What Profit Is Moral For Private Health Insurance Companies?


We need health care justice, Parham writes. To get there, we need more information from private insurance companies.

Before the moral question about the profit of private health insurance companies can be answered, we need to have more financial information from them.

 

Here are some simple, straightforward and fair questions that need answers:

  • How much profit do private insurance corporations make?
  • What are the compensation and bonuses for the top insurance executives?
  • What percentage of private insurance revenue goes to real health care—paying doctors and hospitals for care?
  • What percentage of private insurance revenue goes for corporate operationsmarketing themselves to customers, for example?
  • How much revenue ends up in campaign donations, buying the services of high-paid Beltway lobbyists and funding organizations working to block health care reform?

 

Answers to these questions are critical to responsible decision making that is in the best interest of the common good. We simply must know more about private insurance companies if the nation is going to make good decisions about the balance between private and public health care in the current reform debate.

 

On CBS' "Face the Nation," Howard Dean, former governor of Vermont and former chair of the Democratic National Committee, said on Aug. 23 that 20 percent of private insurance revenue goes for expenses other than health care.

 

Dean said, "So, let's just suppose you're one of the big health care companies and at—at the very best you're going to have about an 80 percent pay-out ratio. That means that 20 percent of all the money you take in goes to some cause other than health care."

 

Where does the 20 percent of private insurance revenue go that's not spent on health care? That's a reasonable question. If it is profit, is that too much profit?

 

President Barack Obama said in a July press conference that "there had been reports just over the last couple of days of insurance companies making record profits. Right now, at the time when everybody's getting hammered, they're making record profits and premiums are going up."

 

Is it justifiable for insurance companies to make record profits and charge more for coverage? That's a fair question.

 

Some congressional leaders rightly want answers to these types of questions. They want the facts about the private insurance corporations—profits, premiums and perks for execs.

 

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Congressmen Henry Waxman (D-Calif.) and Bart Stupak (D-Mich.) wrote last week 52 insurance corporations asking for detailed information about profits and compensation, much as Waxman did to the bailed-out banks.

 

Sen. John Rockefeller (D-W.Va.) wrote the top 15 insurance providers asking what percentage of health care premiums go to patient care and to profits.

 

"Too often consumers are not getting a fair deal for what they pay, they are not getting the protections they deserve, and the insurance companies are awash in profit," said Rockefeller, according to Reuters.

 

If private insurance companies are awash in profit, then the public has the right to know that. After all, why should a few benefit at the expense of the well-being of the many? Why should some live lavish lifestyles while others languish without decent health care?

 

The public has rightly voiced outrage about the obscene bonuses for bank execs saved and bailed out with taxpayer money. The public has groaned about the bailout of the automotive industry's executives who lost tens of billions of dollars and made thousands of dollars per hour. The public has grown cynical about the unfathomable big-oil profits and high gas prices.

 

Underneath the public's negative reaction to corporate greed is a basic awareness of moral unfairness and a hunger for justice.

 

A similar sense arises from reading the parable in Luke about the rich man and Lazarus.

 

In that biblical story, a poor man—Lazarus—is covered with sores that the dogs lick. He would have been satisfied with the food scraps that fell from the rich man's table. Yet the rich man is indifferent to the needs of an impoverished, diseased man in plain sight.

 

Retold today, that story might include an additional note that Republicans, Blue-Dog Democrats and conservative Christian leaders defend the rich man's way of life and warn that government intervention in the health care delivery system would only make things worse for the disease-ridden, emaciated Lazarus.

 

We need health care justice. To get there, we need more information from private insurance companies—how much profit do they make, what percentage of revenue really goes to health care, etc.

 

If your congressman and senators aren't pressing for answers to these questions, they are siding with the rich man against Lazarus.

 

Robert Parham is executive editor of EthicsDaily.com and executive director of its parent organization, the Baptist Center for Ethics.

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