Health Insurance Industry’s Bag of Tricks

Every person needs health care, but — let's face it — usually we don't know when we're going to need it or how much we'll need. This uncertainty is called "risk."

The purpose of health insurance should be to spread health care costs among many people. By spreading risk among all of us, we can protect ourselves from the astronomical costs of a health setback and make sure we all get the health care we need — it's the right thing to do and the efficient thing to do, too.

But, under the health insurance system we have now, insurance companies make money by avoiding risk, not by spreading it. To boost their profits, they try to sell insurance to "good risk" (people who are young and healthy) and limit their "bad risk" (people who are older and/or have health conditions). Figuring out how to do that is the job of their actuaries.

Here are just a few ways insurance companies game the system to boost their profits at the expense of your health:

• Reject your application based on your health status.


• Charge much higher premiums for people or groups considered riskier — such as those that are older, have health conditions, or work in more dangerous fields.


• Attach riders to your health insurance policy that exclude coverage of conditions or body parts or include a pre-existing condition-waiting period.


• Create a high-deductible, lower-premium plan for you if you are younger and healthier, and create much more expensive plans if you are older or a person with health conditions.

When they do this, we all pay. The very high prices they charge for good coverage leave many people uninsured — or with insurance that's hardly worth the paper it's written on.

And when insurers offer so many different insurance plans, doctors and hospitals become overwhelmed with all the paperwork. They have to hire staff and spend lots of money just to manage billing and deal with insurers.

A health care system based on the gaming of private insurance companies provides no guarantees and no security — and wastes a lot of money!

—Learn more about the insurance companies' Foul Play.