A word to the wise: During this coronavirus crisis, keep an eye on every move of my old industry: health insurers. Behind the PR spin, they’ll be doing everything they can to deny care and maintain profits while making it look like they’re heroes.
Don’t be fooled by the industry’s campaign to make us think they’re good corporate citizens truly interested in your health and well-being. Take it from me, a former insider: what they truly care about are profits.
That couldn’t have been more evident than the speed with which the industry’s trade group, America’s Health Insurance Plans (AHIP), corrected President Trump last week when he said that insurers “have agreed to waive all copayments for coronavirus treatments.”
You can be sure Trump’s comment sent shockwaves through the industry. Within hours, AHIP, the industry’s largest PR and lobbying group, released a statement making clear that was not the case, that all they would waive would be cost-sharing for testing.
Yes, just testing; not treatment. For many, treatment will be considerably more expensive than testing. If insurers let their health plan members off the hook for out-of-pocket expenses related to treatment, their shareholders and Wall Street financial analysts would be apoplectic.
Case in point: My old company Cigna says it will cover the cost of COVID-19 testing — but makes no mention of waiving copays or deductibles for “treatment.” Check out their carefully crafted wording here. This isn’t a mistake. Cigna and other health insurers stand to make money from testing, or at least break even, even after waiving coronavirus test co-pays for patients. That’s because the federal government appears poised to cover all testing costs, which suggests a significant reimbursement of testing costs is coming for health insurers.
Here’s more carefully crafted industry language: UnitedHealthcare says, “your health is important to [them]” and their top “priority.” But if you actually get this coronavirus, good luck with out of pocket costs.
One of the most-watched metrics for health insurance companies is called the “medical loss ratio.” The more insurers pay for care, the higher the ratio is. (It’s called the medical loss ratio because insurers consider it a loss when they pay a claim.) As part of Obamacare, insurers have to spend at least 80-85% of premiums on health care. So most try to keep the ratio right at those levels. If it creeps up significantly, shareholders run for the exits. Why? When insurers pay more in claims, that’s less more for insurer profits.
Remember: For-profit insurers are in the business to make a profit. Period. And they do better when you don’t need them or remember they exist. But when a crisis like this erupts, they get scared. Why? Because folks like you will see what these insurance companies really do and don’t cover.
As a former insurance exec, let me tell you: The strategy of moving Americans into high deductible plans has paid off beautifully for shareholders and top executives. But it’s forcing millions of Americans to forego care, to turn to GoFundMe or bankruptcy court due to awful bills.
This pandemic will finally reveal to so many of us how devastating insurers’ greed can be. Tragically, some Americans will likely die because policymakers turned the keys of our healthcare system over to profit-driven insurance corporations.
That has to finally end.