybody who may provide health care.

Yet Health Care Insurance neither insures very well, create cost savings, or is affordable.