“In 2022, the CEOs of the seven major publicly traded health insurance and services conglomerates — CVS Health, UnitedHealth Group, Cigna, Elevance Health, Centene, Humana, and Molina Healthcare — combined to make more than $335 million, according to a STAT analysis of annual financial disclosures. That was 18% more than the record from 2021. High-flying stock prices again fueled a vast majority of the gains.”

-Bob Herman, writing for STAT

Our nation’s healthcare system is failing. While the 27 million uninsured Americans have long been a cause for concern, now Americans with health insurance are increasingly putting off important medical treatments they can’t afford. A majority of insured adults (58%) say they have experienced a problem using their health insurance in the past 12 months – such as denied claims, provider network problems, and pre-authorization problems. (And that number grows to two-thirds of adults experiencing problems with insurance when looking only at those with “fair” or “poor” health.)

What are HDHPs? HSAs?

Healthcare costs have continued to balloon year-over-year, growing from only 5% of our total GDP in 1969 to 18% of GDP in 2021, and those costs are increasingly being passed on to patients via high-deductible health insurance plans (HDHPs). These are plans where patients pay lower monthly premium payments in exchange for higher out-of-pocket expenses at the time of care. Employers are increasingly offering these plans due to their lower premiums, which in turn means that employers cover less of the cost of their employees’ plans since costs are shifted to payment at the time of care.

These high-deductible health plans are typically paired with health savings accounts (HSAs). These accounts are tax-exempt and are intended to be used as a way for patients to save for their high deductibles ahead of time. However, studies have shown that more than half of those with health savings accounts can’t afford to put any money into it in a typical year. Meanwhile, those who do contribute to these accounts tend to max out their annual contributions due to the way wealthier account holders can turn these HSAs into a second retirement account, akin to a 401(k). (While there are discrete limits on how much you can contribute to HSAs each year, the funds never expire, can be invested in stocks and bonds and are allowed to be used for any reason, not just medical expenses, once a person turns 65.)

Studies have shown that mixing HDHPs with HSAs results in unequal health outcomes. Poor people who have shown to avoid preventative care and office visits precisely because they can’t afford to pay high deductibles. One study found that poor people on HDHPs even avoid the ER in high-severity situations due to cost. Meanwhile, wealthy people who aim to game the HSA system sign up for these plans and muddy the data on health outcomes since they treat these plans as investment opportunities, not health insurance.

I expect this from Republicans, but Democrats too?

Republicans are searching for a new ideological approach to healthcare after their failed ‘War on Obamacare’ and they’ve coalesced around promoting HDHPs and HSAs. At its core their push benefits wealthy individuals and corporations since it creates more tax advantages for wealthy individuals while reducing employers’ bills for employee health insurance premiums. But why are some Democrats joining them in this push…?

Democratic Rep. Earl Blumenauer, Portland’s patron saint of cannabis, is co-sponsoring a bill alongside Ohio Republican Rep. Brad Wenstrup that would bolster policies of these HDHP and HSA plans. Democrats like Blumenauer have signed on in support of the expansion of these plans because they seek to incorporate language covering more medical conditions and procedures before deductibles are paid, including things like chronic care and telehealth services. The problem is that these Democrats naively believe that insurers will cover these new services without any type of enforcement, despite the fact that multiple insurers have been caught systematically denying claims that should be approved.

Health Insurers Reap Record Profits By Denying Claims

Numerous investigative journalists have uncovered scandal after scandal where health insurers refuse to cover services and procedures that their own plans explicitly state that they should cover. An easy example: ProPublica investigated Cigna, one of the nation’s largest health insurers, and found that the company was bulk-denying insurance claims without even reading them. UnitedHealthcare was found denying claims simply due to their high costs while knowing from their own data that the chances a patient would appeal their denial was near-0.

Americans don’t need more healthcare plan options, we need stronger consumer protections for the policies we already have. If Democrats want to reform health insurance in a way that will demonstrably help the middle class, they should strengthen regulatory bodies that hold insurance companies accountable. An easy example: patients shouldn’t be responsible for correcting ‘mistakes’ made on medical bills, especially when that mistake conveniently means insurance companies hold onto money that they should be paying out for claims. We also need more regulation on emerging technologies: insurers shouldn’t be able to use AI, in lieu of a licensed doctor, to determine if a treatment is “medically necessary.”

Circling back to the survey quoted at the start of this post: of those who experienced problems with their health insurance, nearly half were unable to resolve them. That means millions of patients have paid out-of-pocket at times when insurers should have picked up the bill. While most of us are fed up with our nation’s healthcare system altogether, we can’t transform it overnight. But we can introduce new consumer protections to ensure that our current system works to improve health outcomes for all Americans rather than serving the profit motives of insurers.