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Massachusetts Health Insurance Companies Post Massive Losses
Old 05-18-2010, 09:53 PM   #1
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Massachusetts Health Insurance Companies Post Massive Losses

I've blogged about this before and big surprise, now it's coming true. What will happen when the Massachusetts health insurance companies decide to just stop selling insurance altogether? Rate increases of 10%+ have already started to be filed for 2011 in addition to the requested 2010 increases. Given that the current rates are stuck at 2009 levels due to the state government intervention, something will have to give. What will it be?

Health insurers post losses, blame state rate caps - Daily Business Update - The Boston Globe

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The state's four biggest health insurers today posted first-quarter losses totaling more than $150 million, with three of the carriers blaming the bulk of their deficit on the Patrick administration's decision to cap rate increases for individuals and small businesses....

The companies, which contend they will lose millions of dollars because of the rate caps, are challenging the decision in administrative hearings and through a lawsuit in Suffolk Superior Court.
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Old 05-19-2010, 06:49 AM   #2
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MA has been a disaster for insurers for decades. Go ask the auto insurance companies how much fun they had over the past 30 years there. I used to be a shareholder of the largest auto insurer in MA. I watched several companies pay these guys millions in cash to take their book just so they could exit the state.

This should be no surprise whatsoever. Actually, I would ne happy to see this replicated on a national scale. Its the only thing that would force the conversation that inevitably will end with a single payor system.
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Old 05-19-2010, 09:03 AM   #3
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This should be no surprise whatsoever. Actually, I would ne happy to see this replicated on a national scale. Its the only thing that would force the conversation that inevitably will end with a single payor system.
Still have to fund the single payor system...........I don't see how the US can afford it, can you?
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Old 05-19-2010, 09:06 AM   #4
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Still have to fund the single payor system...........I don't see how the US can afford it, can you?
Other countries can afford it and have for decades, we can too.
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Old 05-19-2010, 09:21 AM   #5
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Other countries can afford it and have for decades, we can too.
You mean places like Germany and France and Canada? MUCH smaller populaces, NO illegal immigration issues putting stress on the system, etc.

Not an apples to apples comparison.........
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Old 05-19-2010, 09:23 AM   #6
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Other countries can afford it and have for decades, we can too.
No matter what people say... other countries do not have the same access to health care as we do... are you willing to wait to see a doctor

Also, other countries do not pay their medical people anywhere near what we pay... as long as ours are still so high, we will not save money...


In the UK, you can do a lot of things on your own that you can not do here... my sister is a nurse and was surprised that she could by Vicaden (SP??) over the counter... they sell narcotics... and other items we need a prescription... I believe you can buy antibiotics over the counter at different places in Europe... she said this has led to many people where antibotics don't work when they come here...


It is not just 'we need a single payor system'... because that system would look a LOT different than the one we have... IMO, it would be worse..
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Old 05-19-2010, 09:33 AM   #7
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Maybe we'll end up with a balance between record profits and massive losses:

Health Insurers Post Record Profits - ABC News
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Old 05-19-2010, 09:36 AM   #8
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Other countries can afford it and have for decades, we can too.
Once we turn an apple into an orange, maybe. I think "we" (for those of us in the U.S.) have some cultural, immigration and litigation issues to work through and we'd have to accept a more rationed model. We also need to find the appropriate way to get everyone insured without underwriting (and that is a contentious one in terms of how we get there).

The amount by which we spend more on health care than other developed nations is a lot more than just the "profit" of insurance companies and hospitals which many government/single-payer/nationalized health care advocates blame. That may be a part of it but by no means all of it.
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Old 05-19-2010, 09:37 AM   #9
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Maybe we'll end up with a balance between record profits and massive losses:

Health Insurers Post Record Profits - ABC News
Sounds like the same garbage the mainstream media writes about big oil and how they are ripping off the consumer. When oil was $15 a barrel, and BP and others were losing billions a year, that wasn't a big story.

The health insurers are raising premiums already in advance of being forced to take on all pre-existing conditions. Not a problem, our federal govt is flush with cash, I'm sure they'll be able to make it work at a profit.........
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Old 05-19-2010, 09:48 AM   #10
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Still have to fund the single payor system...........I don't see how the US can afford it, can you?
Plenty of countries have universal health care without a single payor system (eg Switzerland, Japan, Thailand). BUT, government does set caps on costs, and all health insurance companies must be non-profit.

The average person in Japan sees a doctor 3 times more often than in the US and has 4 times as many MRI's.
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Old 05-19-2010, 09:55 AM   #11
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Plenty of countries have universal health care without a single payor system (eg Switzerland, Japan, Thailand). BUT, government does set caps on costs, and all health insurance companies must be non-profit.

The average person in Japan sees a doctor 3 times more often than in the US and has 4 times as many MRI's.
And they figured out how to have that MRI cost peanuts.
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Old 05-19-2010, 10:04 AM   #12
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And they figured out how to have that MRI cost peanuts.
The government set the price at $110 - about 1/10th the price charged in the USA. Machine utilization is much higher over there, plus the manufacturers (Toshiba was the machine manufacturer shown in the footage on TV I saw) probably make their big profits selling machines in the USA.

I know that MRI utilization is much higher in the UK also. My BIL has had a brain tumor for about 7 years now and when he goes for his MRI's it is always in the evening which suits my sister as she works and he is no longer allowed to drive.
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Old 05-19-2010, 10:09 AM   #13
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... plus the manufacturers (Toshiba was the machine manufacturer shown in the footage on TV I saw) probably make their big profits selling machines in the USA.
This is the way it always is. When the U.S. caps the price of prescription drugs and medical equipment the way other nations do, all bets are off in terms of the companies that produce them. They have to make their profits somewhere.

The bottom line is that the U.S. health care system has been subsidizing the rest of the world for decades, and if we stop doing that it could cause chaos in terms of developing new drugs and manufacturing medical equipment. I do want to stop subsidizing the rest of the world at our expense, but it needs to be done carefully and with consideration of what it could do to the businesses that supply the system.
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Old 05-19-2010, 10:12 AM   #14
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This is the way it always is. When the U.S. caps the price of prescription drugs and medical equipment the way other nations do, all bets are off in terms of the companies that produce them. They have to make their profits somewhere.

The bottom line is that the U.S. health care system has been subsidizing the rest of the world for decades, and if we stop doing that it could cause chaos in terms of developing new drugs and manufacturing medical equipment.
And we go broke if we continue. What a fine kettle of fish.
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Old 05-19-2010, 10:13 AM   #15
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And we go broke if we continue. What a fine kettle of fish.
Agreed. We're pretty much damned if we do and damned if we don't in this area.
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Old 05-19-2010, 11:12 AM   #16
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Plenty of countries have universal health care without a single payor system (eg Switzerland, Japan, Thailand). BUT, government does set caps on costs, and all health insurance companies must be non-profit.
Right. I think many aspects of the Swiss and Dutch approaches have a lot of merit. Everyone has coverage, there is still competition, people can choose their insurer, folks with pre-existing conditions can get affordable coverage, etc. It's not what I would want in an ideal world, but it's probably better than socialized health care (i.e. care provided by government employees), a giant Medicare system (single payer), or the non-system patchwork mess with confused incentives and employer involvement we have today.

I'm not sure that we'd need to exclude for-profit companies--the 3-5% profit they would make in a competitive marketplace (including non-profit entities and co-ops) would be a drop in the bucket and would provide more new approaches, more competition, and needed capital. And, as far as capping costs for procedures--I don't know if we need that if we establish better price transparency, co-pays, and a more efficient marketplace for the insurance policies themselves. The advantages of getting the unwarranted third party (employers) out of the business would pay off big-time for everyone.

We may have legal/constitutional issues to overcome. If it turns out that it is unconstitutional to punish people for not purchasing a private product, maybe we need to back off the individual mandate and also the "guaranteed issue" in some cases. After all--the government doesn't (and shouldn't) get involved if a person wants to subsist on a diet of Beenie Weenies and Coca Cola, the government doesn't get involved if a person wants to smoke 4 packs of cigarettes a day, and the government doesn't get involved if a person wants to juggle chainsaws. If we set up a system whereby an individual can get basic health coverage and a catastrophic out-of-pocket annual cap of, say, 15% of their income (and maybe 5% of their net worth) and there are subsidies for the truly poor, I'm not sure why we, collectively, should be on the hook to pay any medical costs (incl emergency care) for a person who elects not to buy insurance and shoulder their own weight for their own benefit. No individual mandate but also no "guaranteed issue" if a person elects to go bare. Perhaps a considerable waiting period (24-36 months) for anyone who didn't sign up when first eligible (to prevent people from buying insurance only after the accident/diagnosis). "Society" (i.e. other taxpayers) would be doing everything reasonable to make life "more fair" (which seems to be a driving requirement), but an element of individual responsibility would be maintained. It seems like a workable compromise.
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