Three Big Health Insurance Myths

When I was a health insurance communications exec, I was a big part of an ongoing effort–funded by your premium dollars–to get you to believe big myths about the U.S. healthcare system.

Even a minute or two of Googling would have disproved our claims, but we succeeded because we knew most people wouldn’t bother. For the most part, health reform advocates have also not been up to the task of challenging the misinformation and setting the record straight.

Why do my former colleagues keep this deception going? For a single reason: to protect what has become an extraordinarily profitable status for health insurers. As long as you (and the people you vote for) keep believing the myths, you will be parting with far more of your hard-earned dollars than you should to keep insurers’ shareholders happy.

Let’s look at three of those myths.

Myth 1: The U.S. has the best health care system in the world. 

While there is no doubt we have some of the very best hospitals, technology, physicians and other caregivers, we are nowhere close to having the best system. My former colleagues and I perpetuated that myth because we wanted you to think that any kind of significant reform is unnecessary, especially if the reform might reduce insurance revenues and profits. We didn’t even want you to think that the millions of Americans without insurance is a big deal because, well, those are just people shirking their individual responsibility by remaining uninsured. In other words, it is their fault, not the system.

In 2004, long before the Affordable Care Act was passed, the Commonwealth Fund launched a major project to assess the performance and fairness of several developed countries’ health systems. Of the 11 systems assessed, ours came in dead last. They have updated the assessments every couple of years, and the top-performing systems have varied over time, but one thing has remained constant: the U.S. continues to bring up the rear–despite the ACA.

The Commonwealth Fund’s most recent assessment, published just this month, found that once again, the United States “trails far behind” other high-income countries on measures of health care affordability, access, administrative efficiency, equity, and outcomes. This is despite the fact that we spend far, far more of our GDP on health care than any other country on the planet.

So yes, we do indeed have some of the world’s best health care providers, but they are off limits to millions of us, because of the fragmented nature of how we pay for care and the administrative burden and costs associated with world-leading inefficiencies on the payer side.

Myth 2: Our employer-based system of health coverage works beautifully, and we can count on it to be there when we need it. 

That myth was busted big time last year when we witnessed millions of Americans losing their coverage along with their jobs during the pandemic. The truth is that most people who have employer-sponsored insurance (ESI) are just a layoff or plant closing away from being plunged into the ranks of the uninsured.

The insurance industry and its allies, including the U.S. Chamber of Commerce, which just published a commentary on its website extolling the virtues of ESI, have persuaded politicians on both sides of the aisle to remind us that more than 150 million Americans get their coverage through the workplace. What they don’t tell us is that that number hasn’t increased much at all over the past 20 years while the U.S. population has grown by more than 50 million.

One big reason: fewer than a third of small U.S. businesses now offer coverage to their workers, compared to around half two decades ago. The average family policy through an employer has increased to more than $21,000 a year, according to the Kaiser Family Foundation, and the cost of insurance has gotten so high that more and more small employers are throwing in the towel.

Even our biggest employers are now realizing that the cost of providing coverage to their workers is out of control. An astonishing 87% of the top executives of America’s largest companies say the cost of providing health insurance will become unsustainable for them in the next five to ten years, according to a survey conducted earlier this year by the Kaiser Family Foundation and the Purchaser Business Group on Health.

Myth 3: Health insurers are appropriate and efficient gatekeepers to healthcare.

Under the pretense of reducing unnecessary and inappropriate care, insurers began making providers get approval from them in advance before treating people enrolled in their health plans. But by putting increasingly aggressive prior authorization requirements in place, these policies also reduce access to care that is both necessary and appropriate, and insurers avoid paying an untold number of claims.

Insurers have become so aggressive that one in four doctors say prior authorizations requirements have caused “serious adverse events” for their patients and in more than a few instances have contributed to premature patient deaths (according to the American Medical Association).

Insurers have succeeded in persuading employers and policymakers that these prior authorization requirements save money, but there is little evidence to support that. In fact, prior authorization demands add considerably to the high administrative expenses the Commonwealth Fund and other researchers note are unique to the U.S. healthcare system.

Ultimately, these myths serve to preserve the status quo. Insurers continue to bring in record profits, by making care harder to access. Perpetuating these myths are central to deflecting criticism and avoiding reform.