The Daily Record

Insurance Industry Must Share Blame For Health Care Costs

Daily Record — Sunday, November 22, 2009

By PHYLLIS SALOWE KAYE and DUDLEY BURDGE

In his Nov. 15 column, "Insurers not to blame for health care costs," William Marino, president and CEO of Horizon Blue Cross Blue Shield of New Jersey, asserts that effective health care reform must bring down rising health care costs. Marino also says health insurance companies are not responsible for high health care costs.

Marino is right about the need to curb rapidly growing health care costs, which consume 17 percent of our nation's gross domestic product, but he fails to accept responsibility for the key role of health insurers in failing to control those costs.

As the head of the dominant New Jersey health insurer, he is responsible for negotiating health care prices charged by health care providers for millions of New Jerseyans.

Marino has utterly failed to control health care costs. Instead of acknowledging this failure, Marino and other insurance executives oppose a major aspect of reform that would actually bring down health care costs (and possibly threaten health insurer profits) — the public health insurance option.

The public insurance option — as outlined in HR 3962, The Affordable Health Care for America Act, which recently passed the House — would bring down health costs by inserting real competition into the marketplace and forcing insurance companies to compete on a level playing field with a low-cost, high-quality public insurance plan.

The best example of a public option today is Medicare, which provides quality, affordable health insurance to millions of Americans. Medicare runs on only 3 percent cost overhead with the rest spent on providing health care.

Comparatively, the private insurance industry spends between 15 percent and 30 percent of the money it takes in on profits and overhead including advertising, profits and executive compensation (such as Marino's $4,983,254 in total 2007 compensation).

If done correctly, health care reform should curb back insurance company profits and executive salaries while making health care more affordable for consumers.

Here are just a few additional provisions of the House bill that would turn the tide back in favor of the American consumer:

While health care reform may very well impede the insurance company gravy train, we cannot let this stand in the way of making health care more affordable for the American people.

The House has taken a major step in passing health care reform that works for us, not the insurance industry. Now we need the Senate to follow suit so we can send a strong bill to the president's desk this year.

Phyllis Salowe Kaye is executive director of New Jersey Citizen Action. Dudley Burdge is health care spokeswoman for Communication Workers of America in New Jersey.

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