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While we wait . . . (an Open Thread)

You might have heard about Anthem Blue Cross’s planned 39% health insurance rate increase for some policy holders. We should probably breath a sigh of relief that the plan is (possibly permanently) postponed but, Ezra Klein might have a point::

The Anthem Blue Cross saga appears to have a happy ending: After criticism from the administration, the insurer has delayed the planned 40 percent rate hike. That will give the company time to reevaluate whether it’s worth the blow-back, and I’d guess there’s a good chance it never takes effect at all.

But if this is a good outcome, it’s a not a good policy. The insured can’t depend on someone in the White House’s communications shop noticing when an insurer tries to screw its customers.

And Ezra goes on to point out the wonderful ways both the Senate and House bills will (eventually) keep future threats from happening. Right.

A friend of mine says, this situation is likely to be a feature not a bug:

Top Five Health Insurers Posted 56 Percent Profit Gains in 2009

If no health care overhaul passes Congress, health insurers may be in for a windfall — and one far larger that most Americans probably realize.

According to a study by a pro-health reform group published Thursday, the nation’s largest five health insurance companies posted a 56 percent gain in 2009 profits over 2008. The insurers including Wellpoint, UnitedHealth, Cigna, Aetna and Humana, which cover the majority of Americans with insurance.

The insurers’ hefty profit gains came even as 2.7 million more Americans lost their insurance coverage due to the declining economy.

At the end of his post Ezra claims that:

In this case, Anthem has an insurance plan with sicker people that is not proving profitable. They’re increasing the costs to either drive those people out or force them to pay a lot more.

But, according to the Alternet Story,

Wellpoint’s Anthem Blue Cross California created a stir earlier this week by announcing that it will raise premiums on individuals by 39 percent in 2010.

(snip)

Yet, the company posted a profit of $4.7 billion for the year. That put it at a higher profit margin (7.3 percent) than any of the other top five American insurers.

Who knows how this is going to end for us — any predictions based on press releases out of the White House or the Capitol are probably as valid as reading tea leaves.

But, it’s painfully obvious that while WE wait, a lot of people are making a lot of money.

. . . What else are you waiting for?

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59 Responses

  1. But, it’s painfully obvious that while WE wait, a lot of people are making a lot of money

    Cuz if we die, they don’t have to pay anything.

    • I should have asked a question!!

      But (if we die), they’ll lose that income stream — don’t they? How many customers can they afford to lose?

      • Lots of them, if they’re “unprofitable.”

      • the newer, younger ones have are a better income stream

      • In the world of insurance, the best “customers” are the ones that don’t go to the doctor much. Sick ones dying quicker is way more profitable than having to pay claims for long term, chronic illness where the benefits paid out exceed the premium brought in.

        Kind of like people who don’t wreck cars are great customers for auto insurers. They pay premiums but don’t make any claims.

        Hazard insurers make money off investments of premium in reserves then later using some of that for paying claims. They also have special insurance called reinsurance to have a stop-loss in place if there is a disaster or a certain large payout threshold is reached. I don’t know for if health insurers do the same sort of thing – but I’d think they would.

        • Yes, health insurers do exactly that. Actuarially, if a population group is big enough, they can pretty well figure out what the claims expense will be over a given period. And they can figure at least a 3 month lag time between an expense incurred and a claim submitted for payment. So they make their money mainly via investment — the old time value of money thing. The money they charge for admin expenses, commission payments etc is all just middle-man stuff. The real profit they get is via Wall Street. (Which means of course that Wall Street, too, profits off the money pooled for claims and invested. Commissions everywhere you look.)

          And yes, reinsurance to stop loss any catastrophic event that sends their actuarial projections all to hell.

        • Medical (and probably other types of ) malpractice insurers do this as well. Which is why premiums for those policies do not decline when state legislatures pass “tort reform” — because the hefty annual increases in premiums are not only caused by paying court awards or settlements, but are also related to whether the insurer’s investments have gone up or down in the previous year.

  2. The Republicans have been so good at brainwashing enough of the American voters to obstruct any constructive changes in our society that I have lost hope for a better tomorrow. Why is it so hard to see the harmful long term consequences of a health insurance industry that is allowed to cherry pick their clients and make record profits while so many struggle to get basic health care or are bankrupted because of bad health???

  3. OT: Dakini, are you ready for tomorrow?

    • as ready as I always am … I’m waiting for kids coming home from Orpheus right now. It’s not quite as crazy as when I actually lived in the French Quarter and had to work at the FED doing the auction with my office overlooking REX and ZULU.

      • I think it would be really exciting to be in NOLA for Mardi Gras (said the lifelong New Yawkah (before the exile to CT) who never went to see the ball drop in Times Square!)

        • yeah, I really loved my first Mardi Gras after Katrina. I went to Endymion and it was the best ever. I’ll probably go walk across St. Claude and look for the Indians. I also like to chase down the skeletons. I’m more into the neighborhood celebrations now.

  4. The stink will blow over and they will raise rates. It was 2007 or 08 that Anthem Blue sent close to a billion in profits out of state to the Wellpoint home company. That cause faux outrage among politicians but that blew over.

    The Insurance Industry sucks ~$400 billion a year away from the delivery of health care. Until the American public gets away from “don’t want the gubmint in my Medicare” or “socialized medicine..blah..blah…and deals with getting insurance out of health care, then it’s hopeless.

  5. Why the heck can’t we all have the health insurance that our Congress critters have? Why do the Democrats have to be spineless and the Republicans heartless? (Or am I oversimplifying things again?)

    • The reason is they can’t get the funds they need to get re-elected. It costs every one’s arm and legs for them to campaign these days so they sell out to stay in power.

      • They could work together and screw over industries in a round-robin fashion. One year, screw health insurance and only take money from oil, ag, banksters, etc. Then pick a new industry to screw the following cycle. The people would at least get something each cycle. Seems like the last few cycles, we the people have been taking it from all sides.

    • You can. Members of Congress get their health insurance through the Federal Employees Health Benefits Program. This is basically an insurance exchange that offers ~ 300 private insurance options to approximately 8 million Federal employees. The difference is that the Govt pays 70-75% of the premium. This was typical for many employer/union based programs.

      The difference is pure economics. A member of congress get paid ~$174k/year. So the impact of paying 25% of the insurance premium isn’t huge as opposed to a person trying to pay a $1,300 monthly premium on a family income of say $60,000.

      That ‘s is one reason why the “gives us the same as congress” was a false choice and was a distraction from what was really important. Once “same as congress”, “you can keep your insurance” and “single payer is off the table” were the guide lines, the Health Care war was lost.

      • I say they take a pledge to refuse coverage and buy it out in the open market until they Reform Health care. Especially those seeking re-election.

        I have had it with these folks, being covered while we wonder how we are going to pay the Shark Insurance companies and not being able to afford coverage and worrying about facing bankruptcy if we get sick if we lose coverage or if we get sick.

  6. I think we’ll be waiting a LOOONG time… 😦

    • I hope not. Perhaps when the economy fails to recover and people start losing more they’ll wake up and realize that it’s not a bad thing to to let your government insure you because it’s the right thing to do rather than a company do it to increase their stock returns and bonuses.

      • I don’t know what’s going to convince those guys that they’ve got to do something if what we’ve been going through & what we ARE going through THEN I don’t know what it’s going to take.

        I’m actually shocked at the Democratic Party.

  7. OT: Wapo’ and RCP tweets that Mikulski is not retiring…

    RT @TheFix: Rumors that Sen. Barbara Mikulski (D-Md.) is retiring are NOT TRUE, according to informed D source.

    RT @mikememoli About that Mikulski retirement rumor: two sources saying it’s not true.

  8. I spent the other day with my family, all staunch Republicans. My Mom asks, Do you really want the government controlling health care? Seriously.

    I told her I didn’t think they could do worse than the corporations. And if she thought so little of government, why was she willing to let them own all the bombs and missiles?

  9. I’m toddling off to bed folks — don’t forget to put the dishes in the sink when you’re done!

  10. I should go to bed too. Happy President’s Day to all. Happy Mardi Gras to all. (Hopefully I’ll see you before Ash Wednesday and wish you a happy one of those, though I really think it’s a Holiday one observes rather than celebrates…)

  11. We’re on our own folks. Our children’s lives have 0 chance of being better than ours — only worse.

    • Crap, SoD That sucks …. I guess the punch line is that while we wait our children are losing coverage.

    • That makes me angry, and Nancy Pelosi is just not leading. Why aren’t they doing some thing and why are they letting President Obama kill the Public Option?

      Don’t they see the damage they are doing to working families, maybe if they lost their coverage they would see the damage. My brother was denied insurance because he was 15 pounds over the BMI for his age, but the crux was that they wanted to deny his dependents coverage and were trying to find a way to do it.

  12. I do not think that Anthem was really planning to raise it 40% – it was planned with the White House so they could then step in and show how “forceful” Obama is and make a case for why we need his “Obama nightmare” plan. Yeah right.

    Obama has all these closed door meeting with all the H/C providers and we are all being played. Don’t fall for it – vote all the bums out.

  13. It’s no wonder Boxer is in trouble with the 39% raise and others choosing not to run. The people want to blame someone, and Pelosi keeps the heat away from POTUS and the people are blaming someone. By President Obama removing the Public Option off the table he has created aggressive insurance companies that are doing what they do best with impunity…profits before health.

    In this economy, my insurance rates went up and I suspect they will again in July and Health Insurance reform…its dead. Why have a 60 majority, why have control of congress when he was acting as the leader of the GOP and asking them what they wanted? Gee, Bush II said this is what I am doing and did it, I don’t recall him coming to hug the Dems.

    (((shaking head))) I don’t think anyone really will care until congress lose their insurance and have to go out and get some coverage.

    Boxer: Many Women Are On Alan Grayson’s Plan (“Don’t Get Sick”)

  14. Boxer: Many Women Are On Alan Grayson’s Plan (“Don’t Get Sick”)

  15. The majority of Americans support the public option.
    Hi, I’m Dr. Raphael Pristoop. 45,000 Americans die each year from lack of health insurance. Over half a million doctors support health care reform. The majority of doctors support the public option. The majority of Americans support the public option. Quality affordable health care should be available to all American. Tell your congressional representatives that we need health care reform with a public option NOW.

    • Medicare for All…with a robust private option.

      That’s what we need, not this corporatist’s wet dream from Obama and Baucus.

      Single payer, everybody in, nobody out.

  16. Independence Blue Cross of Philly, per commenter at Suburban Guerilla, just notified her of 39% rate increase. Another commenter said his increase was close to 50%.

    So, this is not just a one off.

    Wellpoint owns many of the formerly independent Blues (from Commenter Helen Northmore at wnyc.org’s Brian Lehrer Show):

    Your caller reported an increase in rates by Blue Cross in this area. Below is the Wellpoint/Anthem/Blue Cross connection here in the NYC area as well as an illustration consolidation among the big health insurers.

    Wellpoint reports it covers one in nine in America. The big five health insurers, Wellpoint, United HealthGroup, Aetna, Cigna, and Humana currenlty cover one-third of all insured, therefore less competition.

    WELLPOINT is Unicare throughout the country. Wellpoint is Tonik Health. Health Networks Inc. became a part of Anthem, Inc. on November 30, 2004, and Anthem, Inc. changed its name to WellPoint, Inc. Subsequently, on December 28, 2005, WellChoice, Inc. became a part of WellPoint, Inc. Anthem Health Plans: California Blue Cross and Blue Shield, Colorado Blue Cross and Blue Shield, Connecticut Blue Cross and Blue Shield, Georgia Blue Cross and Blue Shield, Indiana Blue Cross and Blue Shield, Kentucky Blue Cross and Blue Shield, Maine Blue Cross and Blue Shield, Missouri Blue Cross and Blue Shield (excluding 30 counties in the Kansas City Area), Nevada Blue Cross and Blue Cross Blue Shield, New Hampshire Blue Cross and Blue Cross Blue Shield, New York (as Blue Cross/Blue Shield licensee in 10 NYC and surrounding counties and as the Blue Cross or the Blue Shield licensee in selected upstate counties only, Ohio Blue Cross and Ohio Blue Cross/Blue Shield, Virginia Blue Cross and Virginia Blue Cross/Blue Shield (excluding the Northern Virginia suburbs of Washington, D.C), Wisconsin Blue Cross and Wisconsin Blue Cross/Blue Shield.

    Link for above info

    An ex-exec from Wellpoint is reported to have helped write the Senate Health Bil, so perhaps there is a sense of betrayal in Washington?

    Link for item at PHNP.org

    Medicare for All…with a robust private option.

    Private insurers can play, but only under very tight regulation.

    We can’t afford these insurance parasites–and Corporatist Obama knows that, but he can’t resist the lure of the big money post-presidency from these large corporations.

    My rates will go up on April 1, but my Big Insurance Parasite has not yet sent any notice of change. They tend to send them out later the higher they are. Provides less time for the insured to look around. (As if I have any choice!)

  17. http://voices.washingtonpost.com/ezra-klein/2010/02/all_you_ever_wanted_to_know_ab_1.html

    All you ever wanted to know about the research on health insurance and health — and more

    The IOM observed that insurance especially matters for adults with chronic illness, who comprise 40 percent of the uninsured: “health insurance is clearly most beneficial for adults who need medical attention, particularly for adults with common chronic conditions or acute conditions for which effective treatments are available.” Both IOM reports cited abundant research finding that the uninsured with chronic health problems receive later diagnoses and less care, so a lack of insurance coverage substantially increases mortality rates among cancer patients, heart disease patients, older adults, and hospitalized patients in general.

  18. I saw a story in the ABJ Journal a couple of days ago that health insurers had a 56% rise in profits over the last year….

    Shit…

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