Health insurers are taking advantage of climate change to make billions of dollars in profits
Health insurers have been making billions in profits from the climate change that is pushing extreme weather across the country, a new study shows.
The findings come amid the fallout from a devastating wildfire that killed more than 600 people and destroyed hundreds of thousands of homes in Colorado and Nevada earlier this year.
The National Association of Insurance Commissioners released the report, titled “Insurance industry Profit on Climate Change,” on Monday, and said it found that the health insurers made $9.1 billion in profits in 2017.
The report said the insurers had a lot to gain from climate change because of the extreme weather events, which can be costly for insurers.
“Climate change and its effects on our economy will only worsen over the next decade,” the report said.
“Insurers will increasingly need to provide greater coverage, increase costs and expand care in order to maintain their profitability.”
Health insurers were responsible for more than half of all the losses caused by wildfires across the United States in 2017, according to the report.
That number could climb as the heatwaves and blizzards are expected to continue, said Chris Mooney, senior economist at the Avalere Health Group.
Insurers have historically taken advantage of their positions to maximize profits by cutting costs to keep customers happy.
But climate change is driving more people out of the health insurance industry, and more people are opting for less costly plans, he said.
The health insurers’ profits are expected grow as the cost of insurance increases.
Insurance companies have been cutting costs by charging more for the older population, lowering the premiums for those with preexisting conditions, and expanding their coverage for those living in areas with limited resources.
The study showed that the insurers’ profit margins were also expected to grow as more people became insured.
For example, in 2017 the average cost of a family policy was $2,099, according a 2017 study by the Kaiser Family Foundation.
The average cost for a family of four was $11,923.
In contrast, the average annual premium for a single policy was only $1,072.
A recent report from the U.S. Centers for Disease Control and Prevention found that insurers are offering coverage for nearly two-thirds of all Americans and that more people were getting coverage than were previously expected.
“This is not sustainable, and it is a threat to our health care system,” said JoAnn Caldwell, chief executive officer of Avalere, a research and consulting firm.
“Insurers are moving aggressively to reduce coverage, and that’s putting the lives of millions of people at risk,” she said.
“It’s time for insurers to do more to protect the health of their patients, and not only do we need them to keep their premiums low, we need us to protect our economy from them as well.”
In response to the new findings, the industry’s chief executive said the industry will continue to make investments in improving care for people and addressing climate change.
“The health insurance sector is working hard to make sure our customers have the best possible health care coverage, but we also know that we can’t expect them to always be able to afford the care they need,” said Robert Laszewski, chief operating officer of the National Association for Health Plans.
The industry is also taking action to improve the quality of care, Laszowski said.
He said that the industry has been working with the Centers for Medicare and Medicaid Services to strengthen patient safety measures, and he said the company is investing $7 billion to make its emergency room more accessible.
The insurance industry has also spent billions of tax dollars to fight the wildfires.
Insurance companies paid out more than $8 billion to help with the relief effort in 2017 and about $1.5 billion to the states to help pay for disaster recovery, according the Avalé report.
The insurers also contributed more than 3,000 employees to the response efforts, which have included offering grants, training, food and water distribution, and other help, the report found.
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