No. 1: You pay for your healthcare. Insurance companies do not. 

They are middlemen who charge hefty fees for their services.

The most common U.S. health insurance source is employer-sponsored care that covers 153 million Americans.

Your employer sponsors the plan. They choose the insurance company and provide a few options, but you pay for the coverage.

Your employer pays you a benefits package that includes your salary and health insurance.

For example, if your employer can afford a $100,000 benefits package and your health insurance costs the employer $20,000, you will make an $80,000 salary.  If the employer’s insurance costs $15,000, your salary is $85,000.

You and your employer both benefit if your health insurance costs decrease. 

Even though we pay for our health insurance, we don’t get to make purchasing decisions such as:

• What are the covered services, and at what rate?      
• Which hospitals, physicians, and pharmacies are in the network, and what is their reimbursement?
• Which prescription drugs are covered, and at what price?
• Are we getting a good value on the plan, or are more affordable options available?

We must work with our employer to ensure we don’t overpay for medical services or medication. We want the money to be well spent on healthcare and used to give us a salary increase or bonus.

Patients on Medicare, Medicaid, Tricare, the VA, and those who obtain insurance from the HealthCare.gov Marketplace are led to believe that the Government is paying for all of their health needs.

In reality, WE pay for our insurance through our taxes.  It is our money, and we should demand that we get value for it.

No. 2

Don’t forget about cost sharing!

Unfortunately, that little card in your pocket from the insurance company comes with a barrier to health care.

That barrier is called cost sharing.  Cost sharing consists of the following:

• Deductible—This is the amount you must pay before the insurance company pays for services.  The deductible usually doesn’t apply to preventative services. In 2024, the deductibles on the healthcare exchange ranged from $1,430 to $7,258.  After you pay your premium and deductible, the insurance company pays for part of your health care. After the deductible is met, the co-pays and co-insurance kick in.There is often a separate deductible for prescription drugs and medical services. 
• Co-pays are fixed amounts you pay for medical services or drugs. For instance, you may be charged $50 every time you see a specialist.
• Co-insurance is a percentage of the service’s list price that you pay. For example, you may have to pay 50% of the costs of brand-name medications.
• Maximum Out-of-Pocket is the maximum you pay under a plan.  The Maximum you would have to pay in 2024 on the HealthCare Exchange Is $9,450 for an individual and $18,900 for a family.
• The maximum out-of-pocket doesn’t include the following:
• Monthly Premiums
• Uncovered Services
• Out-of-network services
• Cost exceeding the allowable physician charge

The insurance company determines the services that are uncovered, the network, and the allowed costs for services.

Therefore, the actual out-of-pocket costs can be much higher than stated. 

Cost sharing is a massive barrier to patient care, as 63% of patients don’t have $500 for a medical emergency.  Therefore, if they have a deductible of $2,000, they will now have medical debt. 

Because premiums and cost-sharing are high, 23% of patients are underinsured, or what I call Insured in name only, or INO. 

The underinsured have insurance coverage but can’t afford to use it.

A recent survey revealed that 41% of Americans have debt due to medical or dental bills. 

No. 3

Most of our revenue comes from your tax dollars.

According to the Congressional Budget Office (CBO), the federal government paid $1.8 trillion in subsidies to insurance companies in 2023.

To put this in perspective, the 2008 bank bailout was funded with $700 billion in taxpayer dollars. 

People were incensed by the bank bailout, yet we pay 2.5 times that amount to insurance companies every year, and no one even notices!

The total revenue for the U.S. government in 2023 was $4.4 trillion. 

The US government pays 40% of its revenue to private health insurance companies.

This is a list of large insurance companies, the percentage of their revenue that is derived from government programs, and the CEO salaries.

• Cigna 42%, CEO David Cordani $21,047,255
• Elevance (Anthem) 68%, CEO Gail Boudreaux $21,889,039
• United Health 72%, CEO Andrew Witty $23,534,936
• CVS/Aetna 73%, CEO Karen Lynch $21,615,034
• Molina 89%, CEO Joseph Zubretsky, $21,500,000
• Humana 91%, CEO Bruce Broussard $ 16, 327,384
• (President of the United States of America, salary $400,000)

Insurance companies derive most of their revenue from government programs and are essentially government entities.

Why are we providing huge subsidies to insurance companies that provide their customers with unaffordable premiums and cost-sharing?

Despite this massive money transfer from taxpayers to insurance companies, Americans owe $220 billion in medical debt!  This is a terrible deal!

We should subsidize people in need, not multibillion-dollar insurance companies.

 Subsidies can be made through health savings accounts (HSAs), which allow patients to shop for the best prices. 

No. 4

The focus is on profits rather than delivering affordable care.

 It is a common misperception that the price the insurance company gets is the best price for any service.

However, the cash price is often lower. The problem is that the cost doesn’t count toward your deductible if you pay cash. 

The exception to this is that Tennessee and Texas recently passed laws mandating that cash prices be applied to insurance deductibles. 

Under the Affordable Care Act, insurance companies must spend 80-85% of their revenue on patient care.

Their profit is limited to 15-20% of the total revenue they receive.  This is known as the Medical Loss Ratio or MLR.

This provides a perverse incentive for the insurance company, as increasing the total amount spent on health insurance is the only way to increase profits.

Insurance companies have bought many other businesses in the healthcare space to facilitate meeting the medical loss ratio requirements and increase profits.

An example is that Optum Health, a subsidiary of United Health, owns or is affiliated with over 90,000 physicians, which is 10 percent of all physicians in the US. 

A recent Stat News investigation reports that United Health pays its owned physician groups higher than other medical groups. 

This increases the price of medical services for consumers and increases the profit for United Health.

Another area in which the insurance price is much higher than the cash price is with prescription drugs.

The Federal Trade Commission released an interim report on Pharmacy Benefit Managers (PBMs) in July.

The PBMs are owned by the major insurance companies and act as middlemen in the market for prescription drugs.

On page 42 of this report, the following prices were listed for a generic drug used to treat leukemia called imatinib mesylate:

• Cash price at non-preferred pharmacy (Costco) $97

• Price at the preferred pharmacy (Walgreens) $9,000

• Price for home delivery (preferred method) $19,200

The insurance price is almost 200 times more than the cash price. 

We need every state to mandate that cash paid for medical services must be applied to the deductible.  This will encourage patients to shop for the best prices for medical services and prescription drugs.

Always ask for the Cash Price before obtaining the medical service!

No. 5

We own the government, and they work for us.

The government should work for the people of the land.  However, there is intense lobbying in the healthcare industry.

Determining the total amount that health insurance companies spend on lobbying is difficult, as they own many subsidiaries that also lobby. 

An example is the Pharmaceutical Care Management Association, the lobbyist for the PBMs. This group alone spent over $15 million lobbying in 2023.

At a minimum, there are tens of millions of dollars a year spent on lobbying by large health insurance companies.

There is also the problem of the revolving door, in which government regulators, congressional staff, and other government workers will take a job as a lobbyist or in a private company they use to oversee. 

The lobbying group America’s Health Insurance Plans (AHIP) advocates for health insurance companies, and 68% of its employees are former government workers. 

We need a new approach to health insurance in the US.

The U.S. spends twice as much as other comparable countries on healthcare spending with worse results. 

We can’t afford to continue shoveling trillions of dollars to companies that have no incentive to lower costs or provide quality care. 

Subsidies should go to individuals in Health Savings Accounts versus insurance companies.

We need price transparency and patient choice in healthcare costs.

I am optimistic that the new administration and the Dept. of Government Efficiency will address this problem.