How medical insurance works
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The US “Health Insurance” Industry is Trying to Destroy America… Friday, December 9th, 2005 The US Health Insurance Industry is vying with “Big Pharma” for the title of America’s “Public Enemy Number One.” For a while, I believed that “Big Pharma,” alone, in their murderous greed, was responsible for the problems of “health care” on Planet Earth. And, frankly, in most parts of the world – I’d say that’s still true. But, not in the USA… Here, the Health Insurance Industry is giving “Big Pharma” a run for it’s money – and a LOT of money that is. I’ve been watching the health insurance industry for years. It’s common knowledge that health insurance companies go out of their way to deny payment for medical services. That’s a given. It has become obvious that the industry is corrupt. So much so that there is a whole counter-industry in place just to deal with them – attorneys who specialize in suing them, billing services, expert witnesses, etc. Even special government agencies to monitor them. But, frankly, nothing is working to remove the corruption. And, I’m about to tell you why that is… It’s all about the money. Huge amounts of money. Distributed long before claims are paid out. Ninety-one percent (91%) of the cost of “health insurance” goes nowhere near paying for health care. and American Industry, by law, is required to buy into this system, if they have over 200 employees. No wonder US industry is “outsourcing” labor to Guatemala, Costa Rica, Thailand, etc. They are trying, themselves, to survive. Why Health Insurance Companies Don’t Pay Claims… Since I became a consultant to the Plaintiff in the “Cavitat v. Aetna” Federal lawsuit I’ve had the opportunity to take an even harder look at how health insurance companies operate – and I’m appalled. Frankly, by the time the money paid into health insurance company funds is divided up there is little left to pay claims – only, by my estimate, less than ten percent (10%) of the total premiums paid to the industry. What? Less than ten percent (10%)? Yup. How could that be? Easy. I’ve made you an example. It works like this: (1) A health insurance policy is sold to a company, lets call them “Acme Widgets.” Since Acme Widgets has over 200 employees in the US they are REQUIRED by Federal law to provide insurance for their employees. Lets say, for purposes of discussion, that Acme Widgets has a thousand employees (1000). The policy will cost Acme Widgets $14,700 per year, per employee – for a total of $14,700,000 per year before they even pay wages and salaries. (2) The insurance agent that sold them the policy gets forty percent (40%) of the total sale as his commission – for a total of $5,880,000 – leaving now, only $8,820,000 for claims. Yup – 40%. (3) Then a ten percent (10%) profit to stockholders is deducted – $1,470,000 – leaving now only $7,350,000 for claims. (4) Then the employees that “administer” the plan at the health insurance company take their cut – thirty five (35%) percent – $5,145,000 – leaving now only $2,205,000 to pay claims. (5) Then there are additional administrative costs deducted – like campaign contributions, payments to contractors, etc. – six percent (6%) – $882,000 – leaving now only $1,323,000 to pay claims – nine percent (9%) of the total premiums paid. Nine percent? Hardly what Americans think they are getting. If you work this out on a per-employee basis, out of the $14,700 per employee fee for insurance, only $1,323 is available per employee for health care each year. Talk about “rip-off.” One visit to an Emergency Room on a Saturday with a cut on your kid’s arm from falling off their bicycle will catch you a bill for $5,000. Never mind when your wife finds a lump in her breast… or your heart starts to act funny. Yup. Ninety-one percent (91%) of the cost of “health insurance” goes nowhere near paying for health care. And American Industry, by law, is required to buy into this system, paying whatever the health insurance industry wants, if they have over 200 employees. No wonder US industry is “outsourcing” labor to Guatemala, Costa Rica, Thailand, etc. They are trying, themselves, to survive. Nope – the health insurance industry isn’t worth saving. The entire State of California is in the process of solving this problem. You can read what’s happening by clicking here. Aetna Insurance company is livid that I’ve been broadcasting about the “Cavitat v. Aetna” Federal lawsuit. Their attorneys act like ADD/ADHD kids strung out on red food coloring, preservatives, and processed sugars, every time one of my pieces about “quackbusters” Baratz or Barrett, hits the internet. And they go off like an El Queda car bomb every time I mention the word “Aetna.” As you may remember – Aetna sent thugs to my neighborhood (“Is Aetna threatening my family?”), allegedly “to personally deliver a subpoena,” one that had already been delivered. Obviously trying to scare me off. Why would they do that? Because, I’m scratching too close to the itch. The “Cavitat” case is right on point, I think. The information coming out of the investigations about the relationship between the “quackbusters” and the medical insurance industry will serve the North American Health Freedom Mo Nope – the health insurance industry isn’t worth saving. Stay tuned… Tim Bolen – Consumer Advocate Copyright 2005 by Bolen Report |
