The NY Times article on Sunday is getting some comment.
http://www.commondreams.org/view/2009/09/08-9
False accusations of plans for government "death panels" was ironic enough, given that private insurance companies have long entrenched real death panels deep within their profit-driven bureaucracy. One woman from Tennessee told a frightening story of how a hospital wouldn't give her husband a CAT scan because the hospital had cut a deal to not use the machine too often, which would cost the insurance company too much money. The financial interest of the insurance company was to provide less care to make more profit.
Now come "death bonds" to take things one step further. Having already ruined the mortgage market and plunged more families into foreclosure than ever before, Wall Street needs a new way to make money. And profiting off the sick and elderly has worked so well for insurance companies, why not expand the sector?
People with frail health who have life insurance have the option of selling their policies before they die for a lesser amount than the full value. Say you have $500,000 in life insurance. Depending on your life expectancy at the time you sell your policy, you might be able to sell it for, say, $250,000 in cash. Whoever bought it is taking a gamble. According to the New York Times:...The earlier the policyholder dies, the bigger the return -- though if people live longer than expected, investors could get poor returns or even lose money.
Now Wall Street's latest scam is to bundle life insurance policies purchased from the sick and the elderly into securitized death bonds and funds. The earlier the group of policyholders die, the bigger the return.
Insurance companies already had a financial incentive to deny care and increase profits. Now Wall Street banks are adding another incentive -- the sooner people die, the sooner death bond prices rise. And since it's really the same super-rich investors benefiting from both enterprises, the grand conclusion is simple -- poor health is good for profits. If the opponents of health care reform have their way, the quality of our health care will only get worse.