The Rape of Medical Care by American Insurance Companies

The claim here previously has been American medical insurance companies take 50% of every dollar paid to them and keep it.  The figure of 50% is the value we had read previously but there is no truth without citations so we reviewed the matter again.  That review showed 50% was a little bit high but not by much.  The actual value is 35% to 45% of every dollar spent by every American in medical insurance premiums goes to overhead.  (New York Times:  What Portion of Premiums Should Insurers Pay Out in Benefits?)

The article in the New York Times was written by Uwe E. Reinhardt, an expert on economics and one who has been on the faculty of Princeton for forty-five years.  Here is an excerpt from the New York Times summary of his biography:

Uwe E. Reinhardt is the James Madison Professor of Political Economy at Princeton University, where he has taught since 1970. He is a leading health policy expert who has advised various state and international bodies, including the World Bank, the Physician Payment Review Commission, the Veterans Administration and the United States Department of Health and Human Services. He writes for Economix about health care, finance, taxes and other issues.

Reinhardt's credentials are from a high level university and from multiple high level corporations.  His qualifications to write on the subject, as you see from the summary, are clear.

Note:  the article was written in 2009 and profits on medical insurance corporations have shot up substantially since this time.  It was a problem then and it is worse now.  Here's a reference to skyrocketing profits in American medical insurance companies which was written in 2011 and this problem has since worsened as well.  (Huffington Post: Soaring Health Insurance Profits Fuel Push To Limit Rate Hikes)

The massive overhead of American insurance companies is not a statement of hyperbole given 35% - 45% skimmed off the top of the most highly-paid medical system in the world.  It's not true America fails to spend enough on medical care and the specific problem is how much is wasted / lost due to the egregious greed of the medical insurance corporations, some of the most powerful lobbying interests in the country.

If you doubt how much the medical insurance companies are bleeding the country, how do you suppose they can spend billions for lobbying in support of their interests.  Just where in the world do you suppose they got that money.  If you answered from the cash machine in your pocket, you are precisely correct.

This is the problem the Affordable Care Act has failed to address and cannot possibly address.  Hillary Clinton has said emphatically she plans to continue and further institutionalize the program.  The GOP doesn't have a better answer but rather they will take the ACA down and move even more strongly toward solidifying the position of the medical insurance corporations which have taken so much already.  There is no logical chance of improvement from either camp.

When Bernie Sanders said the United States spends three times as much on medicine compared to other countries, it was true.  This can be verified at Politifact: Fact-checking Sanders' claim that U.S. spends 3 times per capita what the U.K. spends on health care.

While three times the amount has seriously rounded the numbers, the statement is generally true that American health care costs far more per capita than anywhere else.  While conservatives routinely disparage socialism, the American medical health care system does significantly worse and costs substantially more.

As you can see from the overhead already charged by American medical insurance companies and the substantial difference in costs between American health care and that of other nations, it's clear the most expensive possible proposal is anything which further consolidates the death grip the medical insurance companies hold on the people of America.  It's not equal, it's not fair, and it works to the major detriment of care in the United States which specifically does not provide the best health care in the world.  America has the capability for it but it does not deliver and that is the specific fault of the American medical insurance corporations.