Firstly, I am updating this article thanks to Mr. Ken Terry of BNET another person studying and writing on this issue please read his fantastic article on this subject as did I. Mr. Terry in summing up the reform offers by the industry in health care says,
“The proposals of the industry groups, some of which are already being considered by Congress, would cut costs by improving quality, reducing overutilization, lowering administrative costs, and promoting better health. While a few good ideas are lurking here, most of it is self-serving pap trotted out to head off the prospect of meaningful healthcare reform.”
I certainly agree with his assessment and must cite my own studies which have the 4 year health care costs for the same exact person rising 48% in 4 years. I can bring evidence to this supposition as well in the form of health insurance rate sheets that I have amassed from various health insurance companies. I believe the Florida health insurance premiums to obviously be a very good indicator of what is going on in the health care field. What I can’t figure out is why the rates are rising so much for the same frozen in time caveman. I know that the competition between the eight legitimate Florida individual carriers especially in South Florida is more then fierce it can be intimidating as a broker.
We are for instance a Blue Cross Blue Shield Agency in the sense that we are licensed to sell them in addition to the other seven carriers mentioned throughout this website. Blue Cross instead of reducing their administrative costs sees fit to audit my health insurance firm and make sure that if they call my office that whomever answers offers Blue Cross until the person on the other end of the phone hangs up in a rage. Anything less and they have cause for termination. I bring up this example, because they have such a dominant market position that they virtually create the market and rule the competition. It actually doesn’t even matter if you respond to a Cigna advertisement on this site as we are only instructed to sell Blue Cross. What is even more alarming is that we are not allowed to advertise their products as only they are allowed to advertise their products and thus we must do advertising for other companies instead. Hence, the number one Florida individual health insurance company is fixing the field, and dismissing agents by the handful that don’t comply.
This is a uniquely Florida problem as no other Blue Cross Company would every do this or could even do this as Blue Cross of Florida enjoys a shall we say preferred tax status similar to what the rich would call loopholes. In any case as they make the market, this means that they dictate pricing. But even so if this is the case you would have expected the other Florida companies to not raise their rates and lower their margins to knock Blue Cross out of the business but they haven’t been able to. In fact, the only company really close to Blue Cross like Cigna or Avmed has less up front benefits. Mr. Terry is correct obviously and we all are complicit to a degree in the rising health care costs but really who is responsible for this 48% number I keep referring to?
So whats your point?
My point actually is that the Florida health insurance markets have had the same margins over the last four years and their profits have not even increased! This means that the blame should it fall anywhere can go to #1 the hospital CEO’s who are always crying about compensation and begging for donation and Big Pharma. Because I just can’t believe that my neighborhood PCP who is all but vanishing is creating that loud sucking noise from your wallet to the health insurance companies. Yes I agree with Mr. Terry and his reader that our consumers are obese and that they are similarly unhealthy and even addicted to narcotics in Florida from the many thousands of pain clinics. But this problem is also not Pharma issue. I can say that because I can tell you that once this recession started my grandparents and nearly everyone that was taking name brand switched to Wal Mart and their $4 generics. So except in certain situations the health insurance companies weren’t raising their premiums to offset big Pharma. No it is still just the hospitals in this equation. And until we can get answers I am watching them very closely.
