Ms. Edwards:

The House Bill that is at the basis of your health care reform concern is just that. It is a bill.  We all know how complicated the federal legislative system is, and the bill that becomes law might not look a lot like the present House version because the Senate has yet to weigh in.  There just isn't comprensive bill yet, but we all have the right to ask questions and get the FACTS straight.

What is crucial to this discussion of heath care reform, I believe, is the education of  the average American of what (and that includes the average Texan) of how private for-profit insurance companies  work in our economy.  Their basic business model is simple to understand.  Traditional for-profit insurers in the INDIVIDUAL market must assess the risk of the driver, the property or the health  of the indivdual that applies for coverage.  When the risk is LOW, if the property is not located in a flood plain, for example; the driver hasn't had any accidents or tickets in the recent past; or if the individual is relatively young and doesn't have any serious pre-existing conditions, (we aren't talking about employer large groups here), insurance companies can provide affordable rates.  However, when potentially catastrophic losses are projected, when the driver, for example has several DWI's, if the individual has been diagnosed with cancer, or a huricane has completely devasted a certain coastal area, private insurance companies in order to protect their PROFIT will often increase the premiums significantly so as to make them unaffordable for many,  DENY individuals insurance completely, or as in the case with coastal property insurers, choose to completely WITHDRAW from a market from a defined high risk area. 

In the case of the TWIA, it was founded in 1970 when property insurance companies WITHDREW from coastal areas after Hurricane Celia caused catastropic losses.  This government "provider of last restort" by definition DOES NOT compete with private insurers.  It was never intended to do so. The alternative was to let the residents of these areas go with out insurance and face total financial loss when the next hurricane hit.  When this financial "pool" of all property and casualty companies authorized to write insurance in TEXAS is exhausted as with the terrible devastation we saw in Galvaston, yes, Texas taxpayer s along with the federal government stepped in to close the gap.  Would you prefer to let people, who paid claims in good faith, just experience total financial loss and the economy of that area just cease to exist? 

Now that we all can understand that the private insurance industry is based on RISK assessment, one can see why we are in a health care crisis in our country.  Historically, health insurance companies' profit model shows that they get their most "bang for their buck" so to speak by insuring large pools of relatively young, healthy workers in the employer based market.  The individual health insurance market, on the other hand, is frought with adverse risk and moral hazzard.  After all, what stops an indivdual from signing on and then coming down with a COSTLY catastrophic diagnosis of cancer or heart disease?  Aside from the notable non-profit Blue Cross/Blue Shield companies of the 1930's and 40's, insurance companies only jumped into this market in mass when our post WWII Congress, faced with mounting inflation and price controls, agreed that health insurance would be part of employeee compensation.  Their place in the lower risk employer based market was guaranteed by favorable tax legislation. 

The individual insurance market, on the other hand, is still considered a very RISKY, profit limiting market for health insurers.  That's why they cherry pick through the expensive process of underwriting, and the process of  rescinding policies after the policy holder experiences catastophic illness, has become the norm.  In the state of Texas we have a state run high risk pool which is designed in theory to catch those individuals who don't qualify for Medicare or Medicade, who fall outside of the employer based insurance system to obtain health coverage.  But by law, this program MUST charge DOUBLE the average premium that private insurers charge.  Therefore, private insurers in Texas can systematically DENY ooverage to those who have serious pre-existing conditons.  For example I don't have access to an employer health plan.  I was diagnosed with a stage I breast cancer in 2003 and have been told that I will have to be 10-11 years out from diagnosis to be insured under a private plan, such as Humana. My only option is the pricey high risk pool,$900 per month for a $1,000 deductible, $679 per  month for a $2500 deductible, $530 for a $5,000 deductible, and $466 for a $7500 deductible.  How many people in Travis county do you know, earning an average of $50,000 can afford these rates? 

Even in the employer based market, which I have had to deal with for many years, often comes between patient and doctor by disallowing certain procedures and pricey drugs in order to keep profit up and costs down.  I call this rationing.  Sometimes they just decide just not to pay out a legitimate claim. Over the course of the last 10 years when have been ill and in the process of recovering from a serious medical condition, yes, I have had to fight with insurance companies for coverage on numerous occasions. Believe me, the stress is something I wouldn't wish on anyone with a life threatening illness! 

And we musn't lose sight of the fact that even if insurance companies are willing to stop the practice of excluding for pre-existing conditions IF we mandate universal coverage, (thereby widening their product market) they still discriminate by sex and age.  After all, cancer, heart disease, and type II diabetes are diseases of aging and certain conditions affect more men than women as we age.  And by the way, that's why Medicare was such a needed reform!  Let's face it, those of us over 65 and yes, even those of us over the age of 50 are an overall a BAD risk!  Because of medical advances we can and do live with serious conditons, but treatment and prevention is becoming more and more expensive when high priced drugs,bloodwork, CT scans, and MRI's are thrown into the mix!  Then just throw in the problems of defensive medicine and tort reform for added measure!

Profit drives these companies.  Should you or I put all of our trust in an industry with supports CEO's multi million dollar salaries, such as the CEO of Cigna that earned $12.2 million per year and retired with a golden parachute of $73million to drive reform?  They (i.e. United Healthcare's Lewin Group) are willing to spend millions on lobbying and negative ads, but just think of how many individuals they could insure for this staggering amount of money.  If it is good business practice to reform, they WHY haven't they cleaned up the waste in their industry up until this point?  The answer, of course, is that it would be a cost that would cut into their PROFIT, and PROFIT makes healthcare more expensive for insured Americans. A government option, I believe, would force them to look at cost cutting measures.  Since it is a commonly held belief that the private sector ALWAYS does a better job than government, then they should prevail at least in the employer based market! 

If we only stop tossing around the the scary football of "socialized medicine", (by the way, Medicare might be paid for the taxes we pay, but the providers DO NOT WORK for the federal government and private insurance companies are given contracts state by state to administer and make payments. Overhead costs run only 3% as opposed to the 14-17% of private insurers.The VA, on the other hand, can be called "socialized" because all the employees, doctors included, work for the federal government) examine closely what we have and how we can work to improve it, then maybe we can come up with some useful solutions to this patch-work health care mess we find ourselves in! 

Ms. Edwards, I thank you for reading my comments.

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