If you ask the Democratic candidates for president who is to blame for Americans’ health-care predicament, they swiftly jab their fingers at health-insurance companies. Sure, pharmaceutical companies have received some mention (mostly negative) in the Democratic debates, but so far, insurance companies have been painted as greedy money-grubbers that just don’t want Americans to have health care.
Tonight, Senator Kamala Harris blamed insurance companies for Americans going bankrupt. “Insurance companies have been jacking up the prices for far too long,” she said. “American families have [been] held down by deductibles and co-pays and premiums that can cause them bankruptcy.”
Last night, Senator Elizabeth Warren said, “The basic profit model of an insurance company is taking as much money as you can in premiums and pay out as little as possible in health-care coverage.”
In last month’s debate, Mayor Bill De Blasio said, “Private insurance is not working for tens of millions of Americans when you talk about the co-pays, the deductibles, the premiums, the out-of-pocket expenses.” Senator Kirsten Gillibrand blamed “the greed of the insurance companies and the drug companies,” and Senator Bernie Sanders proclaimed, “The function of the health-care system today is to make billions in profits for the insurance companies.”
Joe Biden has even threatened to jail insurance executives—twice, at this point.
It’s true that high-deductible plans are one reason people get high medical bills in the first place. And it’s also fair to say that insurers don’t always negotiate for the lowest prices they can, and that they make healthy profits.
But in fact, the types of medical bills that lead to medical bankruptcy most commonly stem from out-of-network emergency-room visits and planned surgeries, not co-pays and premiums, experts told me earlier this year. Insurance companies do have networks, and services that are out of network are billed a higher rate. But doctors and hospitals decide whether to participate in certain insurers’ networks, and whether to bill patients for the balance of their bills (and, later, whether to sue patients for that balance).
The sentiment behind the anti-insurance talk is understandable. The most frustrating part of many Americans’ interactions with the health-care system is trying to get their insurance claims paid. No one enjoys hearing that something isn’t covered or will cost more than anticipated, and insurers are often the bearers of that news. And certainly, insurers also have money-saving tricks up their sleeves.
But the profits of health insurers are not that exorbitant compared with other parts of the health-care system. And in fact, many scholars suggest that American health care is so dysfunctional because it simply costs too much. That’s the fault of doctors, drugmakers, and hospitals, too, not just insurers.
Why are Democrats so focused on insurers, rather than providers and hospitals? Perhaps it’s because America’s Health Insurance Plans, the health insurers’ trade group, is not as big of a lobbying spender as the American Hospital Association. In a less cynical interpretation, doctors and hospitals at least appear to do stuff in exchange for their fees, while health insurers can more easily be written off as pure middlemen. Or maybe it’s just because so many Democrats are pushing Medicare for All, which would effectively eliminate insurance companies. It’s easier to do away with something you’ve already painted as a useless money-grubber.
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