Ezra Klein at the Washington Post shows in clear terms why we need healthcare reform. Wellpoint — one of the nation’s largest insurers — would be forced to spend the money we pay them in premiums on our actual healthcare rather than their own profits if the bill is passed — from 30% of premiums spent on care to 80% without raising prices. That’s what we’re fighting for: better care at reasonable prices. That’s why the reform bill must be passed without delay. 1 out of 9 Americans is insured by Wellpoint. Or should I say “insured” since the reality is that most Americans have no idea what their insurance will actually deign to cover if they get sick under the current rules. Business as usual has gotten change — with or without bipartisan support. Nothing less than our lives are at stake.

Check it out:

“Of course, healthcare reform is a double-edged sword for Wellpoint shares. Should reform fail, Wellpoint would be a primary beneficiary.”

That comes from the first page of the Cowen Co.’s assessment (pdf) of Wellpoint stock in 2010 and beyond.

The argument is simple: Wellpoint’s business model is uncommonly concentrated in the individual and small-group markets. Those are the exact markets that health-care reform will drastically change. Those are the markets where people get rejected for preexisting conditions, where insurers spend 30 cents of every premium dollar on administration and where rate hikes are volatile and constant.

Health-care reform wants to change all of that, and if it does, Wellpoint’s business model will be changed, too.

The bill will force Wellpoint to spend at least 80 cents of every premium dollar on medical care for its customers, and it means that regulators aren’t likely to let Wellpoint jack prices up by 25 percent with no warning or reason. It also means that Wellpoint is not spending that much of premiums on medical care and is not keeping its rates under control now.

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