The Social Medicine Portal

Aetna “redesigns” plans to raise profits, predicting a loss of over 600,000 members

Posted by Sophia Constantino and Claudia Chaufan

As Congress debates health care reform, corporate insurance companies will continue to consider ways to raise their profits.

Specifically, Aetna, the third largest U.S. health insurer that covers over 15 million people, plans to raise their membership fees in 2010.  The company estimates it will lose between 600,000 and 650,000 members following its implementation of what Aetna’s President Mark Bertolinia calls “pricing actions and plan design changes, intended to ensure that each customer is priced to an appropriate margin.” In plain English, this means that Aetna will raise prices for people it deems too costly to insure, making it impossible for them to afford their previous plans.

Clearly, anybody who thought that it is in the “nature” of Aetna or of for profit insurance generally to ensure health care is affordable for all Americans was distracted.  Because Aetna, like all  for profit companies, is a business. And our health care system is designed so that businesses will find it profitable to sell health care policies — which implies seeking always greater profits, reducing losses, and making shareholders happy — and not to eliminate the financial burdens of disease. (Which is why, as noted by UCSF professor Dr. Claudia Chaufan, no other country in the developed word has left it to for profit insurance to pay for the medically necessary expenses of over 70% of the population).

The greatest problem with this “uniquely American” health care arrangement, that both the Obama Administration and the U.S. Congress continue to endorse, is that it has led to a notion of “health care reform ” that is “unique” (and frightening) indeed: in the quest for “universal coverage”, both the Senate and the House bill will mandate that the readers of (and contributors to) this blog buy into this market. Put another way, they will make it a federal crime not to buy a policy, even if my “plan design” or “appropriate margin” is based solely on increasing shareholder profits.

And while insurers promise to not deny coverage based on pre-existing conditions, it does not follow that they can’t charge whatever they please to make sure that they aren’t losing profit on someone who actually might be sick.  For a comparison of the House and Senate bills click here.

Don McCanne, senior policy analyst at Physicians for a National Health Program, asks us, “Try to imagine Medicare dumping over 600,000 patients because they need more medical care.”

Of course, this could never happen, but it allows us to ask ourselves:  is the proposed “Insurance Exchange”  based on solid grounds?

And this is critical, because those who lose their policies from Aetna’s or other insurers’ pricing practices will be forced into the “exchange”. There, we are told, they will have the choice of several for profit plans and a public option, or nonprofit insurance cooperatives, that supposedly will count on government loans to get started. This means that those who are sick and low-income (or increasingly, middle income) will be “shopping” for insurance in the exchange, and those with money and healthy will continue to buy private insurance.  But wasn’t this the problem we were trying to change?

A health care marketplace driven by profit makes it very hard for “bad customers”, those who are sick and more likely to need health care, to get good deals.  Therefore, you need taxpayer subsidized public programs to take care of “bad customers”, i.e., those insurers cannot make money on.

This is the why publicly funded programs such as Medicare and Medicaid, are increasingly financially strained, because they must meet the needs of “unprofitable” customers, and do so at taxpayers expense (a variant of the “uniquely American” way of bailing out corporations while dumping Main Street).

Why not have Medicare for everyone? This way, insurance premiums would be based on how much each of us can pay, and not on shareholders ability to profit on your plan. And we would have a system designed to do what most Americans need it for: eliminate the financial burden of disease.

This is precisely what the amendment to the Senate Bill introduced by Sen. Bernie Sanders of Vermont is proposing: this amendment would delete the bulk of that bill’s language and replace it by the wording of a single-payer, Medicare for All bill. Under Senate rules, Sanders amendment will go straight to the floor for debate.

So there’s some homework for all of us this week: call your senators and ask them to support Sander’s Medicare for All amendment, # 2837 (U.S. Senate 202-224-3121). Call them not once but many times. Our lives and deaths, quite literally, depend on whether or not we insist on being heard.