The Triumph of the Insurance Companies
That cry you heard when the 216th vote was cast in favor of President Obama's "healthcare reform" was the sound of insurance executives rejoicing before lighting their cigars with $1,000 bills. Just as Big Pharma was the chief beneficiary of President Bush's Medicare prescription coverage bill, so Big Insurance has Barack Obama to thank for their coming years of plenty.
And thank him they will, as well as senators and congressmen who voted for the bill. But don't worry about those who voted against it; the insurance companies won't hold any grudges. They will spread their newfound wealth throughout the halls of Congress to ensure that no future healthcare reform will undermine their privileged position.
The Republicans who opposed the bill knew that, which is why they spent all of their time talking about abortion and other side issues rather than attacking the biggest corporate welfare plan in American history. When all is said and done, this gift to the insurance companies will dwarf the bailouts of the banks and the auto industry. The Republicans wanted to make sure that they would get their cut of the cash, too.
The big losers, of course, are the businesses that face fines if they do not provide adequate health insurance to their employees (Caterpillar estimates that the legislation will cost them $100 million, which likely means that their next plant will be built in Mexico or China rather than in Illinois), and those who are self-employed or work for small businesses exempt from the requirement to provide insurance. Like the businesses, they will be fined unless they purchase health insurance.
In the worst position will be those who do not currently have health insurance because they truly cannot afford it. They will be eligible for tax credits to make their mandatory insurance more affordable, but those tax credits will be nonrefundable, so if they owe very little or nothing in taxes, the credits will do them little to no good. They still won't be able to afford health insurance, but now they will be forced to pay a fine—a minimum of $95 or one percent of their income (whichever is higher) in the first year, ratcheting up to a minimum of $695 or two percent of their income by 2014.
Come this fall, the Republicans will be able to campaign safely against the new law, and they will undoubtedly succeed in picking up a significant number of seats in the House and possibly the Senate. But they will never make any serious attempt to repeal this legislation. And by 2012, enough voters will have received tax credits so that the opposition will have died down. Those who will have been fined because they truly cannot afford insurance are among the least likely to vote anyway. President Obama, who staked his political future on this vote, is more likely now to be elected to a second term (after a campaign financed, of course, by significant donations by the insurance companies).
As awful as a single-payer national healthcare system would likely be, the United States just adopted something worse. The only consolation that those of us who oppose both Big Government and Big Insurance can look forward to is the coming consternation of those liberals who sincerely believe that Obamacare is an attack on the "criminal" and "evil" insurance companies and the first step toward a single-payer system. It won't take long for them to realize that it is, rather, a major step backward from what they truly desire.
A single-payer system could only come at the expense of the insurance companies, and they are never going to give up the great gift that Obama and his colleagues have handed them, on a silver platter lined with 40-50 million new insurance premiums. The crumbs from their table that will fall into the campaign coffers of both parties will be enough to make sure that any additional healthcare reform will never threaten to put out the insurance executives' cigars.
53 Responses »
Trackbacks
- Mark Horne » Blog Archive » So Obamacare really was another version of the proposed Clintoncare after all
- » Who’s making money on the Health Care bill? - Blogger News Network
- The Federal Observer » Stuter: Healthcare PROPOGANDA
Entries(RSS)
I have a more cynical reaction to the legislation. Most of what I see: no lifetime caps, no pre-existiong exclusions, "children" remaining until age 26, even lower Medicare/Medicade reimbursements, bringing the currently uninsured into the systen as consumers, seems designed to raise premiums even faster. When that happens it will be the excuse for the progressive's real goal, a complete government takeover. One other thing, the penalty of $2,000 for not offering insurance seems to be a yearly fee per employee. Seems like it would be much cheaper to pay that fine than the insurance costing several times that.
I tend to agree with Mr. Stanton. This legislation will drive the country to a single-payer system and the insurance companies will end up laughing first but not last.
Scott,
Thank you for clarifying this issue for me. I knew from experience that neither the democrats or republicans were capabable of standing on principle and, therefore,could not understand why it was taking so long to get this bill passed.Alas, (and I should have known) it was the insurance companies standing by their principles: "Show us the money."
I still believe the 'mandate' will be found to be unconstitutional, but not the act itself; and the Republican Party will use that as 'proof' that they did something.
The cynic in me says that it was put in there by the Democrats KNOWING it would be found as such.
I don't disagree with Mr. Stanton's assessment of what will happen to premiums, but it's a big jump from there to a government takeover (by which I assume Mr. Stanton means the single-payer system mentioned by Mr. Van Oosbree). After all, rising premiums mean more money in the system, higher profits for insurance companies, and thus more money that insurance companies can and will pump back into the halls of Congress.
Not to mention the fact that there's much more that can, and I believe will, be done in response to rising premiums—for instance, caps on the amount that insurance companies are allowed to raise premiums each year, which, in practice, will mean that everyone's premium will rise each year to meet the cap (thus ensuring greater profits for insurance companies). The government could mandate pooling of risk to lower premiums for high-risk folks, while raising them for lower-risk ones. Rise in premiums can and will be offset by increasing the allowable tax credit and, eventually, making that credit refundable.
And, at every level, the insurance companies will largely write the legislation and, thus, continue to make a profit.
Neither Mr. Stanton nor Mr. Van Oosbree explains how the government takeover will come about. What incentive will politicians receiving campaign funds from insurance companies have to create a system that will gut the insurance companies and thus deprive themselves of those campaign funds?
When was the last time that the federal government gutted an industry that was a significant contributor to political campaigns?
I think that the most important aspect of this law is not the possible "reforms" of the healthcare system, but rather is the almost immediate, and significant increases it requires in taxes and fees. The Reagan Era "reform" of Socialist Security, which was supposed to fix it until at least 2030, has failed. But, the increases in FICA taxes recommended by Bob Dull and Alan Greenscam, were a potent shot in the arm for imperial activities. This year, for the first time since that "reform" was put in place, the Socialist Security Administration bureaucrats have had to go to the Treasury to cash in some of the IOU's in the "Lock Box". This was not supposed to happen for another 20 years. Consequently, this bill is really a sort of stealth tax increase to keep the wheels on the empire for a bit longer. This past issue of Chronicles goes into considerable detail on what sort of financial crisis the West in general, and these United States, in particular are facing. We seem to have reached peak credit and peak debt, and our rulers are frantically looking under the seat cushions, and under the car seats for the money necessary to keep things stumbling along.
True, this bill was most likely written by the insurance lobbyists, and it is supposed to be to their benefit, but it is very unlikely that the money necessary to nationalize this realm of enterprise is going to be available any time soon, if ever. Increased taxes, are going to further reduce employment, and hence, tax revenues. They will also reduce spending on Chinese made essentials at Wally World, which will provide less revenues for China to recycle into U.S. Treasuries. This will only aggravate the current downward spiral in the American economy. Scott is very correct. The Republicans will never get around to repeal this law. But, as it hastens the almost inevitable governmental financial implosion, it probably will not matter much in the long run. The only really effective antidote to decades of short sighted and ignorant public financial, tax, and policy mistakes, is the program outlined by Tom Pauken and David Hartman in their recent works. The de-facto nationalization of the economy by an insolvent national government is not going to work in the long run. They simply are not going to be able to get enough money to support their efforts, however misguided.
I don't know too much about this bill (in fact, it seems that few people do) but I've been skeptical of all the Republican talking heads calling it "socialist." From what little I know of this legislation, it seems more of a kind of "crony corporate capitalism," which seems to be what Mr. Richert is alluding (unless I'm misreading his article).
This legislation appears to copy government-mandated car insurance, although not with the same justification. The rationale for mandated car insurance is the damage you could do to someone else; there isn't a comparable rationale for health insurance. This bill, from what I've read, will inevitably shift costs to policy holders - this "silver platter lined with 40-50 million new insurance premiums" - mandating a private-sector service. Hence, it appears, at least prima facie, more like a case of corporate crony capitalism than traditional socialism.
Furthermore, as Christopher Caldwell and Robert Putnam have noted, socialism has only ever "worked" in smaller homogeneous countries. America's trajectory of mass immigration and crony capitalism appears not to be toward quasi-functional socialism of 1960s Sweden, but toward a dysfunctional Brazil.
Mr. Richert is jumping to unfounded conclusions based on faulty presuppositions. I am an independent insurance agent and represent several health insurance companies. All of them were sending out emails and writing articles opposing this legislation for months. There are actually many aspects of this bill that will harm insurance companies and insurance agents and we have all been very aware of them and we have long been fighting to defeat this power grab. There are no winners here except for those who hate liberty and seek power.
"The de-facto nationalization of the economy by an insolvent national government is not going to work in the long run. They simply are not going to be able to get enough money to support their efforts, however misguided."
This seems to be the piece of the puzzle overlooked by the otherwise insightful analyisis by Antonio Gramsci in his understanding of cultural hegemony as a correction to Marx and Lenin. The state is not to be understood in the narrow sense of the government; instead, Gramsci divides it between 'political society', which is the arena of political institutions and legal constitutional control, and 'civil society', which is commonly seen as the 'private' or 'non-state' sphere, including the economy. The former is the realm of force and the latter of consent. He stresses, however, that the division is purely conceptual and that the two, in reality, often overlap.
But in the end this marriage of convenience between the public and private sectors will not matter, as the craftsmen class being finally reduced to mere consumers instead of creators, will eventually be unable to provide a sufficient tax base or --- "enough money to support their efforts,( or marriage) however misguided."
My sense is that at some point huge increases in premiums cannot be offset by the usual trickery and people will suffer the results; angry voters trump generous donors. Let's hope I'm wrong.
As much as it pains me, I have to disagree with my good friend Mr. Roberts. The Dems ended up with the insurance mandate because they couldn't pass the government option which is what they wanted. Now the reason they couldn't pass it may have more to do with insurance companies not wanting the competition than it did their constituents calling them a bunch of socialists, but either way, I think they are would-be social democrats who were forced into a sort of crony capitalism by necessity.
While I don't support it, I do think there is a rational for a health insurance mandate that is similar to the auto insurance mandate. At present we have a huge freeloader problem in health care. People know that if they show up in the ER clutching their chest they will get the same work-up as Joe Money Bags. They'll leave the hospital with an enormous bill that they will never possibly be able to pay. They'll get some nasty letter from the hospital demanding they remit 150,000 right away for their care when they live in a 20,000 single wide. Then the hospital will write it off. And the insured people pay more as a result. Medical bills don't reflect real costs. They reflect cost plus the cost of indigents. Because the medical system will always take care of you in an acute emergency, there is a disincentive for people to cover themselves in cases where they can and in many cases costs are prohibitive for them anyway. They may miss out as a result on their annual visit to their family doctor to get their Nexium renewed, but if they present with chest pain and need a catheterization they'll get it. Again, I don't support the insurance mandate, but there is a rational for it other than enriching insurance companies.
If the mandate is found unconstitutional, won't that nullify the act, with respect to some of its practical effects? (Perhaps the most important, vis-a-vis the claim of getting the uninsured insured?)
(I'm thinking of those who don't have insurance because they don't want to pay for it, not those who have been rejected by the companies.)
Health care is so expensive because of all the mandates and needless overhead. Since the government got so heavily involved, heathcare costs have skyrocketed. The waste and paperwork is horrendous. It was a lot beter when the local governments took care of the indigent and everybody else took care of them selves. Hell for the first 16 years of my life we didn't have any health plan and we we survived fine. Then we got a cheap catostrophic and paid for normal expenses. Nobody got broke with that kind of a system. Sure the elderly had problems but not this kind of fix is needed.
I was extrapolating from the experiences of other nations that have ended up with single payer systems. The costs of the proposed system will be more than the government can bear. The wealth-generating industries that allowed past governments to keep the corporate good times rolling are gone. Single payer systems make it easier for the feds to control health care costs.
I was extrapolating from the experiences of other nations that have ended up with single payer systems.
I'm unaware of any other countries that a) have adopted a plan such as this, and b) have a political campaign-finance system comparable to ours.
In the end, you may be right, Mr. Van Oosbree, but I'm basing my prediction on those specific features, which have no parallel elsewhere.
angry voters trump generous donors
Perhaps in the sense that they manage, on occasion, to boot out a well-financed elected official. But when have they managed to force elected officials to create legislation that would gut a politically influential industry?
I confess the only thing that comes to mind is stopping the Bush immigration amnesty that big business wanted badly. Of course that may yet pass under Obama.
This is an excellent, succinct recap of what the bill is about. It's amazing how many on the right seem to think this is "socialized medicine." Would that it were!
The new system, like RomneyCare in Mass, simply mandates that you acquire insurance from the big companies. In order to graduate with an MA from Boston College three years after having left the school and not stepped foot in that sainted state, I was forced to pay $385 to "comply" with the Mass Insurance Requirements because I was uninsured at the time in NY. Think about that: pure extortion with the gov. as the heavy for the benefit of the insurance companies.
You failed to mention that this bill creates 16,000 plus IRS Agents who will enforce the insurance requirements. The US will LITERALLY be using the IRS to collect money for the insurance companies. This is not socialized medicine: it's the marriage of state and corporate power. I forget what name Mussolini gave that system...
Great article Scott. Thank you.
Deacon Steve
The grotesquely obese people who shove little-debbie snack cakes into their mouths for years and then end up on dialysis are already covered. My aunt watches these gluttons actually sit there munching on bags of potato chips as they're being dialized. Do you know how much dialysis actually costs? A fortune.
A great analysis. We can be sure of at least one thing---the real costs will be taken from the hides of the unorganised working and middle classes and our posterity.
Scott,
One question? Will most of the insurance policies that folks are required to purchase include paying for abortions or is this something each individual will negoatiate for in their premiums --- for example, with abortion coverage $765.00 a month, without that coverage $764.75 type of thing?(Surely human life is still worth a quarter to some of these folks) I have heard that Planned Parenthood has been in difficult financial condition the last few years so I supsect this bill was designed at least in part to help shore them up a little without Republicans and Catholic Democrats having to admit anything publicly. Do you have any insight about this? I noticed the little remnant of religious sisters we still have left in this country were in support of it ---- these poor souls have now lost everything -- their habits, their sacred silence and liturgical life and now their minds. A sad thing --- all of it.
#22 Dr. Wilson
"We can be sure of at least one thing—the real costs will be taken from the hides of the unorganised working and middle classes and our posterity."
I would only add the words dwindling or suffocating to " unorganised working and middle classes" and their posterity.
It's strange that most self-styled conservatives are criticizing the health care bill for offending liberty. That's like telling a young married couple that the whole point of getting married is to prevent loneliness--it's clueless. Liberty is for the sake of human flourishing, and is not a freestanding good. The proponents of nationalized health care clearly believe it promotes human flourishing. The argument against them therefore can't be based on liberty. It can, however, be based on federalism or the principle of subsidiarity. The fact that self-styled conservatives are attacking it on the basis of liberty is a sign of the profound incoherence of contemporary conservtism.
Mr. Stanton, I had thought of the immigration amnesty, too, but the situation was a little different. We had a more nebulous "big business" in favor of that; here, we have an organized industry which already has its own PACs and an established history of political donations to support legislation for its own benefit.
Sebastian, I haven't seen what I regard as a reliable source for the number of new IRS agents. I'd appreciate references so that I can use them in future articles. I agree, though, with the point of your comment.
KDZ @25
I agree with you. The author of Mein Kampf had it entirely upside down when he wrote,"National Socialism must claim the right to impose its principles( whatever they are --freedom, property, pursuit of health care, civil rights, endless little wars,etc.) on the whole German nation,without regard to what were hitherto the confines of federal states."
Don't we live in a time when anything that needs doing must be done at the "Federal Level"? Doesn't this argument go back to the War between the States, when state's rights were eliminated once and for all --- or am I wrong?
Mr Richert, today on Lew Rockwell Ron Paul has a article that states that there would be a need for 16,500 new IRS agents.
They did it with auto insurance - why not healthcare?
Mr. Richert's analysis does not go far enough out into the future. Right now the insurance companies would appear to be doing very well out of this bill; lots of new potential clients and their premiums and all that. This view, however, is very short-sighted and does not take into account all the provisions of the new law.
Consider what the bill does to mandated benefits. Preventive treatments are supposed to be provided free: everything from annual physicals to colonoscopies. Some of those treatments will be very expensive indeed. The removal of the lifetime limit on benefits will prove very expensive as the population ages.
The ban on exclusion for pre-existing conditions will saddle companies with lots of very expensive clients.
One of the more little-known provisions of the bill that will do tremendous damage is the requirement that companies devote 85 percent of their premiums to pay claims, up from the current requirement of 60 % or so. Given that most provinces require such companies to keep sizable cash reserves, along with the requirements of paying staff and other basic business issues, it is very difficult to see how these companies will be able to stay profitable---and insurance companies are generally not known (outside the ultra-left press) for being particularly profitable to start with. Indeed, a recent NYTimes article reported that, according to several provincial insurance commissioners, this bill would threaten the solvency of a great many currently-functioning firms.
Probably the biggest tipoff that this bill is not what it seems is the proposed penalty for violating the "individual mandate" rule. The fines are supposed to be set at a maximum of 1-2 percent of income when the law is fully in effect. For a family with an income of % 50,000, that is only a fine of $ 500. Per year. Most health-insurance premiums are twice that amount for a month. The penalty has no teeth, and it was deliberately designed that way. The lightness of the penalty will mean that no one will buy insurance until they are sick; they will pocket the premiums they would otherwise have to pay. (No doubt they will set aside this money to pay for the value-added taxes that are coming just around the corner.) This further reduces the firms' potential profitability. More firms will simply get out of the business, leaving the State as the primary source of health insurance.
The supply of doctors will diminish as well. With the central government effectively acquiring the ability to fix medical fees, a great many physicians will simply not be able to afford to stay in practice; this will be especially true for sole practitioners. Indeed, several surveys note that perhaps as many as 30 percent of doctors will be forced to retire in the next few years, many as a result of this. There are no plans I am aware of to open new medical schools or expand medical training, so this will lead to a doctor shortage, longer waits for appointments and a greater reliance on lesser-skilled providers. No doubt there will be a push made to import "barefood doctors" from Red China and Cuba sometime in Obama's next term.
What this bill does, at the last, is to fundamentally prevent insurance companies from operating as insurance companies. Insurance firms operate by being able to assess for and provide against risk, as well as finance the consequences of risk when it happens. Without the ability to exclude the costly, expenses cannot be held down. Without a real ability to get new revenue, profits are impossible, and doors will close. The only "firm" left standing in the business will be the government.
This bill simply nationalizes the health care system at a more leisurely pace than first feared; a classic case of Fabian gradualism.
This wasn't just a government bomb---this bill was the economic equivalent of the explosion of a strategic nuke. A financial EMP, so to speak.
Mr. Schaeber:
I find your analysis to be incomplete.
There are two fundamental problems with healthcare in this country:
A. Cost of care
B. Access to care
B is becoming more prevalent as A continues to rise.
This bill does not do enough to cut costs. Thus premiums will continue to rise. This is why the defacto monopolies you call "private" insurance companies will not fail, and this is why the government will not take over healthcare , at least not under this current legislation. Well, the fact that the insurance companies can shift pretty much all their costs onto the government and premium holders is the reason they won't be fail. The reason they won't be taken over is that they practically own congress and both political parties.
I also like your little whine here "..Without the ability to exclude the costly.."
Why should people in the business of insurance be allowed to refuse to insure the "costly", any more than someone in the practice of medicine is allowed to refuse to treat the ill?
You choose your pool or applicants wide enough and you set your premuiums high enough and then you get to work insuring people. Since this bill will hand the insurance companies anywhere from 10 to 20 million mostly healthy consumers one would think it would be easier on them not harder.
Scott,
Re: 16,000 new IRA agents. The report comes from Joint Economic Committee and the House Ways & Means Committee. There's an article on it at Lew Rockwell's site http://www.lewrockwell.com/grigg/grigg-w137.html and at Canada Free Press http://canadafreepress.com/index.php/article/21228. Also, as the above commenter said, Ron Paul gave the figure, likely based on the House estimate.
Thanks, S
Very good analysis on Scott Richert's part. So an overburdened federal government takes on more stress adding to unfunded entitlements and an empire. When does the system buckle? Do conservatives have any reason to keep the system from collapsing?
Robert, regarding abortion, the problem is actually the opposite. While it appears no one is likely to be required to purchase abortion coverage, she will be able to purchase it separately. But since money if fungible, if she gets a tax credit for the main part of the plan but not the abortion rider, the federal government is still in a sense subsidizing abortion coverage.
As for the nuns who supported this, that was a slick little piece of propaganda. Fewer than 60 signed the letter in support, but they tried to claim that they represented all nuns left in the United States. In fact, most of the nuns, it was later revealed, supported the bishops.
Thank you, Rick and Sebastian, for the references.
Mr. Schaeber has obviously never heard of economies of scale. You can decrease the profit margin if you increase the insured base enough. And for now, at least, there are no limits on premiums.
B Prentice, I have no doubt that, in the short run, this legislation will bring about a round of consolidation in the insurance industry, which will hurt independent insurance agents and small insurers. But the big companies will be making lemonade.
How will the govt find these people to fine them?
I can't even begin to answer someone who apparently believes that the only way government knows who you are is if you register to vote.
As for who will be hurt by this legislation, I never said that the affluent won't pay more in taxes. I said that businesses that are forced to purchase insurance and those private individuals who truly cannot afford insurance will be worst off—two points that seem self-evident.
I wish that we could go back to the world that Mr. Marino remembers. Here in the Midwest, both healthcare and welfare were once handled quite well by township and county authorities. We can still see remnants of those old systems today, in the community hospitals (funded in part by property taxes) that continue to exist in parts of the Midwest.
Unfortunately, however, every part of the medical system has been affected by rising costs—many of them driven, as Mr. Marino notes, by government action, but also by "consumer" demands and a fascination with technology. And that means that even if one wished to take his own family off the healthcare grid, so to speak, he has to hope that no one in his family ever needs significant medical care.
#38
Scott,
Thank you for the clarification. You see this is what happens when one loses confidence for even a moment. I made the mistake of listening to part of the debate on television with Chris Mathews. He said that his aunt had spent her entire life as a teaching Nun and he was so proud of all of these religious orders (95%) who had given so much of themselves to America to now come out and support this health care bill. He was the former Chief of Staff for Tip O'Neal, the designated Catholic voice of MSNBC to cover big Vatican events and is from one of those big Irish families in Pennsylvania. I simply forgot he was also a liar and had lied about such things numerous times before. I should have never listened to the stupid debate in the first place when I could have taken a long walk in the rain as a substitue.
Coincidentally, I happened to hear an interview with a health insurance company executive yesterday (Sigma Health, I believe). He was pleased with the current bill but warned that cost containment would become a problem. He cited the case of Massachusetts' health care reform (their system is approaching insolvency 2-3 years after implementation). He thought in 2-3 years more legislation at the federal level would be needed to address the problem.
#30
robert,
Well, states' rights--or federalism in the (strong) sense of confederation--was indeed settled by the Civil War. Federalism in the weaker sense of being guided by the principle of subsidiarity is far from dead. I don't know enough about health care to say what that would mean in practice, but I am sure the liberal-sponsored bill is too centralized. So, do I agree that it's a threat to liberty? Yes and no. Yes in the sense that centralized decrees generally (invariably?) warp liberty, but no in the sense that even the paternalistic insurance mandate might, in theory, enhance individual well-being and human flourishing. (Unlike libertarians, I have no problem with paternalism in principle.)
I don't know enough about the health care bill to say whether it is a justifiable kind of paternalism (wrt the insurance mandate), but given who is backing the bill, I strongly suspect it is not justifiable. This matter has to be argued, though; it can't be question-begged by bald claims that "liberty" is undermined by the health care bill.
The insurance companies are more likely to willingly infringe federalism than individual liberty. One reason is that federalism, unlike individual liberty, has a way of cutting into corporate profits. Centralizers and Big Business do not fear individual liberty, but they do worry about too much federalism--not on principle, but out of greed. This goes back to the Civil War and the aftermath of that civic as well as military bloodbath.
KDZ,
Thank you for the good response. The following are my thoughts as well."Yes in the sense that centralized decrees generally (invariably?) warp liberty, but no in the sense that even the paternalistic insurance mandate might, in theory, enhance individual well-being and human flourishing." I tend to be suspicious of anything coming from HQ these days because I believe they are totally estranged and alienated from any notion of the common good that is not represented by a lobby nearby. In other words, I think they have lost touch with whatever real goodness remains in the culture they supposedly represent. Change for the sake of change is not necessarily moving forward or backward on a given road, it sometimes invloves taking a different road entirely. I am not sure the invividual can ever flourish in a purely secular order. In fact I am more confident he cannot. Perhaps the flood of new immigrants will turn the tide or perhaps there are still ten good men elected to congress. My hope is not in our future but in our past.
#33 - Mark Schaeber says in regard to the requirement that insurance companies will have to pay out 85% of premium revenue in benefits, up from the current requirement of 60 % or so: "it is very difficult to see how these companies will be able to stay profitable."
The evidence that health insurance companies will not be hurt by setting benefit payments at 85% is that they are already paying out more than that. And the industry itself says so.
In a December 21, 2009 article, Julie Appleby of Kaiser Health News reports: "Insurers now spend an average of 87 cents of every premium dollar on direct medical care, says the industry's trade lobby, America's Health Insurance Plans. Other estimates, including some from Wall Street analysts, put the average in the low 80s."
She also writes that in some states the required payout is upwards of 80%. She cites Maine, where it is 78%.
No health insurance company is going out of business over this change.
@44 Robert,
And the cold rain would have left you feeling fresh and clean, instead of dirty and used, as one does after listening to politicians.
As a follow-up to my earlier post -- do you know the insurance companies call the percentage of premium dollars paid out in policyholder benefits ... in other words, providing the very service that you and I pay for?
They call it the "medical LOSS ratio."
That should tell you all you need to know.
I am off paperwork, so i'll claim if i am asked, that i don't have the money (I work under-the-table.) I am really not interested in participating, and i am concidering religious grounds... Can we all say that we are of the 'civil religion' and be done with it? At my local County Clinic you could of went in for dental care, and claimed you were self-employed and pay 80$ for the whole thing. Or, you could claim your homeless, and jobless and get it done at further tax payer expense.
This is late in this thread but new info (at least for me) has surfaced. It turns out (based on the report addressed below) that the coverage mandate is voluntary. No enforcement. Anybody else have conflicting info? I'll leave it to better prognosticators than I to figure out how this will affect things. To me it says the health insurance companies are dead.
http://biggovernment.com/mrichmond/2010/03/26/joint-committee-on-taxation-confirms-that-obamacare-does-not-enforce-individual-mandate/
Scot: I tried to get through to you at your Catholic blog but I don't seem to have suceeded. I grew up next door to St. John's School for the Deaf. I played with the kids and know the story quite well. Father Thomas Brundage JLC the Cannonical judge in the Murphy case has writen a full summary of the case. He is quoted often by the New York Times and the AP from documents. He was never contacted for an interview. His whole account is quite revealing of the bias of these publications. It is a must read for those intrested in this case.
It is called. ' Setting the record straight in the case of the abusive priest Father Lawrence Murphy. ' It was published in the CatholicAnchor.org. Fr. Brundage can be reached at @archmil.org or by phone at [ 907 ] 745-3229 x11.