High-deductible health plans were never going to solve high healthcare costs

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Sixteen years ago, I was answering the phone for a member services line at Anthem Blue Cross and Blue Shield. One day, my manager asked me to answer a different phone number. Instead of the PPO plans I had worked with, this phone number dealt with their new high-deductible health plans.

After a brief training session on how these plans worked, I was off and running.

The people who called me on this new line often had plans with deductibles of $5,000 per person or even higher, accompanied by health savings accounts: a tax-advantaged vehicle that allowed them to pay for the full cost of their expenses before they met their deductible. That is, before their insurance paid a penny for their claims.

It didn’t take long for me to see why their employers put them on these plans. It wasn’t to empower them, as promised. It was simply for their employers to save premium costs and transfer the risks onto their employees. Many people didn’t understand how these plans were designed and were shocked that they had to pay the full cost of their doctor visits out of their health savings accounts, assuming they were funded. Failing that, they just had to pay these large bills out of pocket.

This long experiment has objectively failed to keep its promises to bring down healthcare costs. Instead, it has saddled more Americans with medical debt despite those Americans technically being insured. Healthcare costs have continued to rise.

High-deductible health plans are already extremely common in the Healthcare.gov exchanges (particularly the bronze plans), yet premiums even for those plans have continued to skyrocket despite consumers having plenty of skin in the game.

Yet conservatives continue to double down on this failed experiment, simply because they are unwilling to do what it would take to actually solve the problem. That would mean addressing the unusually exorbitant prices for healthcare services, prescription drugs, medical devices, and health insurance itself in the USA compared to other rich countries that provide universal healthcare.

When private equity firms take over emergency departments, more patients die

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In yet another example of the dangers of healthcare profiteering, a study published in journal Annals of Internal Medicine found that hospitals that were bought out by private equity firms experienced a significant increase in emergency room patient deaths compared to hospitals that were not.

But why?

According to researchers Kannan et al., “After acquisition, private equity hospitals reduced ED salary expenditures by 18.2% (−$12.63 per inpatient bed day; 95% CI, −$22.74 to −$2.52; P = 0.015) and ICU salary expenditures by 15.9% (−$8.46 per inpatient bed day, CI, −$13.21 to −$3.72; P < 0.001) relative to control. This occurred alongside average hospital-wide reductions in full-time employees by 11.6% and salary expenditures by 16.6%, relative to control.”

In other words, private equity firms pushed the hospitals they own to understaff their emergency departments in order to make their investments more profitable, but that came at the cost of patients’ lives..

“Do not resuscitate” scheme by UnitedHealth Group shows private health insurance companies are the real death panels

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Remember when Sarah Palin’s “death panels” conspiracy theory almost sunk the Affordable Care Act?

“The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society.'” — Gov. Sarah Palin (R-AK), August 7, 2009

People were understandably upset with the idea that people’s healthcare, and therefore their lives, could be taken away because they had become too costly. Of course, it was complete nonsense. There was initially a provision in one of the health care reform bills to pay physicians to discuss end-of-life care with their patients and write down their decisions, but that was removed because of Palin’s fearmongering. It would have saved a great deal of money.

Fast-forward to 2025, and we’re finding out who is actually doing death-panel things: private health insurance companies.

The Guardian reported that health insurer UnitedHealth Group paid nursing homes to change some of their residents’ status to “do not resuscitate” or “do not intubate” in order to prevent costly hospital admissions.

Internal emails show, for example, that UnitedHealth supervisors gave their teams “budgets” showing how many hospital admissions they had “left” to use up on nursing home patients.

The company also monitored nursing homes that had smaller numbers of patients with “do not resuscitate” – or DNR – and “do not intubate” orders in their files. Without such orders, patients are in line for certain life-saving treatments that might lead to costly hospital stays.

Two current and three former UnitedHealth nurse practitioners told the Guardian that UnitedHealth managers pressed nurse practitioners to persuade Medicare Advantage members to change their “code status” to DNR even when patients had clearly expressed a desire that all available treatments be used to keep them alive.

End-of-life care is expensive and often does not generate value in terms of quality-adjusted life years (QALYs). According to Kaiser Familly Foundation, “In 2014, beneficiaries who died at some point during the year accounted for 4% of all beneficiaries in traditional Medicare, but 13.5% of traditional Medicare spending.”

But patients deserve to make their own healthcare decisions about end-of-life care and not to have anyone — the government or private health insurance companies — make it for them.

It’s not clear whether any patient was actually denied lifesaving care as a result of UnitedHealth’s practices, but if anyone did die as a result of this status being flipped, I would recommend charging everyone involved with first-degree murder.

Trump’s Big Beautiful Bill will mean big healthcare costs for citizens, hospitals

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As reported in KFF Health News, the reconciliation bill recently signed into law by President Trump reduces federal health spending by about $1 trillion. That might be good news for the government (although the tax cuts passed will reduce revenue by significantly more than the spending cuts in the bill), but it’s bad news for Americans who have been helped by this government spending.

“The bill, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health coverage gains of the Biden and Obama administrations. Their policies made it easier for millions of people to access health care and reduced the U.S. uninsured rate to record lows, though Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud.” — KFF Health News, July 3, 2025

Most of the cuts impact Medicaid, including work requirements for beneficiaries and provider taxes that increase reimbursements to hospitals and other institutions to make up for low Medicaid reimbursements. This will have a particularly acute effect on rural hospitals with high Medicaid populations.

Many of the provisions in this bill roll back provisions in the Patient Protection and Affordable Care Act (also known as Obamacare) that expanded Medicaid eligibility and reduced the number of uninsured Americans.

Pediatrician in Congress schools RFK, Jr. on vaccination

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Congresswoman Dr. Kim Schrier (D-WA) recently flexed her credentials as a pediatrician in a testy exchange with HHS Secretary Robert F. Kennedy, Jr. in a House Energy Committee hearing on Tuesday after Kennedy had dismissed every member of the CDC’s Vaccine Advisory Panel.

It did not go well for Mr. Kennedy. Unlike Dr. Schrier, Mr. Kennedy has never treated measles, bacterial meningitis, or pertussis.

Can anything good come out of murder of UnitedHealthcare CEO?

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In the wake of the shooting of UnitedHealthcare CEO Brian Thompson, many people have cheered the assassination as a well-deserved comeuppance. I completely understand, and I have plenty of issues with how all health insurance companies operate. Quite frankly, I detest these people.

Tempting though it may be, street justice is always a dangerous precedent and won’t pay for a single person’s healthcare. Sadly, I doubt we will be able to intimidate our way to a more just and equitable health system. I do hope this awakens executives in the health insurance industry to what I used to hear on the phone every day when I worked there: the level of extremely justifiable anger toward their practices.

One of the accompanying stories about this regards the reversal of a policy my former employer, Anthem Blue Cross and Blue Shield, planned to implement regarding anesthesia. Was Anthem scared straight after the CEO of one of their competitors was gunned down? Was the shooter a vigilante hero who actually accomplished something positive?

We may not like the idea of obtaining prior authorization for medical services, but it is an important check on providers wasting money on unnecessary services. Anthem’s unpopular medical policy about anesthesia time is actually important to force anesthesiologists to follow standards of care. With so much money on the line, not all doctors are working with your best interests in mind.

Health insurance is an inflection point in our healthcare system, but we should also understand that everything we hate about health insurance is a result of the skyrocketing costs that underlie healthcare. If your premiums go up, you’re angry. If the insurance industry denies your claim, you’re angry. If your deductible goes up, you’re angry. If your doctor goes out of network, you’re angry.

But remember that insurance is strictly regulated. The Patient Protection and Affordable Care Act actually added more regulations for insurers that require them to spend at least 80% of the premiums they receive from a group on claim payments or issue refunds. It’s not 80% of what they get from each individual because insurance is about spreading risk among many individuals.

Insurers are also required by law to maintain large cash reserves so they can be relied upon to pay out claims, even if those are larger than their actuaries expect. This is for good reason. If claim payouts are higher than expected, premiums must increase in order for them to stay afloat. Even non-profit insurers face these same issues and tradeoffs.

So, what’s the bottom line? People need to be realistic about the power health insurance companies have and how they may be the symptom rather than the disease. The real disease is that healthcare services in the USA cost much more than they do abroad.

Personally, I don’t blame health insurance companies for following their legal obligations to balance premiums, deductibles, and claim payments based on actuarial value. It really is just math, and they really are bound by the law.

Where I do fault them is in their political activity. Like many industries, the health insurance lobby (particularly a group called America’s Health Insurance Plans) aggressively lobbies the government to support industry profits.

Clearly, the system (or non-system) that the USA employs has failed patients and left them in mountains of debt. As much as health insurance companies want to control costs, when doctors and hospitals threaten to leave their networks, their members get angry and call in to people like me (in my previous life). But those members don’t understand that the network dispute is about how much the doctor or hospital is going to get paid. The more the insurance pays out in claims, the more they have to raise premiums and deductibles just to keep up with the claim payments and their legal obligations.

These providers play the different insurance companies off each other to give themselves leverage against the insurance companies. The largest provider organizations continue to swallow up smaller clinics, smaller hospitals, and smaller physician groups so they can grow larger and larger. The larger the provider group, the greater the disruption if they go out of network. It becomes an arms race with the insurance companies that also grow ever larger so they can have more leverage in the opposite direction. But that hasn’t played out, as healthcare costs continue to skyrocket.

And so, the health insurance industry needs to resign itself to the fact that it can’t solve our nation’s problems. It should stop pretending otherwise.

What can solve it? A single-payer system that forces doctors and hospitals to accept lower reimbursement rates, risk-adjusted capitation instead of fee-for-service payments, and puts a lid on unnecessary procedures. Fraud is a real and expensive problem in Medicare and Medicaid, and it usually comes from doctors.

A single-payer system also has the advantage of being redistributive. We can tax people based on how rich they are instead of charging everyone the same amount whether they can afford it or not. So, the rich subsidize the poor, and I think the redistribution is the best part of all.

In the meantime, perhaps we should cut the health insurance industry at least a little slack and attack the root causes of the USA’s inept, wasteful healthcare system.

Abortion is healthcare, and lies lead to bad health policy

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I had a recent conversation on social media with a man who said he was OK with paying tax money for abortions in cases of rape and incest but not paying for “carte blanche” abortions. He also said that moving abortion back to the states would lead to smaller government.

I think he failed to understand what was really happening with anti-abortion laws. The Hyde Amendment famously prohibited tax dollars from paying for abortions under any circumstances. The use of tax dollars was never the issue in the Dobbs v. Jackson Women’s Health Organization Supreme Court decision. This decision allows state governments to criminalize abortion.

The anti-abortion movement traffics in misinformation, and one of their favorites is suggesting that taxpayer dollars are being used to pay for abortions. Former President Trump also falsely claimed that abortions are being performed after birth, dubbing them “executions.” It is quite common for anti-abortion groups to suggest abortions happen later than they typically do, but this is a whole new level of deception.

The real-world consequences of these abortion bans are staggering. In Texas, pregnancy-related deaths increased by 56% after the state’s abortion ban took effect in 2021.

In my state of Indiana, GOP lieutenant governor candidate Micah Beckwith said he wants to make Indiana’s abortion ban even more restrictive by removing the exceptions for rape and incest.

So, returning abortion to the states is not about making government smaller or saving tax dollars. It’s actually making government bigger by criminalizing something that was previously legal.

You hate your health insurance company for the same reason you hate your cable company

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It’s not all their fault.

According to a recent Harris Poll, health and life insurance companies are among the least-trusted companies in the US. Just 7% of the surveyed 2,250 adults told Harris they trusted their health insurance company, while 10% said the same of life insurance companies…

…The health and life insurance sectors narrowly beat out telemarketing and social media companies, with a 6% approval rating; oil companies with 4%; and tobacco companies with an abysmal 3%.

Insurance Business America, June 16, 2015

Ouch.

I spent four years working at Anthem Blue Cross and Blue Shield, most of which was spent answering calls from members. As the face of the company, I felt that mistrust directed right at me. I was often the bearer of bad news, and people tend to shoot the messenger. And, in a way, that’s also what health insurance companies are: the messengers of bad news about our healthcare system.

(Side note: Please be kind to the people answering the phone. They are at the bottom of the totem pole, and they’re not the ones making the decisions. They have highly stressful jobs, and they’re really trying to help you as much as they possibly can.)

Is that mistrust of the health insurance industry justified? Yes and no.

Running a health insurance company is an endless series of tradeoffs and competing priorities. There’s no way to please all of the people all of the time, and that holds especially true in this industry.

So, here are a few things to consider that you might not have thought about.

1) Health insurance plans and premiums are tightly regulated. Each state has a department of insurance that must approve all health plan premiums based on their actuarial value and claims experience. Setting these amounts is really just a question of math, and that’s why actuaries are so valuable. Not only that, but insurers are required by law to keep a large amount of cash reserves on hand to pay claims. Different insurance companies offer different sets of plans, but the fundamental rules remain the same. And, with the Patient Protection and Affordable Care Act, insurers must pay out at least 80 percent of their premiums out in claims or send their customers a refund for the difference. So, that leaves the other 20 percent for shareholder profits, buildings, technology, marketing, employees, and everything else. Note that these ratios are based on the premiums and claims for an entire group and not just you as an individual.

2) You’re probably not the primary customer. If you have an employer-sponsored health plan, your employer chooses your plan. They have many health plans competing for their business, and one of the primary concerns (if not the primary concern) is price. Health insurers offer a variety of plans that are more and less comprehensive, but employers will understandably gravitate toward plans that cost less. The plans that cost less are going to be less generous with benefits because of what I mentioned before about actuarial value. So, if you are dissatisfied with your benefits, it’s not because the health plan didn’t offer a more generous plan; it’s that your employer didn’t want to pay for it. Even if you buy your own health insurance, you undoubtedly face these same cost pressures and need to strike the right balance between paying premiums and paying potential medical bills that the insurance doesn’t.

3) Your health insurance company is kind of like a TV provider. You have probably seen TV networks or local stations getting dropped from cable (or satellite or streaming) subscriptions or warning you that they are about to be dropped. Ultimately, the TV network is having a contract dispute with the cable provider. In order to keep carrying the channels you want to watch, your cable provider has to pay up to the networks. When contracts are up for renewal, there are often disputes about how much the provider has to pay. And it’s exactly the same thing with health insurance companies getting into contract disputes with physicians and hospitals over reimbursement rates. If the health insurance company has to pay higher reimbursement rates to physicians and hospitals in order to keep them in the network, they have to pass that increased cost along to its customers in terms of premiums. I had to answer a lot of questions about these network disputes with people worrying that their doctor or hospital was about to go out of network, and the only thing I could explain was that they’re having a dispute about money. As long as there are multiple sources of revenue, physicians and hospitals can play them off each other as they seek higher reimbursement rates.

At the top of this post, I said the mistrust wasn’t all their fault. With perhaps a few exceptions, they are following the law, and they have lawyers and compliance officers to make sure of it.

Yet some of the mistrust by consumers is well-deserved, and that mistrust should be directed at their political activities. Private health insurance companies simply can’t fix the medical arms race and skyrocketing reimbursements on their own, and that’s because there are multiple insurers. Health insurance companies spend large amounts of money on lobbying and advertising to resist regulations unfavorable to them or being legislated out of existence altogether.

There is one solution that really can help, and that’s a single-payer system. If the government were the sole source of revenue for healthcare providers, then that would be a monopsony. And monopsony power can drive down costs. They would have to accept what the government reimbursed or stop practicing altogether. (Yes, shortages are a real danger of monopsonies that we would have to consider.)

It’s already rare to hear about providers no longer accepting Medicare, even though the reimbursement is lower than from private insurance, because so many patients are on Medicare. If every patient of every age were on Medicare, then that would decrease physicians’ and hospitals’ leverage even more.

Only a single-payer system can truly address the exorbitant prices for medical services in the USA. Insurers have been unable to contain these costs for the reasons I described earlier, and the result is that even insured patients are paying higher and higher medical bills while their employers pay higher and higher premiums.

Although private insurers aren’t the primary cause of the cost problem, they need to get out of the way of a solution that could really contain costs.

Wait times are still a problem in Canada

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Critics of the Canadian health system (particularly from the USA) tend to bring up rationing.

“I’m 59. In either Canada or Great Britain, if I broke my hip, I couldn’t get it replaced.”

Rep. Roy Blunt (R-MO), 8/12/2009

Blunt was pants-on-fire wrong about the Canadian government explicitly denying hip replacements to 59-year-olds.

“At least 63 percent of hip replacements performed in Canada last year and two-thirds of those done in England were on patients age 65 or older. More than 1,200 in Canada were done on people older than 85.”

St. Louis Post-Dispatch, 8/16/2009

But the real problem is how long he would have to wait to get it. An editorial by The Toronto Sun spells out the problem.

One of the reports, by the Canadian Institute for Health Information, found that among other medical procedures, 30% of patients across Canada in 2018 requiring hip or knee replacement, or cataract surgery, did not have their procedures done within recommended wait times.

But that’s only half the story because the recommended wait times for hip and knee replacement are themselves excessive — 182 days or six months — and 112 days or almost four months for cataract surgery.

…In reality, Canada’s health care system could not function without excessive wait times for medically necessary care, as a way of rationing health care to Canadians.

The Toronto Sun, 3/30/2019

According to a Kaiser Family Foundation analysis of OECD data, Canadians spend less than half of what Americans spend per capita in total healthcare costs. And, yes, some of those savings come from reducing the overhead from multiple payers, but some of it is also from rationing.

The Canadian government places limits on the number of medical facilities built in a given area (sort of like certificate-of-need laws in some states), and their ratio of primary care physicians to specialists is much higher than it is in the USA. The Canadian government isn’t so much “pulling the plug on Grandma” (as Senator Chuck Grassley might say) or convening “death panels” (as former Alaska Governor Sarah Palin might say), but they are engaging in implicit rationing.

We Americans ration healthcare too, but we do it based on each individual’s ability to pay the out-of-pocket expenses for a given medical procedure. People with rich health insurance benefits and/or deep pockets get much better access to healthcare than people with fewer resources. So, Rep. Blunt with his excellent benefits could get a much faster hip replacement in the USA than in Canada, but an uninsured or underinsured person might never get it…or go bankrupt.

And affluent people get more medical facilities and physicians closer to them. Just as a real-world example, Exit 210 of Interstate 69 in Fishers, Indiana hosts two competing hospitals within sight of one another…0.9 miles apart. A little to the west in Carmel, those same two hospital chains built hospitals 2.6 miles apart along U.S. 31. Indiana has no certificate-of-need laws, so these two chains are building hospitals so close together — just like a CVS and a Walgreens — because Hamilton County is the richest county in Indiana, and they’re competing for those large private health insurance dollars. There are currently 10 hospitals in Hamilton County, and possibly two more on the way.

Meanwhile, Fayette Regional Health System in rural Connersville, Indiana found itself in bankruptcy in 2018 and nearly closed before being bought out by Reid Hospital, a larger system based in the next county over. It is the only hospital in Fayette County, Indiana. It simply wasn’t bringing in enough revenue from the area’s heavy Medicare and Medicaid populations to stay afloat on its own…something single-payer advocates need to consider.

(Fayette Regional Health System has since been renamed Reid Health Connersville.)

There is no perfect health system. There are always tradeoffs to make. At least in Canada, the misery is spread equally.

Is private health insurance as “beloved” as Trump says?

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President Trump is known for bizarre tweets, but this one does Democrats a particularly big favor.

Polling data shows Americans clearly DON’T love private health insurance companies and prefer Medicare.

Only 8% of Medicare beneficiaries 65 or over rated their coverage “fair” or “poor,” the nonprofit Commonwealth Fund found.

By comparison, 20% of those with employer-based coverage gave their insurance plan low marks. And 33% of people who bought insurance on their own reported unhappiness with their coverage.

In fact, trust in private health insurance companies has reached an all-time low.

With premiums and deductibles “far too high” as President Trump said, who wouldn’t want to lose their private health insurance in favor of Medicare?

Indeed, 56 percent of Americans surveyed by the Kaiser Family Foundation would prefer to get their health insurance from the federal government…and government health care has become even more popular with the phrase “Medicare for All” — phrasing that Trump used in his tweet.

Republicans are terrified of the idea of Medicare for All because of the additional tax burden it would create, particularly for their wealthy donors and the damage to private insurance schemes.

But would that be such a big loss? Is Trump saying that the Democrats are threatening us with a good time?