Private health insurance companies are not really in the “health care” business — they actually operate more like investment banks, who profit from investing your premiums all while trying to pay as little as possible on as few claims claims as possible.
Enter Highmark, headquartered in Pittsburgh, Pennsylvania. Highmark is now suing the Federal Government (i.e. taxpayers).
Highmark Inc. is suing the federal government over about $220 million it claims it is owed under ObamaCare.
The insurer filed a lawsuit Tuesday arguing the Obama administration has yet to pay up the money that is intended to help insurers make up for losses under the law.
What’s Highmark’s beef? Well, the Affordable Care Act legislation included a “risk-corridor program” intended to reimburse health insurers who took on a disproportionate number of expensive sick people in the early days of the ACA. Unfortunately, if you’re a big and greedy health insurer, the program ran out of money, mainly because Republicans decided to tamper with it, and so some insurers are only getting a fraction of what they would otherwise receive from Mr. and Mrs. Taxpayer.
Insurers were given only 12.6 percent of the money they claimed in 2014 because losses had been deeper than expected across the marketplace.
That decision came partly because of Republicans in Congress, who inserted a policy rider into a 1,603-page spending bill passed at the end of 2014.
Under the provision, which is still in effect, the Department of Health and Human Services can no longer tap other accounts, such as its overall appropriations or its Medicare funding, to fund the risk corridors program.
Now, the private health insurer here is entitled to sue. But, I am also entitled to point out just how ridiculous it is that this is happening.
When you “do social policy”— in this case, universal health care — as a massive kludge, instead of a simple and elegant universal program (i.e. single-payer, Medicare-for-all), you get these kinds of outrageous situations: a private highly-profitable health insurance company suing taxpayers for what’s really the cost of doing business.
So, what’s going to happen? Well, now, other health insurers will also probably start suing the Federal Government. Lots of (relatively) high-paid government lawyers will have to waste time negotiating a settlement with the insurers. The insurers will, at the same time, spend lots of money (i.e. your premium dollars) on (even more) expensive private lawyers, in an attempt to extort as much money out of taxpayers as possible.
Who wins? Lawyers and health insurance company executives and investors.
Who loses? Taxpayers, sick people, policyholders.
If want to avoid wasting money on lawyers and shuffling money back and forth from taxpayers to private companies, you have to avoid the privatization of basic public goods and services, like health care finance and delivery. The only way to do that is, say it with me, a single-payer health care system.