In yet another example of health insurance companies ripping off their customers, the Los Angeles Times has reported that the Los Angeles city attorney’s office is suing a Texas insurer for fraud. The suit accuses HealthMarkets Inc. of tricking its California customers into “buying confusing policies riddled with exclusions and limitations.” Also named in the lawsuit are the insurer’s majority shareholders, two paragons of Wall Street excess – Goldman Sachs Group Inc. and Blackstone Group.
A victim interviewed in the Times story said she was financially ruined by the health insurer – something that would never happen in other industrialized countries because they provide their citizens with comprehensive health care as a right. According to the article, HealthMarkets has been under investigation in several states for abusive practices. The company has been fined almost $40 million dollars in the past two years.
There is a lesson to be learned from the HealthMarkets case: Americans must give up this absurd fantasy that every aspect of our lives should be governed by free markets. The city attorney says HealthMarkets was operating an elaborate scam. But that’s essentially what for-profit health insurance is – a racket. These insurers are leeches that take money from hardworking people and don’t provide patients or society anything of value. It’s the healthcare providers who heal; the insurance companies who steal. A person’s health is far too precious to be left up to the whims of a group of individuals whose primary goal is to make as much money as possible, even if they have to lie and cheat to get it.