The Department of Justice ruled that RFK Jr. has broad discretion when it comes to running the Department of Health. Several states challenged his stance on children’s vaccine schedules and recommendations. Perhaps as a nod to the 15 states that challenged him, Kennedy added two physicians to his vaccine committee. The influence of the two physicians remains to be seen. Meanwhile, the number of measles cases, once eradicated, is increasing weekly. The vast majority of the cases are due to vaccine skepticism. Kennedy has pledged to make America healthier by improving diets and what goes into our processed food. Lately he has turned his sights on the highly surgarized (up to 115 grams) “coffee” drinks served up by Dunkin Donuts and Starbucks. He’s sure to incur the wrath of both companies and their millions of customers. (But 115 grams of sugar is a lot.)
How Insurers Fared in 2024
It now costs a family of four $26,000 per year for health insurance. And that does not count the annual deductible, coinsurance and copays.
Politicians have been quick to single them out for the high premiums and profiteering. Turns out high premiums simply are a reflection of the cost of care we receive, including hospitalization, procedures, drugs and physicians. The Affordable Care Act, passed in 2010, intentionally capped the amount of profit an insurer could retain at 15% of premium income collected. Eighty-five percent of premium income must be used to pay claims. Any amount less than 85% must be refunded. Gross margin per patient and medical loss ratios among the four major markets were all close and within ACA regs.
The second column is the medical loss ratio. All four markets spent more than the minimum 85% requirement on claims meaning all “profits” were below the maximum 15%.
The first column reflects “profit” per member. Interestingly, the Advantage plans were most profitable. Go figure. A lot of money is spent on seniors versus under 65. One can see why Medicare is going to increase what it pays an Advantage plan per year per senior by just 1%. Bottom line is insurers are not the problem. They are not gouging the public. They can’t because of the ACA. Prior to the ACA, insurer medical loss ratios would be in the neighborhood of 60%. Then they were gouging the public. So when someone says the ACA is “lousy care” or the “insurers are screwing the public” they have misinformed us and oversimplified the problems with our convoluted healthcare system.
RSV and COVID—19 Deaths
Speaking of vaccine skepticism, according to the Centers for Disease Control and Prevention 56,000 people died last year from either RSV or COVID –19. The respiratory syncytial virus caused 190,000 to 330,000 hospitalizations over a year. COVID— 19 caused 290,000 to 450,000 hospitalizations over the same year. The vast majority of deaths were among those not vaccinated. Vaccine skepticism has increased the cost of healthcare in our country significantly.
Surgeon General Nominee
Secretary of Health Kennedy has nominated physician Casey Means to be the country’s surgeon general. Means left her surgical residency years ago to become what she calls a “wellness influencer.” Means does not have a license to practice medicine. She appeared before the Senate Health, Education, Labor and Pension committee to answer questions. Observers noted she significantly toned down her previous criticisms of traditional medicine and the pharmaceutical industry. The hearing was contentious. Committee members voiced their frustration with Means’ evasive answers and measured responses. Two republican members, Lisa Murkowski and Susan Collins, remain uncommitted to her confirmation. A “no” vote from either member would most likely doom Means’ confirmation.
Charities Merge
Two of the country’s largest charities that provide medical debt assistance are merging. The Patient Advocate Foundation will combine with The Patient Access Network Foundation retaining the name Patient Advocate Foundation. Roughly 100 million people or about 1 in 4 of us live with medical debt totaling $220 billion. Most of which is now in active collection. We average $500 of medical debt per capita. There is virtually no medical debt in countries with universal healthcare.
Stores Closing
Rising costs and shifting shopper preference (la a supermarket-based pharmacies) are causing retail drug chains to close hundreds of stores throughout the country. Chains CVS and Walgreens plan to close 1,200 stores each. Rite Aid has already closed 2,000 stores as part of its chapter 11 restructuring and 7,000 stores, half of which were independent,
George W. Chapman is a retired healthcare business consultant who worked exclusively with physicians, hospitals and healthcare organizations. He used to operate GW Chapman Consulting based in Syracuse.