W.J. Astore

Private health insurers make money denying care–not providing it

Luigi Mangione, the young man who shot and killed a senior health insurance executive, is emerging as a folk hero of sorts in America. This requires some explanation for people outside of America.

Most peer countries to the United States have national health care systems. Countries like Britain, Germany, France, Japan, New Zealand, and the like. These national health care systems, run by the government, are not perfect, but overall they are cheaper and produce better results for patients than the American system, where health care is basically wealth care for the rich and privileged.

America primarily has a privatized health care system where profit is the prime directive. (Programs like Medicare* and Medicaid are a public-private partnership and are government-funded; the former focuses on people 65 and older, the latter on the poorest of Americans.) Most Americans get their private health insurance with their job, else they’re required to buy private health insurance on their own nickel. These health insurance plans are expensive and often come with high deductibles and co-pays.

So, for example, when you visit a doctor for a routine appointment, your co-pay is likely between $50 and $100 per visit. If you get seriously sick, break a bone, etc., your health insurance provider may not start paying your bills until a certain yearly deductible is met, which may sit between $5000 and $10,000. Not surprisingly with these deductibles, co-pays, and the like, Americans often declare bankruptcy due to medical bills even when they have health insurance and are in theory “covered.”

A quick Google search reveals that an unsubsidized private health care plan for a family of four in America cost an average of $24,000 a year in 2023. Other figures suggest a cost of roughly $18,000 a year, but it depends on what state you live in as well as your age. The various plans that you can buy are quite complicated and include the aforementioned deductibles, co-pays, and other complexities. Employer-based plans cost less; perhaps in the neighborhood of $6000 to $8000 per year.

Again, health insurers’ #1 priority isn’t to provide health care. It’s to make money for shareholders—and for the senior executives in the industry. So their profit-driven approach to claims is the now infamous “deny, delay, depose (or defend)” strategy. As often as possible, they seek to deny claims outright, forcing sick and desperate people to fight an incomprehensible bureaucracy shrouded in fine-print legalese. Or they seek to delay payment on claims. Or they take Americans to court (“defend and depose”), forcing people to hire lawyers (quite expensive) while aiming for the quickest and cheapest settlement.

For the insurers, this strategy makes all the sense in the world. They are in this business to maximize profits and earnings, not to provide generous health care benefits.

Efforts to create a fairer and more just system for Americans have failed due to political corruption at the highest levels as well as propaganda (remember those rumored “death panels” if the government ran health care). The idea of a national non-profit healthcare system is nothing new; the Truman administration advocated for it after World War II, and various other proposals were floated by LBJ in the 1960s, the Clintons in the 1990s, and even tepidly by the ultimate sellout Barack Obama with his Affordable Care Act, which is unaffordable for many and less than generous with its care. These and similar efforts have failed as Big Pharma, the AMA, health insurers, and other forces have combined to exert tremendous pressure so as to prevent meaningful reforms that would cut into their profits, salaries, and market share.

Basically, the U.S. health wealth care system costs roughly double that of comparable countries with worse outcomes for patients. Again, this isn’t a surprising result, since the health and well-being of patients isn’t the guiding priority. It never has been. The U.S. system is all about producing the highest possible salaries and profits for Big Pharma, for health insurers, for privileged doctors (specialists often make yearly salaries in the high six-figures), and for all the other stakeholders (and shareholders) in the current system.

Here in America, the Hippocratic oath of “first do no harm” in medicine doesn’t apply. Our oath is the Gordon Gekko one of “Greed is good.” It doesn’t matter if people go bankrupt or die as a result. It’s wealth care, not health care, silly!

It’s unlikely the Trump administration will do anything to change this. Its top priority seems to be the expulsion of immigrants. Members of Congress are completely in the pocket of Big Pharma, the health insurers, and powerful medical lobbies, so don’t look for meaningful change there.

That’s why so many Americans, deeply frustrated with an exploitative system of healthwealth care, where costs rise year by year as benefits shrink, sympathize with Luigi Mangione, even if they disagree with his murderous method of expressing his anger and disgust.

Put bleakly, America’s health wealth care system is another way of enriching the few while impoverishing the rest. It is also a form of social control. (Act out, protest—lose your job, your health care, maybe your life.) Only the most revolutionary acts are likely to change this system. That is exactly why the government, the mainstream media, and corporate elites are acting to suppress sympathy for Mangione.

Consider this article by Ken Klippenstein about a mom who, frustrated with her health insurer, repeated “deny-delay-depose” while saying “you people are next” on the phone; she quickly apologized, but not before the police and FBI were called in and charged her with threatening “an act of terrorism.”

Know your place, Americans. Stay supine and obedient or they’ll take away your health insurance. Better yet, they’ll finally give you affordable health care—in prison.

*More on Medicare, courtesy of the Center for Medicare Advocacy

Most people think Medicare is a government program. That’s only partly true. While Congress created Medicare, and continues to develop Medicare coverage and appeal rules, decisions to pay claims are actually made by private companies. The government does not make those decisions. This was one of the compromises made in order to pass Medicare in 1965 – and the public-private partnership continues to date.

Indeed, the entities granting or denying coverage, and those deciding whether or not to pay claims, are mostly private insurance companies. For example, Anthem is the parent company of “National Government Services,” one of the major Medicare claims administrators. Another Medicare administrative contractor, “MAXIMUS,” is a for-profit company that helps state, federal and foreign governments administer programs.

In addition, about 30% of Medicare beneficiaries are enrolled in private “Medicare Advantage” plans. These plans are also run by private companies, mostly within the insurance industry, and they make Medicare initial coverage decisions for their enrollees.

We know that when Medicare is working right and covering necessary care, everyone is content. But, if coverage is denied unfairly… don’t blame the government. It’s probably not “Medicare” that made the decision; it’s most likely a private insurance company that’s paid by Medicare to make coverage decisions.

Thanks to a reader, Sally Moore, for pointing out the public-private nature of Medicare. It’s more complicated than I thought—I should have known better.

Update: A classic cartoon from Tom Tomorrow seems appropriate here: