Editor's Note: This article continues our multi-part series excerpted from the "Healthcare Hostage Crisis" chapter of AC360° contributor David Gewirtz's upcoming book, How To Save Jobs, which will be available in October. To learn more about the book, follow David on Twitter at http://www.twitter.com/DavidGewirtz. Last week, we looked at the steps insurance companies take to avoid paying your medical bills. This week, we'll look at the problem with health insurance, overall - and what it means if you're an employee with health insurance and you're suddenly out of a job.
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David Gewirtz | BIO
Editor-in-Chief, ZATZ Publishing
Clearly, the insurance system is a failure for vast numbers of Americans. That's why it's particularly disturbing that the Senate's new health care bill appears to be putting even more faith in the insurance companies.
Using the insurance industry's own numbers, about 13 percent of every medical dollar goes into the insurance industry, rather than the medical industry. So, of the $2.4 trillion dollars we overspend annually on health care, at least $312 billion feeds the insurance industry.
Here we have the insurance industry, sucking 13 percent off our already excessive costs for health care, and, according to The New York Times, making profits above $60 billion in 2006. Based on the American Journal of Medicine numbers, medically-related bankruptcies account for an annual loss to American citizens of about $6.3 billion.
Lose the job, lose the insurance. Lose the insurance and, suddenly, you're a statistic.
The industry makes $60 billion in profits, but is willing to bankrupt hundreds of thousands of Americans over an amount that's a mere 10 percent of its already astronomical profits.
To be fair, the fault isn't just with the insurance industry. Every industry has a right to make profits. Likewise, we, as consumers, have the right to choose to purchase from a business - or not. If we like the quality, service and value, we buy more and the company succeeds. If we don't like the quality, service, and value, we shop less and the business doesn't succeed.
Except the health insurance business. Here, we have very little choice.
The insurance industry has set itself up between those of us who are consumers and those providing medical care. In fact, there are so many layers and filters and barriers between the consumer and the product that it's virtually impossible to comparison shop for anything in the health care business.
According to the Kaiser Foundation:
Employer-sponsored insurance is the leading source of health insurance, covering about 158 million non-elderly people in America.
That means that about half of all people in America get their health insurance through their employers. Of course, as more and more people lose their jobs, more and more people are also losing their health insurance. According to researchers James Kvaal and Ben Furnas of the Center for American Progress, approximately 14,000 people are losing health insurance each day.
Our system of employer-provided health insurance is one of the big reasons for the health care-related bankruptcies discussed earlier. More than 37 percent of those suffering a medical-related bankruptcy were forced to quit their jobs or were fired due to their illness. According to The American Journal of Medicine study, more than half of American companies cancel coverage within a year of when an "employee suffers a disabling illness," and a quarter do so almost immediately.
So they get sick, which means they can't do their jobs - but it's the insurance provided through their jobs that's supposed to help them when they're sick. Lose the job, lose the insurance. Lose the insurance and, suddenly, you're a statistic.
Our insurance premiums went up an average of 119 percent in the last decade. But we're definitely not seeing more value. In fact, The American Journal of Medicine study also tells us:
Since 2001, the proportion of all bankruptcies attributable to medical problems has increased by 50%.
So our costs for the insurance that's supposed to protect us from bankruptcies more than doubled - and medically-related bankruptcies also went up, by a whopping 50 percent.
And that leads us to the topic of the day: health care reform. That's next and it'll wrap up our series.
But just in case you're starting to feel good about the American health care system, think about who we're putting in charge of reforming health care. That's right, it's the politicians. I'm not exactly sure why that worries me so much...
Follow David on Twitter at http://www.Twitter.com/DavidGewirtz.
Editor’s note: David Gewirtz is Editor-in-Chief, ZATZ Magazines, including OutlookPower Magazine. He is a leading Presidential scholar specializing in White House email. He is a member of FBI InfraGard, the Cyberterrorism Advisor for the International Association for Counterterrorism & Security Professionals, a columnist for The Journal of Counterterrorism and Homeland Security, and has been a guest commentator for the Nieman Watchdog of the Nieman Foundation for Journalism at Harvard University. He is a faculty member at the University of California, Berkeley extension, a recipient of the Sigma Xi Research Award in Engineering and was a candidate for the 2008 Pulitzer Prize in Letters.
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