Private insurance companies are getting richer in Washington while fewer people are receiving coverage, according to a study released by two community organizations Thursday.The Washington Community Action Network and Northwest Federation of Community Organizations found that the rate between profit growth and people covered is out of alignment among the state's top three insurance companies.
The combination of Regence BlueShield, Premera Blue Cross and Group Health Cooperative saw profits go from $11 million in 2002 to $243 million in 2003 and $431 million in 2006. Cash surplus among the three was $833 million in 2002 and $2.2 billion in 2006.
Comparatively, in 2002 the carriers covered 2.37 million people, based on full-year coverage, which declined to 1.97 million in 2006, a 16.9 percent decline.
"Obviously these figures raise some concerns," said Julie Chinitz, health policy analyst for the Northwest Federation of Community Organizations and author of the report. "The overall picture we walk away with is one of mismatch."
Chinitz said the purpose of the report is to recommend an increase in public oversight over private insurers and that a public plan be created as an alternative to private coverage.
Profits outpace costs
The report states that the rising costs of health care are being surpassed by private health insurance profits. Revenue for the big three companies increased 23 percent between 2002 and 2006, compared with a 16 percent rise in overall hospital and medical expenses.
Deana Knutsen, board chairwoman for the Washington Community Action Network, said the government needs to be a "stronger watchdog" over the industry. The report praises lawmakers for some steps they have taken, including the establishment of the Health Insurance Partnership, which would allow small employers to provide subsidized insurance to employees. At the same time, it states, "Questions remain as to its affordability, quality and efficiency."
A 2007 bill that would have allowed the Washington insurance commissioner to regulate rates did not become law and the report calls for "a more robust response from lawmakers" as a result.
The report, "Insuring Health or Ensuring Profit?: A look at the Financial Gains of Washington's Health Insurers," is available online at www.nwfco.org/pubs/2008.0110_Insuring.Health.or.Ensuring.Profit.pdf.
Paul craig covers the health care industry for The Columbian. He can be reached at 360-759-8072 or via e-mail at paul.craig@columbian.com.
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