DAVID GRANOVSKY

Bill Moyers Journal: Health Care Reform + Wendell Potter

In ALL ARTICLES on September 23, 2009 at 11:33 pm

Bill Moyer’s take on the health care reform: With almost 20 years inside the health insurance industry, Wendell Potter saw for-profit insurers hijack our health care system and put profits before patients. Now, he speaks with Bill Moyers about how those companies are standing in the way of health care reform.

Health Care Reform

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  1. I respect Mr. Potter’s giving us his thoughts that I’m sure are well intended. What I have a problem with is that everyone that has listened to him seems to assume he’s accurately describing the entire insurance industry with emphasis on the health care segment. Let’s keep in mind that, even though he may have had some expanded experiences through industry wide activities that he took part in, it is his work for and within his employer, CIGNA, which had the greatest influence on him. His former company, as is AIG, is large stock company and, to be frank, neither has been well thought of even within the industry.

    The insurance industry, including its health care segment, is made up of many more company’s some of the largest of which are mutual companies owned by their policyholders where the issue of “profit” is not the driving factor. In his talks, he has stated that he has nothing against companies making a profit but then gives us statistics that make one wonder whether he really understands insurance accounting.

    He’s made a big point over the fact that the “medical loss ratio” of the industry used to be about 95% and is now in the 80s and that this represents the amount of the insurance premiums earned that is paid out in claims. If any insurance company paid out ninety-five cents of every premium dollar in claims they would be at the verge of bankruptcy. The remaining 5% would be nowhere near enough to cover their overhead. Granted, insurance companies benefit from other “profits” such as interest earnings on the investments supporting the reserves included in their surplus, but even with those factored in, it’s been a good year for an insurance company of any type that has had a profit of more than 3 to 5 % in a year. Compare that to other industries and you’ll find that insurance is near the bottom of the profit earners.

    He is correct that misusing that profit, as little as it is, for obscene executive salaries and lavish corporate living deserves criticism. There again, however, this is not the general fare for the bulk of the industry. I’m surprised that the media appears to have taken Mr. Potter’s observations as gospel without challenge thereby permitting him to paint an entire industry with a brush of few hairs. Reinhold R Klein, Wausau, WI

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