Thomas A. Bass: The Double Game of the U.S. Health Insurance Companies

In the novels of doctor-turned-writer Robin Cook, health-insurance companies are so predatory that they not only charge outsized fees but kill you. They engineer contagious epidemics to eliminate expensive customers. Profit is their sole motive, which Cook considers an outrageous betrayal of his medical oath. "I am not optimistic about the unfortunate marriage of medicine and business," he wrote on his website in 2011. "In fact, I see it getting much worse..."

Few of us believe that our health-insurance company is trying to kill us, but many share Cook's opinion that the system is perverted. Hiking premiums by 9 percent a year, U.S. health insurers just finished banking their third year of record-breaking profits. The Affordable Care Act, when it launches in 2014 (if the U.S. Supreme Court doesn't declare it unconstitutional), will force another 16 million people to buy private health insurance. While proclaiming their opposition to the ACA, the insurance companies are actually playing a double game, positioning themselves to profit handsomely, no matter which way the Court rules.

The insurance lobby began playing this game in 2009, when the ACA was being debated in Congress. While the insurance companies sat at the table, helping to draft the legislation, they secretly funneled $86.2 million to the U.S. Chamber of Commerce, which strenuously opposed health-care reform. The Chamber used this money, equaling 40 percent of its yearly budget, to "advance a market-based health-care system." In practice, what they managed to do was strip from the ACA a "public option," which would have allowed the government to compete with the corporations in offering medical insurance. Without this option, there was no way to see which system worked better.

If you google your health-insurance company, along with news about stock prices and return on investment, outsized executive pay, and skyrocketing premiums, you will find stories about corporate fraud, stock manipulation, price fixing, and other illegal activities. My own company, UnitedHealthCare, is rich in chicanery, which helps explain why they are also rich in profits, making $4.6 billion last year.

Market fundamentalists talk about health-insurance companies "wringing inefficiencies" out of the system. Actually, they wring profits out of their customers by layering corporate bureaucrats on top of medical providers. This makes U.S. health care the most expensive and, in many categories, among the poorest performing in the industrialized world. Three million health-care workers labor in "office and administrative support," and 31 percent of U.S. health-care expenditures go to producing paperwork. These corporate bureaucrats maximize profits by low-balling reimbursements and denying claims (at rates as high as 40 percent). In other words, the companies' interest in making money is diametrically opposed to my interest in staying healthy.

The Affordable Care Act, particularly the mandate requiring U.S. citizens to buy health insurance from private companies, may be in legal limbo, awaiting a Supreme Court ruling, but the insurance companies are planning to profit from this ruling, no matter which way it goes. While lobbing for the ACA to be declared unconstitutional, thereby leaving millions of people uninsured, the companies are also planning to profit from the flood of additional customers, enrolled at inflated premiums. Either way the decision comes down, the stock price of your health-insurance company will likely go up.