Little Known Facts About The Health Insurance Industry

When I had the initial idea for delving the Health Insurance Industry my thoughts were not totally objective. I, like many, assumed their profits and profit margins were truly obscene. But hours of research using reputable and non-biased sources dispelled many erroneous beliefs.

Although the monetary figures are staggering, the health insurance industry does not even make it into the top 50 for the amount of profit they make. In fact, they are listed as number 86 out of the top 100 with an overall profit margin of 3.3%. This information was taken directly from Dr. Mark J. Perry, a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

Another research source, The Annenberg Public Policy Center of the University of Pennsylvania reported the following:
In 2007, national health care expenditures totaled $2.2 trillion. Health insurance profits of nearly $13 billion make up 0.6 percent of that. CEO compensation is a mere 0.005 percent of total spending.

The Government Accountability Office (GAO) reported that in 2008 half the improper payments made by the federal government came from Medicare and Medicaid. The Medicare fee-for-service program had an estimated $10.4 billion in improper payments, plus Medicare Advantage doled out $6.8 billion that it shouldn't have. Medicare's improper payments totaled $18.6 billion for the year. Those figures surpass the profits reaped by insurance companies and pay their CEOs took home.

While not a proponent of this industry, I do strive to be factual and attribute my findings. But, since this is a Blog I also have freedom to voice One Person's Views.

Aside from he financial aspects a few others come into play. Currently, the lawmakers in our nation's capital are tossing many possibilities around to reduce health care costs and bring about coverage for everyone in America.

Some say if health care insurance companies would able to cross state lines there would be greater competition thus forcing lower premiums and allowing more people to enroll in health care coverage. I have no doubt competition would indeed force changes. The one thought that keeps leaping into my mind is the not so simple fact of States Rights. Each state regulates the insurance industry in its state. The amount they charge, the fees associated and a myriad of other assorted things. Unless this system were universal it simply isn't feasible under the current way of doing business.

There are 535 members of Congress. It is difficult to have 50 of them agree on anything. Can we assume 50 governors with as many territorial interests would be any different?

One component critical to lowering the cost of health care is to provide comprehensive preventive care. To catch problems before they become major and costly. Most health care plans allow those covered to opt in for vision and dental care. Dental issues can lead to major systemic illnesses and poor vision is in a class by itself. Medicare does not address either of these.

Another factor I am compelled to raise is the interaction between doctors and patients and health insurance companies.

According to a survey from the National Library of Medicine, some individual physicians do practice different styles based on patient insurance, but the majority say they do not.

However, there seems to be one major barrier to patient care ... 58% of U.S. physicians report their patients often have difficulty paying for medications or other out-of-pocket costs. This is compared to between 5 and 37 percent in other countries. U.S. physicians are also four times as likely as their counterparts in Australia, the Netherlands, Sweden and the U.K. to report major problems with the time or their staff spend getting patients needed medication or treatment due to insurance coverage restrictions. About half (48%) of U.S. physicians say this is a major problem.

Given all the facts, it is a little easier to understand the complexity of the problem. Now, if somehow we can forge ahead and intelligently find ways to solve the problems our country will have indeed reached a historic milestone.