Finding the Truth

It is very difficult to find the truth and to know when you have found it. There are at least two sides to every story and to every issue. If you get all of your information from only one source, it’s highly likely you aren’t getting both sides of the story. Almost all sources of information are biased. The party reporting on or discussing an issue generally presents the facts supporting his or her bias while ignoring or distorting the facts supporting the other side of the issue. The only possible way to understand any issue is to read and listen to multiple sources with different biases.

Let’s consider an example of how difficult it is to find the truth about an issue. During the last several weeks, politicians and members of the news media have been excoriating the health insurance industry over recently announced premium increases. Wellpoint, one of the nation’s largest health insurance companies, recently announced premium increases of up to 39% for individual health insurance plans in California. Other insurers have filed applications with state regulators seeking to raise premiums for individual health insurance plans by 56% in Michigan, 24% in Connecticut, 23% in Maine, 20% in Oregon, and 16% in Rhode Island.

These premium increases, on the surface, seem outrageous. During the last several years, the premiums for my individual health insurance policy with Blue Cross Blue Shield of Georgia have increased between 20% and 25% each year. I’m not a happy camper when I get the notice each year showing the increased premium for the following year. My reaction, based strictly on emotion, is always that the premium increases are unjustified.

Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services, has launched a vicious attack against the insurance companies for their recently announced premium increases. In a column published this week by The Atlanta Journal-Constitution, Secretary Sebelius wrote, “It’s outrageous that insurance companies are reaping huge profits on the backs of working families who are already struggling to make ends meet. It’s also all too familiar.”

Predictably, Secretary Sebelius argues the premium increases prove the need for President Obama’s health insurance reform. She says, “The longer we go without reform, the more families in Georgia and across the country will open up letters saying things like ‘your premiums are going up 30 percent….’”

The New York Times has jumped on the bandwagon with those criticizing the premium increases. In an editorial published on February 19, the Times wrote, “Clients were understandably furious when Anthem Blue Cross, the largest for-profit health insurer in California, announced huge rate increases for people who buy their own insurance: an average increase of 25 percent, and a 35 percent to 39 percent rise for a quarter of the purchasers. The move also provided a textbook example of why the nation badly needs comprehensive health care reforms.”

Both Secretary Sebelius and the Times referred to the outrageous profits recently reported by WellPoint, the parent company of Anthem Blue Cross in California. Secretary Sebelius wrote, “Even more infuriating for the people receiving these letters, this increase didn’t happen because Wellpoint had fallen on hard times. WellPoint recently announced more than $2.7 billion in profits from the most recent quarter alone.” The Times referred to the “substantial profits” reported by the nation’s largest health insurers last year.

If you listened only to Secretary Sebelius and The New York Times, it would be clear to you the health insurers are greedy and are taking advantage of their customers. But, as in other matters, there is another side to the story. In an editorial published on February 18, The Wall Street Journal said, “Wellpoint’s rate hikes are the direct result of the Golden State’s insurance regulations—the kind that Democrats want to impose on all 50 states. Under federal Cobra rules, the unemployed are allowed to keep their job-related health benefits for 18 to 36 months. California then goes further and bars Anthem from dropping these customers even after they have exhausted Cobra. California also caps what Anthem can charge these post-Cobra customers. Most other states direct these customers to high-risk pools that are partly subsidized, but California requires the individual market to absorb the customers and their costs.”

Wellpoint also offers health insurance plans in Maine and Connecticut and is seeking large premium increases in both of those states. A spokesman for Wellpoint was quoted as saying the increases are due to rising medical costs and sicker customer pools. As people lose their jobs, those who are younger and healthier are more likely to go without insurance, which results in a larger percentage of policyholders who are sick and elderly. In Michigan, state law requires insurers to accept all individual applicants. As a result, Blue Cross Blue Shield of Michigan, a non-profit insurer, had losses of $280 million in the individual market in Michigan. The insurance companies say they need the premium increases to offset the losses resulting from their compliance with government regulations.

As for the “outrageous” profits recently reported by WellPoint, The Wall Street Journal observed that, “$2.2 billion of WellPoint’s $2.7 billion fourth-quarter earnings came from the one-time sale of a subsidiary.” The editorial also noted that Wellpoint “lost $58 million in California on its post-Cobra customers in 2009. If Wellpoint didn’t raise premiums amid these losses, it would soon be under assault from its shareholders, if not out of business.”

It always amazes me when politicians and editorial writers refer to the “outrageous” profits reported by a business. They always throw out a big number, like a billion dollars, without providing any context to the number. You can’t evaluate whether a billion dollars is a reasonable or an unreasonable profit without knowing the amount invested in the business. A billion dollars could represent a 1% or a 40% return on investment. Don’t expect the politicians or editorial writers who are promoting a political agenda to give you the information you need, unless the information supports the position they are seeking to advance.

The New York Times argues the premium increases, combined with the “substantial” profits earned by the nation’s health insurers, prove the need for ObamaCare. The Wall Street Journal argues the premium increases represent a preview of what will happen nationwide if ObamaCare passes. “The Democratic bills would control what insurers could charge and force them to take all comers, regardless of health status. These burdens were supposed to be made tolerable by requiring all Americans to buy insurance or face a penalty. Yet when this ‘individual mandate’ proved to be unpopular, Congress watered it down so that younger customers would be able to pay the penalty knowing they can wait until they’re sick to pay the more expensive premiums. The only way an insurer can make up for these higher costs is to raise premiums.”

The controversy over the increased health insurance premiums is typical of the way most issues are debated today. Each side selectively presents only the facts supporting its political agenda and ignores or distorts any facts that could be used to oppose its agenda. We expect this from lawyers, who get paid to represent a client’s interests. We expect this from politicians, who are seeking to advance their political agenda rather than find the right solution to a problem. Unfortunately, most of us now expect the same bias from the news media, which no longer provides balance and objectivity, if it ever did. Today, most members of the media are as biased as the politicians about whom they are reporting.

It would be nice if I could find a place where I could get both sides of an issue in a clear and objective manner. Unfortunately, I haven’t found such a place. Everywhere I go I can identify bias and lack of objectivity. The only solution I know for those trying to understand both sides of an issue is to read and listen to multiple sources with different biases. Finding the truth is becoming more difficult all the time.