I get to my office this morning and start combing the health reform news and health insurance updates when I find an article from the New York Times about regulating health insurance companies premium increases and as I sit there reading it, I am amazed by how completely wrong he is about his main supposition.
His plan is to keep health insurance premiums down by regulating insurance companies through Federal officials. So in effect, the Federal Government would keep health insurance premiums low, while the state governments bailed out all the failing health insurance companies.
What am I talking about? Health insurance premiums are not rising because of greed, they are rising because medical costs are. There should be no doubt about this. All you have to do is to look at the financial statements of health insurance companies or at their profit ratios to know that they haven’t changed. In fact most states don’t legally allow them to change.
Don’t get me wrong, I am not in bed with the health insurance companies, in fact I think that a few of them need to be excessively fined from Humana to even Blue Cross. But, health care costs are rising which is raising health insurance premiums not the reverse.
Again this is not an opinion or a blog journal this is an economic fact. Health insurance premiums reflect the prics charged by doctors and hospitals. And profit ratios are legally controlled as we know from the Blue Cross of California debacle.
So what would this stupid law do? It would make state governments be handicapped in regulating insurance companies.
Most of the state insurance commissioners are all in agreement that when enforcing rate increases, the solvency and financial data needs to be considered. In other words the claims history has to dictate rate increases.
Underwriting and actuarial services are fundamentally even more complicated as benefits also control premiums. The problem with this new “idea” of the President is health care costs will still be accelerating at an unprecedented pace.
Insurance commissioners are extremely concerned that this would make many insurers insolvent which might help hold down rates but it would end up leaving insurance companies unable to pay claims!
“You are not necessarily helping the consumer if you keep rates artificially low. What’s worse for the consumer: having a premium increase or having to pay the full amount of a medical expense because the company is out of business?”
Not only that but what do you think is the central tenet in the President’s health reform bill? A Health Insurance Rate Authority. This is actually bordering on incompetent legislation. Does he really think this is the answer to health care problems?
The only reasonable answer is of course is a single payer system which would not only fix the precarious health insurance situation but would also fix Medicare, Medicaid, and the economy as a whole.
Mr. Obama has cited his proposal for a Health Insurance Rate Authority as one of the most significant elements of his plan to remake the nation’s health care system.
The facts have not stopped idiot lawmakers from ganging up on the easy prey like Blue Cross of California which even with their 39% rate increase will still have the lowest premiums in the market. This is politics as its worst.
While it is easy to agree with the President that rates are high, the real task would be to rein in costs which could be done in any number of ways. But sadly, as reprehensible as some of these health insurance companies are, they are in fact innocent of the charges being leveled to advance the political careers of mindless politicians.
The individual insurance market is notoriously volatile, and Susan E. Voss, the Iowa insurance commissioner, said she had seen some companies paying out 50 percent more in claims than they collected in premiums for some policies in that market.
