The New Gender Paradigm

Paying claims will always result in higher premiums.

However, the most expensive insurance is the one that doesn't pay claims.  

       ...In other words, you pay, but there are no benefits.  In healthcare, you discover there are no benefits only when it's too late:  You have lot's of hospital bills, but you're "uninsurable".

​​Healthcare Reform

The 2010 Affordable Care Act tried to put a stop to this kind of insurance fraud.  Insurance companies would be required to pay claims even after group members become ill.  No more exclusions for "pre-existing illness" or non-covered procedures.  Insurance executives have protested that  paying claims would force them to raise premiums to cover the additional cost.  --That may indeed be necessary.  But the government should see a corresponding decrease in emergency room charges for the uninsured.

On the other hand, insurance companies have raised premiums for bloated overhead, but put the blame on "Obamacare".  (See below) 

Another  point of controversy has been whether people could keep their old policies -- the ones with low premiums but lots of exclusions.  Those old policies are precisely what the Act was designed to eliminate!  Allowing people to retain them is a time bomb, set to go off when the payer tries to make a claim.  They'll realize how worthless the policy actually is. 

The Facts about

Health Insurance

​​The current debate over "Obamacare" affects has an overwhelming impact on the transgender community.  First, because a transsexual's survival depends on access to adequate medical care.  The legislation is supposed to eliminate the old "transsexual exclusion" clauses, along with the "pre-existing condition" excuse.   Most transgender people face staggering poverty and unemployment -- another obstacle to healthcare access.

The Affordable Care Act has never been fully implemented.   In fact, the 2012 Supreme Court Ruling (NIFIB v Seleblius) specifically allowed states to opt out.   The 2014 Hobby Lobby Ruling opened the door to health care discrimination for religious reasons.  And the new Republican congressional majorities hope to turn back the clock by repealing the law altogether.

Most objections to the Act result from a misunderstanding of the fundamental concepts behind insurance: 

What Insurance Is

In theory, insurance  is a method of sharing risk.  Healthcare can be prohibitively expensive -- for example, emergency hospitalization and surgery can end up costing tens of thousands of dollars.  Most people don't have that much money readily available, so they form a group with a common pool of money.  Every year each group member must contribute a certain amount of money (the "premium").  If someone becomes ill, the funds in the pool can be used to pay for that person's medical care.

In any given year, most people in the group remain healthy.  They contribute into the fund, but get nothing back.  Are they wasting their money?  Did they bet their premium and lose?   

On the other hand, anyone suffering a major illness during the year may take out far more than they put in.  Did they "win" the insurance game?  (if being hospitalized can be called winning.)  

The key to understanding insurance is the fact that everyone is at risk.  Everyone gets sick at some point in their life.  Even if a person seems healthy today, tomorrow they may discover a chronic illness that could end up costing millions in the long-term.  No one can be certain they won't be in an emergency room in two hours -- no matter how healthy their lifestyle, regardless of how many medical exams or tests they've had.   

Over a lifetime, everyone is destined to pay a mountain of money for healthcare.  From the long-term perspective, insurance is merely a way to spread out the payments to make them more manageable.   

Insurance Fraud

During the 1960's, insurance companies realized that they could make a lot of money by not paying claims.  Group members still paid their yearly insurance premiums, but once anyone became sick, they lost their coverage.  In other words, they contributed a lot of money into the pool for decades, only to be abandoned when it was their turn to receive help.  

Insurance companies justified their abandonment by explaining that they were "reducing risk".  They were "rewarding" low risk people with lower premiums.  They were "saving" money for the group by eliminating everyone at "high risk".  They portrayed health insurance as a contest between the healthy and the ill.  ...If the ill are excluded, then there'll be more money for the healthy.  It's not fair:  healthy people shouldn't have to pay the expenses of the sick.

Anyone unlucky enough to become sick was left either without healthcare or bankrupt.  Or maybe the government could be left holding the bill.   ...Ultimately to be paid by taxpayers.

 ...Of course, non-coverage of illness defeated the whole purpose of healthcare insurance.  Since most members remained healthy, they were only too happy to ignore the plight of the The "losers" might even resent the "winners", because "healthy people had to pay the expenses of someone who got sick."

​​​​Health Insurance in Action:  Wellpoint

WellPoint Inc is the largest health insurer in America (based on number enrolled).  It’s a conglomerate of Blue Cross/Blue Shield plans in 14 states plus other subsidiaries.  Angela Braly is the WellPoint CEO; she’s one of 15 female CEO’s of Fortune 500 corporations.  In 2010, she was yet again honored as one of the top 10 female executives in the country by the National Association for Female Executives (NAFE).

During 2009, WellPoint enjoyed a $2.5 billion profit in spite of a $300 million reduction in revenues and a 1.1 million drop in enrollment (primarily due to recession-triggered lay-offs).  The customer loss was offset by imposing 20-25% rate hikes in California and eleven other states.  In addition, the company laid off 1500 employees (in January of 2010) — 3.5% of its work force.  Employee health care benefits were cut back across the board.

"Like many employers in today's economic environment, we are looking at all aspects of our business, [including benefits], and making adjustments to ensure we can continue to operate competitively in the future."

            -- Oct 2009 e-mail to employees from Chief Human Resources Officer Randy Brown.  

The business strategy paid off, while  stock prices soared by 39% over the course of the year.

That same year, CEO Angela Braly’s compensation increased by 51%, from $8.7 million to $13.1 million annually.  

2009 was also the year of President Obama’s National Health Care Reform, which was finally signed into law on 23 March 2010.  In the Senate, the original health care bill was written by former WellPoint Vice-President Liz Fowler, who left her position specifically for that purpose.  (WellPoint certainly had a vested interest in the debate:  the company was posed to win big if private insurance were mandated and subsidized by tax dollars, while it would be devastated by a low-cost government-run insurance alternative.)  

(After passage, Ms Fowler was appointed to the US Department of Health & Human Affairs to direct implementation of the Health Care Law.)


WellPoint also asked employees to support the non-government approach:

"Regrettably, the congressional legislation, as currently passed by four of the five key committees in Congress, does not meet our definition of responsible and sustainable reform.  [The bill  would hurt the company by] causing tens of millions of Americans to lose their private coverage and end up in a government-run plan."

          -- Sept 2009 e-mail to all employees, Anthem California / WellPoint

But that's not all:  Susan Bayh, wife of Indiana Senator Evan Bayh (D), was on Wellpoint's board of directors.  Her compensation from WellPoint included various stock benefits that would skyrocket under a private insurance mandate.  In October 2009, Senator Bayh threatened to join 5 other senate democrats in a filibuster against the health care bill if it offered an alternative to private insurance.  The threat was successful in imposing the necessary changes. 

Wellpoint CEO Braly was fired in 2013 because investors thought they weren't getting enough return.  Her "golden parachute" amounted to $31.7 million.   She was replaced by Joseph R Swedish at a yearly salary of over $22 million.  (Her predecessor Larry Glasscock got $50 million a year.  But that was in the pre-Obamacare era.)

"A young, healthy 25-year-old living in Columbus Ohio can purchase insurance from WellPoint today for about $52 per month in the individual [pre-Obamacare] market.  WellPoint's actuaries calculate the bill will rise to $79 because Democrats are going to require it to issue policies to anyone who applies, even if they've waited until they're sick to buy insurance. Then they'll also require the company to charge everyone nearly the same rate, bringing the premium to $134.  Add in an extra $17, since Democrats will require higher benefit levels, and a share of the new health industry taxes ($6), and monthly premiums have risen to $157, a 199% boost."
          -- The Wellpoint Revelation, The Wall Street Journal, 28 October 2009

"A top WellPoint Inc executive said on Friday during an investor conference that he expects double digit rate increases in premiums for 2015 public exchange plans."

          -- Reuters, 21 March 2014

"WellPoint predicted Wednesday that the Indianapolis-based company’s operating revenue will soar nearly 27 percent over the next three years, to a whopping $90 billion, up from about $71 billion this year."

​          -- Indianapolis Business Journal, 24 July 2013