Who Is the Patient: Insurance Industry or Real People?

The long-awaited ruling by the US Supreme Court (SCOTUS) supporting subsidies/tax credits for the Affordable Care Act (ACA) has been hailed by the mainstream media (even including MSNBC) as a landmark event showing the success of health care reform. Granted, the ACA after five years has brought new coverage to 16 million people through the exchanges and expanded Medicaid, and has established some limited insurance reforms, such as banning insurers from denying coverage based on pre-existing conditions. But as the media celebrate and hype this event, we need to ask some hard questions about where we now find ourselves in reforming our dysfunctional system.

First, as to numbers, there were 50 million uninsured Americans in 2010, when the ACA was enacted; that number today is still 35 million. (1) Tens of millions more are underinsured, and we will never achieve universal coverage under the ACA. Even with insurance, one in three Americans cannot afford necessary health care, with many foregoing care and being forced into debt or bankruptcy. The ACA does not address underlying causes of medical debt, including high cost-sharing in many plans, little or no coverage for out-of-network care, and limits on essential health benefits. (2) Despite the original intent of the ACA to provide new insurance protections, insurers can still discriminate against the sick through inadequate provider networks, high deductibles, restrictive drug formularies, deceptive marketing practices, and other means. (3)

Uncontrolled inflation of health care costs continues unimpeded as insurers, hospitals, drug companies, and others in the medical-industrial complex embrace expanded and subsidized new markets with minimal oversight. This problem is growing worse as insurers and hospitals consolidate, gain near-monopoly market shares, and raise their prices to what the traffic will bear. Meanwhile, the bureaucracy and cost of the ACA’s infrastructure continues to grow.

This SCOTUS decision is yet another bailout of a dying private health insurance industry that would be gone without federal subsidies – from us, the taxpayers. In describing the rationale for the Court’s ruling, Chief Justice John Roberts said: “Congress passed the Act to improve health insurance markets, not to destroy them.” America’s Health Insurance Plans (AHIP), the industry’s trade group, had previously filed an amicus brief with the court in King v. Burwell that described a calamitous outcome for the industry unless subsidies were continued. (4)

This makes me ask: who was the patient that SCOTUS was trying to help – the insurance industry or everyday American real patients? This latest ruling props up a dying industry for another period of time. Despite the ACA’s successes to date, we are still left with uncontrolled inflation of health care costs that are unaffordable for much of the shrinking middle class, continued erosion of employer-sponsored insurance (ESI) as many employers shift employees to the exchanges or defined benefit plans, and increasing cost-shifting to patients.

We need to recognize the failures of the insurance industry even as they receive their second bailout from SCOTUS. These examples illustrate how inadequate the industry is in handling health care financing in this country:

• Almost one-half of physician networks for plans sold on the exchanges include less than 25 percent of physicians in their region; patients receiving out-of-network care are subject to high costs without coverage. (5)

• There are inadequate price controls in the ACA, thereby giving insurers, hospitals, pharmaceutical companies, and other corporate stakeholders in the medical-industrial complex expanded subsidized markets with minimal oversight.

• More than 20 states rejected Medicaid expansion under the ACA leaving about 8 million people uninsured; as a result of their foregoing necessary care, it is estimated that the number of deaths in opt-out states will range between 7,115 and 17,104. (6)

• There are still about 18 million Americans who are eligible for coverage under the ACA but have not purchased coverage, in many cases because of its high costs. (7)

• According to the Centers for Medicare and Medicaid Services (CMS), the expanding bureaucracy under the ACA will take up one quarter of federal spending and add almost $274 billion in new administrative costs heading into 2022. (8)

We can expect this next stage of the ongoing debate over health care reform to be heated as both political parties adapt their messages to this latest development in the 2016 election cycle. But we need to keep in mind who the patient is as the debate goes forward – it should be real patients, not the self-interest of giant corporate stakeholders in our medical-industrial complex.

SCOTUS has bailed out the private insurance market once again, as it previously did in 2012. The government continues to subsidize a bloated and failing market. We can expect to see increasing premiums and less value of coverage in the next few years as insurers maximize profits over service. What will we do about the next dire call by the health insurance industry about the death spiral? We have already tolerated too many years of its false arguments for its central role in health care financing. We can no longer afford its inefficiencies, profiteering, and disingenuous statements of its necessity. It is time to move on to real health care reform, with single-payer, not-for-profit financing of the US health-care system.


1. Radofsky, L. Meet the health-law holdouts. Wall Street Journal, June 25, 2015.
2. Pollitz, K, Cox, c, Lucia, K et al. Medical debt among people with health insurance. Kaiser Family Foundation, January 2014.
3. Patient advocacy groups. Letter to Sylvia Burwell, Secretary of Health and Human Services, July 28, 2014.
4. Potter, W. Insurers’ arguments key to Supreme Court decision. Commentary: upholding Obamacare only way to avoid ‘death spiral’. Center for Public Integrity, June 25, 2015.
6. Dickman, S, Himmelstein, DU, McCormick, D et al. Opting out of Medicaid expansion: The health and financial impacts. Health Affairs Blog, January 30, 2014.
8. Himmelstein, DU. Woolhandler, S. The post-launch problem: the Affordable Care Act’s persistently high administrative costs. Health Affairs Blog, May 27, 2015.