I was looking at the Blue Cross Blue Shield of MN 2008 Financial statement.  Their total revenue was $8.8 billion and paid out claims were $8 billion putting their administrative percentage a tad under 10%. In many ways, thats pretty impressive. Membership is roughly $2.2 million, putting a rough cost per member at $4000/year, which again, is pretty impressive.

However…. dollar figures dont tell the whole story.

  • If someone has a pre-existing condition, it likely wont be covered.
  • If someone was seriously injured, and doesnt recover, they will hit yearly, and likely lifetime limits of coverage, where upon their coverage becomes of little value, if its renewed at all.
  • If someone is old, and with some heatlh issues, they will pay many times, what a young healthy person pays, if they are offered coverage at all.
  • Maximum annual out of pocket spending is based upon only covered procedures, and only what they consider reasonable and customary. A significant illness or injury will likely result in annual out of pocket spending far beyond what is stated.
  • It is highly likely, one will have to fight every step of the way for coverage in the event of major illness or injury, significantly less so for more routine matters. One’s doctor is really not the one in charge of care, when many options have to be reviewed/denied/appealed.

All of the above serve to keep premiums low, and also lean towards keeping a specific membership demographic that keeps premiums low as well. Removing / modifying many of the above would be the morally correct thing to do, and changes are called out in the reform bill… however, such is going to require premiums to increase multifold. Where is the greed aspect? Is it us, who dont want to pay, or is it them, in wanting to keep prices down to maintain volume and thus profitability?

I have a feeling its more us, than them. No one ever thinks they will get sick or be injured, few even bother to read their policy, until they really need it, and then find out… they need to have fund raisers and such to help with their childrens health issues, or that bankruptcy may be a high probability, although for chronic cases… what then, it doesnt change financial circumstances, the high costs are still there. Or what about the anti-government person, who believes a great deal in affordable private insurance… only to find out, they exhaust it, or its cancelled and end up on medicare/medicaid programs anyhow.