# Did this health insurance reform bill save the insurance industry **URL:** \ **Category:** Great Debates\ **Created:** [March 25, 2010, 4:40am UTC](https://boards.straightdope.com/t/did-this-health-insurance-reform-bill-save-the-insurance-industry/533714 "2010-03-25T04:40:57Z")\ **Posts on this page:** 3\ **Page:** 1
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [March 25, 2010, 4:40am UTC](https://boards.straightdope.com/t/did-this-health-insurance-reform-bill-save-the-insurance-industry/533714/1 "2010-03-25T04:40:57Z")
There was a really good diary on Daily Kos about a month ago about the health insurance industry death spiral. > **[A Look Inside the Health Insurance Industry Death Spiral](https://www.dailykos.com/storyonly/2010/2/28/841466/-A-Look-Inside-the-Health-Insurance-Industry-Death-Spiral)** > > I thought I might be able to bring some additional insight into the death spiral discussion ... > [@](#): > > From 1999 through 2008, private-sector employment increased by just over 5 million employees. The percentage of employees in the private sector who work for firms offering health insurance fell from 89.1% to 87.7%, primarily due to small firms dropping coverage because of affordability issues. And the percentage of private-sector employees enrolled in self-insured plans jumped from 41.2% to 55.2% over those 10 years. This expansion was driven exclusively by the largest employers moving massively into self-insurance, jumping from 57% of employees in the largest firms covered by self-insurance in 1999 to a whopping 81.6% in 2008. The net effect is that private insurance companies lost 9.5 million members from their insured business over the last 10 years, while employers have taken on the financial risk of an additional 8.2 million employees through self-insurance during that same period. According to that diary, large companies with 1000 or more employees are preferring to self insure and administer/pay health claims themselves rather than hire an outside insurer to do that. This gives them more control, more information and lower costs than outsourcing insurance to a provider. At the same time, those on the private market can end up seeing massive rate hikes of 20-40%. This can cause healthy people to drop insurance leaving only the sick who need the insurance. This causes another round of rate hikes since you have fewer healthy people who pay more in premiums than they collect in benefits, which causes another round of all the people who do not need/use insurance to drop it. This basically causes individuals and small businesses to drop coverage and go w/o insurance while large businesses drop coverage and self insure. The end result is the market for health insurance companies keeps shrinking. I think our health care system is still headed for collapse anyway. But w/o the reform and mandating everyone buy private insurance, would the system have collapsed within 10 years? Are large companies still free to self insure when this reform is done or do they have to hire an insurance company? I know there was talk of ‘co-op plans’, but don’t know if those kinds of plans still exist in the final bill. ---
**Author:** ![Yersenia\_Pestis](https://avatars.discourse-cdn.com/v4/letter/y/e495f1/32.png) [@Yersenia\_Pestis](https://boards.straightdope.com/u/Yersenia_Pestis)\ **Post date:** [March 25, 2010, 5:04am UTC](https://boards.straightdope.com/t/did-this-health-insurance-reform-bill-save-the-insurance-industry/533714/2 "2010-03-25T05:04:44Z")
Maybe not. I, along with many other progressives that I spoke to, hope that this bill, which is FAR from ideal and perfect, is the first step towards us eventually (who the hell knows when this may happen) joining the rest of the civilized world in true UHC. Its also a great, much needed boost to the president, who has a ton of other things coming down the pipeline: financial reform, new energy policy, climate change, etc. ---
**Author:** ![R.P.McMurphy](https://avatars.discourse-cdn.com/v4/letter/r/7993a0/32.png) [@R.P.McMurphy](https://boards.straightdope.com/u/R.P.McMurphy)\ **Post date:** [March 25, 2010, 5:20am UTC](https://boards.straightdope.com/t/did-this-health-insurance-reform-bill-save-the-insurance-industry/533714/3 "2010-03-25T05:20:01Z")
Your point is a very good one that has generally been lost in the debate. I personally know of a very profitable small company that saved hundreds of thousands of dollars by providing their employees with Rolls Royce health coverage by being self-insured with a catastrophic override. Unfortunately, such an option isn’t available to most individuals. A family that is not part of an employee plan and wants to buy a comprehensive plan man have to pay $40,000/year in after tax dollars. The Dems have been demonized for passing this legislation but you are probably right. In the end the insurance lobby won out. It saved their sorry asses. Realize, the insurance companies add nothing to health care. All they do is take a cut of the pie, create a huge administrative cost, pay big salaries and build nice offices. Again, they contribute nothing to better health care and, in fact, restrict it.