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Sunday, April 15, 2007


Medical care under capitalism - where does the money go?

Gee, where do you think?
When Blue Cross sells health insurance to someone who isn't covered at work, the company typically makes a 27 percent profit. By the time salaries and other administrative costs are accounted for, only half the money the company collects in premiums from that person goes for medical care.
You won't be surprised to learn that Blue Cross is the only major insurer opposing Gov. Arnold Schwarzenegger's "universal health care plan."

And how do they manage to make so much money? Well, here's one way:

The governor also wants to ban the practice of "cherry picking" young, healthy people least likely to go to the doctor, while denying coverage to others with even minor ailments.

That policy is legal - and not unique to Blue Cross. "The idea that you have to sell health insurance to any comer is antithetical to their business model," said Peter Harbage, a health care expert at the non-partisan New America Foundation who has advised the governor. "It's not how they make money."
I put Arnold Schwarzenegger's "universal health care plan," which was a phrase in the referenced article, in quotes above. Why? Because Schwarzenegger's proposal concerns health insurance, not health care. And, as the last quoted sentence makes rather clear, health insurance and health care are most definitely not the same thing. In large part they are, in fact, antithetical.

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