Editor’s note: This commentary is by Walter Carpenter, of Montpelier, who works in Vermont’s tourist business and is a writer and health care activist.
After the Green Mountain Care Board awarded Blue Cross Blue Shield and MVP rate increases of 12.4% and 10.1% respectively, board Chair Kevin Mullin said, “We acknowledge they are not affordable. But at the same time we can’t put a company out of business.”
Why not? Perhaps we should ask ourselves a broader question. Do we really need these insurance companies to do what we could easily do ourselves if we possessed the moral courage and the political will to do it?
As the former vice president of corporate communications at Cigna, Wendell Potter, who is now an advocate for universal care, said of the health insurance industry: “Health insurers have been successful at two things: Making money and getting the American public to believe they’re essential.” They are absolutely not essential. We have proven that beyond a doubt with our own Medicare and Medicaid. That the U.S. (or at least its federal and state governments) still believes this is testimony to their success at it and a massive stain on our nation and what’s left of our democracy.
Health insurance companies consume a vast amount of our health care resources. Unlike in nations with a universal type system, which is every other democratic nation except us, so much of these resources do not go to health care, but are siphoned off into stratospheric CEO salaries, administrative expenses, marketing, hefty profits (for profit companies), building up reserves, and so on that do not benefit anyone’s health at all. About a decade ago, for example, one member of the Vermont BCBS top brass was sent out into retirement with a $7.25 million golden parachute.
Many of us who paid for this through our premiums, copays, deductibles, our taxes, and so on will have to work into our 70s, 80s, and 90s as our employment offers no golden parachutes or even pensions. Yet the system forces us to pay for these luxuries of BCBS and MVP’s higher officers. Many Vermonters who prop up these two companies with their dollars are not even insured with them. Every Vermonter pays for these two companies in one way or another.
As BCBS is also classified as a nonprofit, we also subsidize many of their taxes. This is despite how they take millions from us each month in payroll deductions, premiums, and so on.
According to an article in Seven Days, “Blue Cross Blue Shield Collects Millions from Vermonters Each Month. It’s also a Nonprofit,” BCBS is exempt from most taxes. As one of their representatives said in that article, “In Vermont, we’re treated as a nonprofit and are exempt from most taxes.” Who makes up for these taxes that they are exempted from? We also finance the corps of lobbyists they maintain at the Statehouse to preserve their interests.
For our investment in subsidizing them, we get usurious premiums and high deductibles. High deductibles are simply the insurer passing the costs onto us to prevent us from using the insurance and cutting into their bottom lines. We get thousands of uninsured or underinsured Vermonters. We get things like eligibility rules, prior authorizations, claim denials, narrow networks, and formularies constantly churning around. We get constantly raising rates. Over the last six years, BCBS alone has been awarded rate increases of 58%. This includes this year’s 12.4% jump. Last year it was 10%, if I remember right. What will it be for the next six years? While this is unknown now, it is also something to ponder with awe.
What is certain, however, is that Vermonters’ ability to subsidize these companies and their perennial rate increases cannot last much longer. So many Vermonters work for wages that are barely above the minimum. A young woman cashier at one of these box stores told me a couple weeks ago that she makes $11.20 an hour. This is 48 cents above Vermont’s current minimum wage of $10.78. On this she has to support two kids and make a monthly rent payment of $800 before utilities. She is $19 an hour short of a living wage, but she also has to subsidize the rate increases of these two companies, their numerous layers of expensive administrators and executives, and most of the taxes for BCBS.
Although the chair of the GMCB probably did not intend it with his statement about putting a company out of business, this is exactly what is needed here. These latest rate increases demonstrate why. What will the raises be next year? The year after that? My last raise was 50 cents an hour two years ago. Do we really need these insurance companies to do what we could easily do ourselves?
The answer is no.