Why Californians Can’t Afford Health Insurance

California’s Consumer Watchdog group is suing Anthem Blue Cross after they raised health care insurance premiums 39 percent, but the company isn’t budging.

Meanwhile Goldman Sachs recommended buying health insurance company stock because competition is decreasing and prices are going up. The Center for Retirement Research at Boston College estimates that “the typical married couple at age 65 should expect to spend” a whopping $197,000 on uninsured medical expenses. Obama urges action on a watered-down health care bill, but the Republicans and conservative Democrats just say no and collect money from the private health care lobby. Will we continue to tolerate skyrocketing health care costs?

As a long-time Anthem Blue Cross customer, my insurance increased 400 percent since 2000. For 15 years, my wife and I jockeyed our budget to afford the increases. Neither of us have serious medical problems; we’re in good health and rarely go to the doctor.

Our last surprise came six months before we both became eligible for Medicare, when Anthem raised our premiums 30 percent. Did Anthem calculate that we would pay the increase rather than let our insurance lapse for six months before we qualified for Medicare?

Through the years, we scrambled to find an alternative insurance company, and with the last increase, we applied to other companies. After long delays, they turned us down, citing every time we had used our medical insurance in the past 20 years, which they labeled “pre-existing conditions.” The conditions included successful knee surgery 20 years ago and a medicine that was used out-of-prescription and didn’t work.

My individual story is one among thousands, but I have watched the national medical care debate unfold, and the opposition puzzles me. Many of those shown in Tea Party anti-healthcare protests are white-haired and overweight, which suggests they have health problems and Medicare. Yet, they protest against “government interference,” as if they prefer the ironclad clutches of Anthem and other for-profit, what-the-market-will-bear private health insurance companies.

Maybe some of the 800,000 California policyholders who are having their rates increased an average of 25 percent, and those who are having their rates increased up to 39 percent, will decide to back health care reform. Such rate increases are outlandish when inflation was -0.4 percent last year.

Anthem claims people are dropping their insurance, leaving people with high medical bills on their rolls, and they must increase their rates to maintain profits. Anthem’s president, Leslie Margolin, dismissed criticism by telling a California Assembly panel that anger at the hikes is “misdirected” due to the “underlying causes of our collective failure.”

The real story is different. According to Health Care for America Now, in 2008, WellPoint controlled 30 percent of the commercial market for health insurance in California. Along with Kaiser Permanente, they controlled 58 percent of the market. In some cities, such as Salinas, WellPoint controls 60 percent. No wonder WellPoint paid its top seven executives $83 million in 2008, spent $4.7 million on lobbying, and recorded record profits.

Between 2000 and 2007, premiums for families increased from $6,227 to $12,1994, almost doubling, while California’s median wages increased only 19 percent. Insurance costs increased five times faster than earnings.

California has the most competitive health care insurance market in the U.S., and there’s almost no regulation. Insurance companies are supposed to spend 70 percent of their premiums on medical care, but the state cannot verify their accounting. Other states fare worse.

In 34 of the states, two companies control 60 percent of the market and in 16 states two companies control three quarters or more of the market. Four companies control 75 percent of all health insurance sold in the U.S. They have virtual monopoly control and are exempt from anti-trust regulations, which allows them to collude on prices, standards and, and conspire together in ways that are illegal for other companies.

I’m in sympathy with those who dislike forcing people to buy insurance: It would be far better to expand coverage through taxes. Other serious problems also abound: too few doctors; no incentives to keep people healthy; terrible food products. It’s a long list.

The sooner we begin to replace what we have with a single-payer system, buttressed by widespread health education programs and cost containment, the better. Let Anthem Blue Cross go out of business. Let their experts join the public in finding a workable solution.

The U.S. is the only wealthy industrialized country where private companies ration medical care, causing over 100,000 unnecessary deaths a year and the majority of bankruptcies. We spend the largest share of national income on medical care, yet in 2000 the World Health Organization rated the U.S. health care system 37th in overall performance, 72nd in health levels, and the most expensive.

Without radical reform-and that means a government regulated and run system-we are at the mercy of the heath care insurers, who dictate our premiums and the treatment and coverage we receive. Far from being a threat, the government could play a vital role in providing an affordable health care system that protects us.

DON MONKERUD is an California-based writer who follows cultural, social and political issues. He can be reached at monkerud@cruzio.com.