Health Insurance Is A Different Business

United Healthcare let their contract lapse with HealthOne because they wanted to “keep premiums affordable”.

“We still feel as strongly as ever that if we accepted a rate increase they are asking for, that would be directly opposed to our objective of making health insurance affordable in metro Denver.”

Even a single-digit increase “will price quite a few people out of health insurance altogether.”

With over 800,000 people insured by United Healthcare in Colorado, this decision has created a big stir.  But looking at the mess that resulted, was this decision really about keeping health insurance affordable, or was it about keeping their stockholders happy?  Is it a benefit to those insured by United Healthcare to have 8 major hospitals removed from their network options?

I’ve been asking some of our clients these questions over the last week and the general consensus is that there wouldn’t be a noticeable difference in their premiums whether United Healthcare had renewed the contract with HealthOne or not.  There are too many variables involved in this mess for anyone to criticize the decision with much accuracy.  But I appreciate the apparent effort of United Healthcare to try to keep premiums down.

Health insurance companies need to have a different business philosophy than other types of businesses.  In other countries, there aren’t government funded programs to provide cars, electronics, or other popular goods and services to the public.  However, many other countries do have government funded healthcare and there is a large push in this country to do the same.  This post isn’t about which one is better; it’s just meant to point out that healthcare is a different product than other things we spend our money on.

Dr. Alan Synn, president of the Denver Medical Society, replied to a good column by Rob Reuteman in the Rocky Mountain News titled “Health care squabble like UAW vs. GM of old” by saying:

Of course, powerful business entities have in the past reached a contractual impasse. The United Auto Workers and GM strikes may be a good example. But what is at stake is vastly different. In the automobile industry, the eventual casualty of such a stalemate is a more expensive car price. In the delivery of health care, the burden is felt by the patient in the form of less access, prolonged pain, human worry and the insidious progression of an ailment (to name a few). That is why all members of the health care community (health insurance companies and hospitals included) must care more about their corporate stewardship than automobile makers and other typical consumer businesses.

About Jay Norris

Jay operates a health insurance brokerage in Colorado, where he helps individuals and small groups obtain and maintain health insurance coverage.
Complimenting his work as a health insurance broker, Jay also provides data analysis and creates visualizations that are easily understood by consumers and other stakeholders in Colorado’s health insurance market.

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