Thursday, July 30, 2009
Why Health Insurance Does Not Serve the Public Interest - Assurant Health 2nd Quarter Financial Report 2009
Although I was not able to join the conference call early this a.m., I have read Assurant's 2009 2nd Quarter Financial Report just released today, and I am flabbergasted. There can be no doubt as to why my health insurance rates, and I am certain those of many other Alaskans, were jacked an astonishing twenty-one percent this quarter. Not surprisingly, it has very little to do with the actual cost of band-aids, doctor's fees, x-rays, blood samples or the hourly rate for nurses. As with AETNA, Assurant's rates hikes are about absorbing losses from the other companies operating under the umbrella of its parent organization who uses the profits from our premiums, paid in sweat, lost time with our children, and the ceaseless financial balancing act performed day in and day out by millions of Americans lucky enough to even have health insurance, to pay off the debts from their bad business investments.
For instance, read this bold statement provided in the report by Assurant to explain their loss to shareholders, then try to swallow the bile that rises in your throat.
"Net operating income1 for the second quarter 2009 decreased 47 percent to $99.3 million, or $0.84 per diluted share, compared to second quarter 2008 net operating income of $185.8 million, or $1.55 per diluted share. The decrease was primarily driven by losses at Assurant Health and reduced earnings at Assurant Specialty Property. The results for the quarter also reflect $6.4 million after-tax of restructuring charges."
"We are taking decisive actions throughout Assurant to improve performance, reduce expenses, enhance revenues and best position the company for the long term," says Robert B. Pollock, president and CEO. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."
"The good news is that even in a challenging economy our financial position remains strong. We've grown our book value per share and for the six month period achieved double-digit annualized operating return on equity ("ROE") 2 of 10.5 percent. Our disciplined investment and capital management strategies have positioned us to take advantage of investment opportunities when the time is right." ," says Robert B. Pollock, president and CEO. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."
How does one imagine what "decisive" actions will Assurant will need to take to "improve performance, reduce expenses, enhance revenues and best position the company for the long term..."? I highly suspect it will involve denying a claim or two. Or perhaps all that will be needed to reduce expenses is to hold off on a dozen or so bone marrow transplants. Whatever it takes to keep those profit margins intact is what they will do.
Yesterday, I pasted the link to Assurant's Specialty Property web site. I learned about this segment of Assurant a week ago. My gut told me then that it would play a vital role in Assurant's decision to hike my rates. It did, and I am so very, very angry. Even after the collapse of the housing market over a year ago, one would have thought that no company in its right mind would venture into troubled industry of mortgage insurance, but incredibly Assurant did. Now I and countless other paying clients must do our part to lighten the burden on the company so that shareholders, the CEO, CFO and any other Tom, Dick and Harriet suckling on the teats of this "financial entity" can get their fare share.
Assurant provided a cautionary statement, but chose to call it the "Safe Harbor Statement." In it they, like AETNA,lament the threat of increased competition and the introduction of government regulation. I suppose either title is an improvements over the once tried and true "Cover Your Butt" statement. Amazingly Assurant's Safe Harbor statement is eerily similar to AETNA's Cautionary statement, as is the GAAP statement that follows. It was a very good idea for them to have the law firm that draws up such documents change at least a few of the key terms so that the public wouldn't accuse Health Insurance providers of collusion.
Yes, these companies have committed collusion. They collude to send their lobbyist to our Capital. They collude to spend a portion of our precious premiums to pay for those lobbyist, and they collude to keep their paying customers as much in the dark as possible. Why should we question how our premiums are being spent? They collude to stave off competition, and to bring to a grinding halt any legislative efforts to improve health care for America.
Here is the link to the report for those who still doubt what your health insurance premiums mean to the "for profit" health insurance industry.
http://ir.assurant.com/pressroom/releaseDetail.cfm?ReleaseID=399840.0
Finally, I leave you with another quote from the Assurant financial report. If I wanted to play the stock market, I would have done so. Maybe if I had, I might have earned a better return on my "involuntary" investment.
"Assurant Solutions
Assurant Solutions second quarter 2009 net operating income was $27.9 million, a 14 percent decrease from second quarter 2008 net operating income of $32.4 million. Net operating income for the six months of 2009 was $58.2 million, down 27 percent from $79.9 million for the first six months of 2008. For both the quarter and six months, the decline was primarily the result of unfavorable credit insurance loss experience in the United Kingdom, which increased the combined ratio, as well as lower net investment income. The domestic combined ratio continued to improve sequentially and on a quarterly basis. Results for the second quarter 2009 include a $2.4 million restructuring charge, and results for the six months of 2008 include $6.9 million of losses from Brazilian operations and $11.7 million of income from a client related settlement.
Assurant Solutions second quarter 2009 net earned premiums decreased 5 percent to $666.9 million, from $700.6 million in the second quarter 2008. Net earned premiums for the first six months of 2009 decreased 5 percent to $1.3 billion. The decrease for the quarter and the six months was primarily driven by the application of Statement of Financial Accounting Standards 97 ("FASB 97") for pre-need insurance contracts sold in 2009 and the unfavorable impact of foreign exchange. Absent the application of FASB 97 and the impact of foreign exchange, net earned premiums would have increased $36.0 million, or 5.1 percent, for the second quarter of 2009."
For instance, read this bold statement provided in the report by Assurant to explain their loss to shareholders, then try to swallow the bile that rises in your throat.
"Net operating income1 for the second quarter 2009 decreased 47 percent to $99.3 million, or $0.84 per diluted share, compared to second quarter 2008 net operating income of $185.8 million, or $1.55 per diluted share. The decrease was primarily driven by losses at Assurant Health and reduced earnings at Assurant Specialty Property. The results for the quarter also reflect $6.4 million after-tax of restructuring charges."
"We are taking decisive actions throughout Assurant to improve performance, reduce expenses, enhance revenues and best position the company for the long term," says Robert B. Pollock, president and CEO. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."
"The good news is that even in a challenging economy our financial position remains strong. We've grown our book value per share and for the six month period achieved double-digit annualized operating return on equity ("ROE") 2 of 10.5 percent. Our disciplined investment and capital management strategies have positioned us to take advantage of investment opportunities when the time is right." ," says Robert B. Pollock, president and CEO. "Clearly, we are disappointed with the operating results at Assurant Health and are taking steps to correct the situation."
How does one imagine what "decisive" actions will Assurant will need to take to "improve performance, reduce expenses, enhance revenues and best position the company for the long term..."? I highly suspect it will involve denying a claim or two. Or perhaps all that will be needed to reduce expenses is to hold off on a dozen or so bone marrow transplants. Whatever it takes to keep those profit margins intact is what they will do.
Yesterday, I pasted the link to Assurant's Specialty Property web site. I learned about this segment of Assurant a week ago. My gut told me then that it would play a vital role in Assurant's decision to hike my rates. It did, and I am so very, very angry. Even after the collapse of the housing market over a year ago, one would have thought that no company in its right mind would venture into troubled industry of mortgage insurance, but incredibly Assurant did. Now I and countless other paying clients must do our part to lighten the burden on the company so that shareholders, the CEO, CFO and any other Tom, Dick and Harriet suckling on the teats of this "financial entity" can get their fare share.
Assurant provided a cautionary statement, but chose to call it the "Safe Harbor Statement." In it they, like AETNA,lament the threat of increased competition and the introduction of government regulation. I suppose either title is an improvements over the once tried and true "Cover Your Butt" statement. Amazingly Assurant's Safe Harbor statement is eerily similar to AETNA's Cautionary statement, as is the GAAP statement that follows. It was a very good idea for them to have the law firm that draws up such documents change at least a few of the key terms so that the public wouldn't accuse Health Insurance providers of collusion.
Yes, these companies have committed collusion. They collude to send their lobbyist to our Capital. They collude to spend a portion of our precious premiums to pay for those lobbyist, and they collude to keep their paying customers as much in the dark as possible. Why should we question how our premiums are being spent? They collude to stave off competition, and to bring to a grinding halt any legislative efforts to improve health care for America.
Here is the link to the report for those who still doubt what your health insurance premiums mean to the "for profit" health insurance industry.
http://ir.assurant.com/pressroom/releaseDetail.cfm?ReleaseID=399840.0
Finally, I leave you with another quote from the Assurant financial report. If I wanted to play the stock market, I would have done so. Maybe if I had, I might have earned a better return on my "involuntary" investment.
"Assurant Solutions
Assurant Solutions second quarter 2009 net operating income was $27.9 million, a 14 percent decrease from second quarter 2008 net operating income of $32.4 million. Net operating income for the six months of 2009 was $58.2 million, down 27 percent from $79.9 million for the first six months of 2008. For both the quarter and six months, the decline was primarily the result of unfavorable credit insurance loss experience in the United Kingdom, which increased the combined ratio, as well as lower net investment income. The domestic combined ratio continued to improve sequentially and on a quarterly basis. Results for the second quarter 2009 include a $2.4 million restructuring charge, and results for the six months of 2008 include $6.9 million of losses from Brazilian operations and $11.7 million of income from a client related settlement.
Assurant Solutions second quarter 2009 net earned premiums decreased 5 percent to $666.9 million, from $700.6 million in the second quarter 2008. Net earned premiums for the first six months of 2009 decreased 5 percent to $1.3 billion. The decrease for the quarter and the six months was primarily driven by the application of Statement of Financial Accounting Standards 97 ("FASB 97") for pre-need insurance contracts sold in 2009 and the unfavorable impact of foreign exchange. Absent the application of FASB 97 and the impact of foreign exchange, net earned premiums would have increased $36.0 million, or 5.1 percent, for the second quarter of 2009."
Wednesday, July 29, 2009
Obama Answers Your Questions on Health Care Reform - AARP Townhall Meeting
http://bulletin.aarp.org/yourhealth/articles/townhall.html
Some of the questions are very good. The answers are even better. If pragmatism is a bad trait, then I like this bad trait.
An Alaskan's Response to Obama's Speech in North Carolina
Here is the link to the article published on the Huffington Post.
Here is my favorite quote from the speech.
"We have a system today that works well for the insurance industry, but it doesn't always work well for you," Obama told more than 2,000 people in a North Carolina high school gymnasium. "What we need, and what we will have when we pass these reforms, are health insurance consumer protections to make sure that those who have insurance are treated fairly and insurance companies are held accountable."
I had so much fun pouring over AETNA's second quarter result for 2009 that I just cannot pass up the chance to do the same for Assurant Health.
Assurant is my health care provider. While technically I am not an investor who has purchased public shares in the company, I do feel that the money I pay each year in premiums and fees (increased 21% from 2008) more than justifies my right to listen in to this conference. I encourage other Assurant members to do the same. The result will be posted at www.assurant.com, so those folks understandably not inclined to crawl out of bed at a beastly hour of the morning can read it then.
I myself simply cannot resist the temptation to peek behind the curtain to the wizard, er, I mean the men and women running the show. They seem to have some magic with which to enthrall and mystify certain members of the Democratic party who represent Americans in the US House and Senate. What fairy dust has been sprinkled upon the bone that lures the Blue Dogs away from the path of the single payer system that many, many, many Americans want them to explore?
Seriously, I think the crux of the Blue Dog dilemma lies in the fears harbored by their own constituents. Its all about votes and currying favor. I don't think they or their constituents understand the current system well enough to choose to scrap what they have in favor of a better one.
Many Americans are unhappy about the high cost of medical care, but they fear that they might lose what they have now. They prefer the tangible, flawed and unreliable as it may be, over the intangible with its uncertainties and ambiguities. The only solution is to shed light on the current status of private insurance. By doing so, its flaws can be revealed and explored. Once that has bee accomplished, a meaningful and productive discussion can begin and a long term solution found.
I wrote a piece a week ago that touched on the state of the economy as it relates to the baby boomers. That relationship extends to the insurance industry. For many, many years, health insurance industries have reaped the benefits of the earning capacity of the boomer generation. In fact, when certain "not for profit" companies realized the potential profits to be had in the health insurance business, they pushed for deregulation of the industry, and lobbied fiercely for the right to operate as "for profit" entities. Since then, memberships (defined as policy holders paying premiums) have stayed steady for twenty plus years, and times have been good. The boomer generation has been relatively healthy, resulting in low ratios of payout for medical expenses (MBRs), equating to a stable income for health insurance companies. So stable in fact, that larger, umbrella organizations considered it a feather in their corporate cap if they owned one or more health insurance companies. Gramm Leach Bliley passed in 1999 allowed those umbrella corporations to purchase as many as they could afford, and henceforth health insurance and its relation to the medical industry changed forever.
Unfortunately, as the baby boomers grow older, and deal with increasing numbers of age related medical problems, the profits from those premiums are shrinking. The insurance companies have to start paying out on the premiums they have been collecting from the boomer generation for years, but they must also maintain the existing profit margins. Gotta keep shareholders happy, and gotta pay those bonuses, er pensions ($66 million I believe). Where did the money go that was paid out in premiums month after month, quarter after quarter and year after year?
Why is this question important, and why do I want it to be important to anyone who will read? We need this money. We paid it, and we want it. Where is it, and why has no one posed this question to insurance companies, or to the government that should be regulating them?
AETNA states that they made a profit in 2008, yet our premiums were raised yet again in 2009 by 11% (AETNA 2nd Quarter Financial Report 2009). Even if I could swallow that medical expenses increased that much, which I do not (see US Bureau of Statistics), what happened to customer satisfaction? My outrage when I call and protest a 21% increase in premiums should mean something, but apparently it does not, because they would budge. I had to switch to a 50/50 plan just to get my premium back to an affordable level. I am still searching for the state legislation that allows them to jack my rates sky high. They say it exists, but I have not found it to date. The health insurance companies do not have to care, because the customers have no place to go to shop around for a better plan.
If the investors are protected from fraud, what about the policy holder? We don't even expect a return on our investment, just payment of medical expenses when they are incurred, and, heaven forbid, access to procedures that will help us cure what ails us.
The average medical to benefit ratio (MBR - the money paid out for medical claims in relation to premiums paid) is 84-85% for the commercial insurance and slightly less for private, so that leaves fifteen to sixteen percent in profit before taxes. The companies seem to average about ten percent profit after taxes and expenses. What happens to those profits? Do they get reinvested for future payouts? Was that not what we were told? What about the big pool of funds? What happened to our safety net?
The safety net disappeared when insurance companies were allowed to operate as for profit financial entities, and then allowed to operate under the umbrella of other financial institutions. Whatever is left over after taxes, payed out to shareholders and overhead, gets distributed however and wherever they see fit. Smart companies keep some in reserve for lean years, but smart operational policies have not dominated corporate methodology for the past decade.
This statement for AETNA's financial report pretty much sums up the state of financial affairs for the third largest health insurance provider in the U.S.
"Revenues excluding net realized capital gains (losses) increased 10 percent to $8.7 billion for the second quarter of 2009, compared with $7.9 billion for the second quarter of 2008. The growth in second-quarter revenue reflects an 11 percent increase in premium revenue and an 8 percent increase in fees and other revenue. This revenue growth reflects a higher level of membership and premium rate increases."
Based on these numbers and the formula for making a profit for shareholders, premiums will continue to increase as more Americans stop paying into the premium pool. It just warms the cockles of my heart to know that my premiums help keep the CEO's, CFO, C something or others and shareholders warm and dry at night while all over American, folks put off crucial medical treatment so they can afford to pay their rent, put food on their table, or gas in their tanks.
How can switching from "for profit" back to "not for profit" effect the profit margins seen by these companies? We have to buy insurance. It is that simple. If one does not want to see their finances eaten up with medical debt, one must participate in an insurance program. I would at least like to see a reversal of Gramm Leach Bliley, and have insurance companies removed from the list of financial entities that can be incorporated into an umbrella organization, because that is where the remainder of our premiums go. A "not for profit" agency could keep those premiums safe for the future. Some investment is okay, but not the wholesale free for all that has decimated our financial market.
Again, a statement from the AETNA financial report:
"We have factored the most recent medical cost experience into our actuarial methodologies in setting our June 30 reserves and into our revised full-year outlook," said Joseph M. Zubretsky, executive vice president and CFO. "Meanwhile, we continue to have a very strong financial profile and capital position, and our health care revenue growthis strong. In addition, we continue to effectively manage our operating expenses while making the appropriate investments to ensure our long-term competitive strength.
If the companies are doing so well, then why the blazes are we the people paying out the nose for substandard, overly manipulated, oft times contested until we are dead, medical treatment? Could those "appropriate investments" be related to the scores of lobbyist slavery at the heels of our representatives in Congress? How can we possilby be satisfied with this system, or as President Obama remarked, the current status quo?
Please write to the Congress men and women of states with Blue Dog democrats using postcards, cocktail napkins, the back of your insurance premium payment notice (Ooh, I like that one), and explain to them that you don't like the current situation in health care one bit. Write to the newspapers in these states and complain that Alaskans not only have to put up with Palin, but we pay twice as much in premiums as the rest of America for the same substandard medical care, and we want change.
Monday, July 27, 2009
A Peek Into the Heart of a Health Insurance Giant
http://www.aetna.com/news/news...
I have pasted above the link to AETNA's Second Quarter 2009 results released today, July 27, 2009. I have also posted a link to the Summary of this report.
http://www.aetna.com/news/news...
Although reading this report may lead to spontaneous 360 degree head rotation, it will provide the clearest insight into the financial workings of the third largest insurer in the US. This report allows one to understand the financial goals of the company, how those goals were or were not achieved, the current profit listings and the breakdown of how those profits were generated.
How does this information relate to Health Care Reform?
Most of us agree that we want affordable health care. Health insurance companies control health care for all intents and purposes. How many Americans pay out of pocket for treatment versus how those who pay through their insurance companies? Of those who pay directly, how many have the ability to negotiate the price of their services directly with their providers? Only insurance companies have the resources and wherewithal to do so, and the public willingly pays for those service in the form of premiums, deductibles and co-pays. So critical is the role of health insurance companies in negotiating lower, supposedly more affordable costs, that many Americans worry that any changes to the current system will jeopardize their ability to obtain future medical treatment. Only through slow attrition of numbers, as policy holder after policy holder is denied access to vital services after making a claim on their policy, do they realize how fragile and imperfect is the system.
Profit drives health insurance. Insurance companies, like all publicly owned corporate entities must make a profit, and they must pay their shareholders dividends before paying themselves. This quarterly report is the companies financial statement to their shareholders, and clearly AETNA made a profit even after taking losses. They even made a profit on their operating expenses. They made a profit from our premiums.
According to AETNA's report:
"Total company results
* Revenues excluding net realized capital gains (losses) increased 10 percent to $8.7 billion for the second quarter of 2009, compared with $7.9 billion for the second quarter of 2008. The growth in second-quarter revenue reflects an 11 percent increase in premium revenue and an 8 percent increase in fees and other revenue. This revenue growth reflects a higher level of membership and premium rate increases."
According to the report, AETNA's profits increased by ten percent, and our premiums increased eleven percent. Interesting. What does an eleven percent increase look like on paper? If one paid $250/month in premiums per month in 2008, and had them raised by 11% in 2009, the new premium would be $277.50. Unfortunately for many of us, our premiums increased by a tiny bit more. I will gladly use my rate increase. For two years I paid $248, then last month, my rate increased to $317. That constitutes a 21% increase in premium from 2008 to 2009. I have a portable insurance policy, and pay all my own premiums. I have a high deductible as well,and pay 20% of the first $10,000 because I have an 80/20 plan. My company has only paid $740 towards my medical expenses.
AETNA is not my insurance company, but the portfolio for my insurer reads very similarly.
Why did our premiums increase by eleven percent?
Perhaps we can find some clarity in this statement:
"Total Operating Expenses were $1.5 billion for the second quarter of 2009, $66.0 million higher than the second quarter of 2008, reflecting a previously disclosed increase in the financing component of pension expense partially offset by $38.2 million in insurance proceeds related to certain litigation we settled in 2003. The operating expense ratio (3) was 17.4 percent and 17.8 percent for the second quarter of 2009 and 2008, respectively. Including net realized capital gains (losses) and the litigation-related insurance proceeds, these percentages were 16.9 percent for the second quarter of 2009 and 17.9 percent for the second quarter of 2008."
The report states that $66 million of AETNA's operating losses were related to a financing component of "pension expense." The loss was offset by proceeds from litigation. So if the company took a loss not related to actual medical expenses, and those losses were partially offset by other proceeds, why then were premiums increased by eleven percent, and why were losses from "pension expenses" factored into the equation?
What are we paying for Alaskans? In its quarterly report, AETNA does not clearly relate the losses they incurred to medical costs paid out on claims, yet that is what one would expect to hear from them as a justification for increasing premiums. What AETNA, and I imagine other insurance companies, tell their shareholders regarding losses appears to conflict with what the policy holders are told, and what has been oft times reported by those who oppose health care reform.
Health insurance can be beneficial. No question. I could not afford to pay out of pocket for the various medical expenses I have incurred over the years. I have paid over twenty thousand in cash over the years when I didn't have insurance coverage, and that cost me a dream at one point. Unfortunately, health insurance has overstepped its bounds, and doesn't function in the manner it represents itself to its clients. Worse still, its clients are captive. Businesses have to provide it, and anyone who doesn't wish to be strangled with medical debt carry a policy. Insurance companies now stand between the public and its ability to access affordable medical care.
These words from the Cautionary Statement provided in the report are of particular worry to me.
As regards factors contributing to potential corporate losses, "...which can significantly and adversely affect Aetna's business and profitability; failure to achieve desired rate
increases and/or profitable membership growth due to the slowing economy and/or significant competition, especially in key
geographic markets where membership is concentrated; continued volatility and further deterioration of the U.S. and global
capital markets, including fluctuations in interest rates, fixed income and equity prices and the value of financial assets, along
with the general deterioration in the commercial paper, capital and credit markets, which can adversely impact the value of
Aetna's investment portfolio, Aetna's profitability by reducing net investment income and/or Aetna's financial position by
causing us to realize additional impairments on our investments..."
Clearly, we the policy holders, appear to be little more than factors in an investment portfolio. By their own statement, AETNA sees increased competition as a threat, yet the public has had it rammed down its collective gullet that free market competition benefits us. It does but only if competition is allowed to exist and thrive.
Finally, the Cautionary Statement allows us insight into what measures the lobbyist who support the insurance industry have taken to see to it that the companies they represent do not realize "additional impairments on {their clients} investments."
So to summarize, the message for sick America is this: If the insurance companies need to negotiate lower prices for your treatment and subsequently cut back on the type, quality or amount of medical services in order to achieve greater profits for the shareholders whose rights to a return on investment is held in greater esteem than your right to adequate medical care, then so be it.
This is what this fight comes down to, and I refuse to let any paid mouthpiece steer me or my elected representatives away from the truth.
I have pasted above the link to AETNA's Second Quarter 2009 results released today, July 27, 2009. I have also posted a link to the Summary of this report.
http://www.aetna.com/news/news...
Although reading this report may lead to spontaneous 360 degree head rotation, it will provide the clearest insight into the financial workings of the third largest insurer in the US. This report allows one to understand the financial goals of the company, how those goals were or were not achieved, the current profit listings and the breakdown of how those profits were generated.
How does this information relate to Health Care Reform?
Most of us agree that we want affordable health care. Health insurance companies control health care for all intents and purposes. How many Americans pay out of pocket for treatment versus how those who pay through their insurance companies? Of those who pay directly, how many have the ability to negotiate the price of their services directly with their providers? Only insurance companies have the resources and wherewithal to do so, and the public willingly pays for those service in the form of premiums, deductibles and co-pays. So critical is the role of health insurance companies in negotiating lower, supposedly more affordable costs, that many Americans worry that any changes to the current system will jeopardize their ability to obtain future medical treatment. Only through slow attrition of numbers, as policy holder after policy holder is denied access to vital services after making a claim on their policy, do they realize how fragile and imperfect is the system.
Profit drives health insurance. Insurance companies, like all publicly owned corporate entities must make a profit, and they must pay their shareholders dividends before paying themselves. This quarterly report is the companies financial statement to their shareholders, and clearly AETNA made a profit even after taking losses. They even made a profit on their operating expenses. They made a profit from our premiums.
According to AETNA's report:
"Total company results
* Revenues excluding net realized capital gains (losses) increased 10 percent to $8.7 billion for the second quarter of 2009, compared with $7.9 billion for the second quarter of 2008. The growth in second-quarter revenue reflects an 11 percent increase in premium revenue and an 8 percent increase in fees and other revenue. This revenue growth reflects a higher level of membership and premium rate increases."
According to the report, AETNA's profits increased by ten percent, and our premiums increased eleven percent. Interesting. What does an eleven percent increase look like on paper? If one paid $250/month in premiums per month in 2008, and had them raised by 11% in 2009, the new premium would be $277.50. Unfortunately for many of us, our premiums increased by a tiny bit more. I will gladly use my rate increase. For two years I paid $248, then last month, my rate increased to $317. That constitutes a 21% increase in premium from 2008 to 2009. I have a portable insurance policy, and pay all my own premiums. I have a high deductible as well,and pay 20% of the first $10,000 because I have an 80/20 plan. My company has only paid $740 towards my medical expenses.
AETNA is not my insurance company, but the portfolio for my insurer reads very similarly.
Why did our premiums increase by eleven percent?
Perhaps we can find some clarity in this statement:
"Total Operating Expenses were $1.5 billion for the second quarter of 2009, $66.0 million higher than the second quarter of 2008, reflecting a previously disclosed increase in the financing component of pension expense partially offset by $38.2 million in insurance proceeds related to certain litigation we settled in 2003. The operating expense ratio (3) was 17.4 percent and 17.8 percent for the second quarter of 2009 and 2008, respectively. Including net realized capital gains (losses) and the litigation-related insurance proceeds, these percentages were 16.9 percent for the second quarter of 2009 and 17.9 percent for the second quarter of 2008."
The report states that $66 million of AETNA's operating losses were related to a financing component of "pension expense." The loss was offset by proceeds from litigation. So if the company took a loss not related to actual medical expenses, and those losses were partially offset by other proceeds, why then were premiums increased by eleven percent, and why were losses from "pension expenses" factored into the equation?
What are we paying for Alaskans? In its quarterly report, AETNA does not clearly relate the losses they incurred to medical costs paid out on claims, yet that is what one would expect to hear from them as a justification for increasing premiums. What AETNA, and I imagine other insurance companies, tell their shareholders regarding losses appears to conflict with what the policy holders are told, and what has been oft times reported by those who oppose health care reform.
Health insurance can be beneficial. No question. I could not afford to pay out of pocket for the various medical expenses I have incurred over the years. I have paid over twenty thousand in cash over the years when I didn't have insurance coverage, and that cost me a dream at one point. Unfortunately, health insurance has overstepped its bounds, and doesn't function in the manner it represents itself to its clients. Worse still, its clients are captive. Businesses have to provide it, and anyone who doesn't wish to be strangled with medical debt carry a policy. Insurance companies now stand between the public and its ability to access affordable medical care.
These words from the Cautionary Statement provided in the report are of particular worry to me.
As regards factors contributing to potential corporate losses, "...which can significantly and adversely affect Aetna's business and profitability; failure to achieve desired rate
increases and/or profitable membership growth due to the slowing economy and/or significant competition, especially in key
geographic markets where membership is concentrated; continued volatility and further deterioration of the U.S. and global
capital markets, including fluctuations in interest rates, fixed income and equity prices and the value of financial assets, along
with the general deterioration in the commercial paper, capital and credit markets, which can adversely impact the value of
Aetna's investment portfolio, Aetna's profitability by reducing net investment income and/or Aetna's financial position by
causing us to realize additional impairments on our investments..."
Clearly, we the policy holders, appear to be little more than factors in an investment portfolio. By their own statement, AETNA sees increased competition as a threat, yet the public has had it rammed down its collective gullet that free market competition benefits us. It does but only if competition is allowed to exist and thrive.
Finally, the Cautionary Statement allows us insight into what measures the lobbyist who support the insurance industry have taken to see to it that the companies they represent do not realize "additional impairments on {their clients} investments."
So to summarize, the message for sick America is this: If the insurance companies need to negotiate lower prices for your treatment and subsequently cut back on the type, quality or amount of medical services in order to achieve greater profits for the shareholders whose rights to a return on investment is held in greater esteem than your right to adequate medical care, then so be it.
This is what this fight comes down to, and I refuse to let any paid mouthpiece steer me or my elected representatives away from the truth.
Wednesday, July 22, 2009
How Citizens Can Participate in Health Care Reform
The handsome fellow on the right is my dad, Thomas Victor Fuller. He passed away in March this year. He died of cancer which progressed quickly after his initial diagnosis in October of 2008. The life he lived in the face of his own death inspired me to research health care and its relationship to health insurance. Even as he struggled to keep track of medical costs and insurance questions, he maintained a positive attitude, and even took the time to pass what he learned from his experience on to his children. We spent many hours discussing health care in the month I spent with him before he died. His love and compassion for his fellow humans compels me to pass on the lessons we both learned to others who I fervently hope will never need to use it.
My discussions with other Alaskans has convinced me that the greatest challenge faced in reforming health care lies with our understanding of how it works, who runs, who regulates it and its complexities. One cannot fix anything unless one understands its form and function.
I do not intend to launch into a history of health care or health insurance. There are books and articles available on line to enlighten the curious. I do intend, however, to uplift this complex issue out of the realm of moral speculators, and worry warts who believe that any attempt by government to regulate or federalize the insurance industry, which manages the billions of dollars the public spends on health care premiums and deductibles, will result in the utter destruction of the medical industry and society as a whole. Black and white scenarios appall my sense of practicality. Everyday in this country businesses adopt regulations to guide and strengthen themselves, but the reality is that many businesses fold because they fail to do so effectively. Why then, do we assume just because a corporation has grown to mammoth proportions, that its methods are fool proof, and above reproach?
Corporations today are highly diversified. The right hand and the left hand may span continents, and encompass a broad range of disciplines and industries. Simply tracking the ownership of a company can leave a researcher slumped exhausted in a chair praying for divine clarity. It is therefore not inconceivable that the right and left hands of a mega conglomerate corporation made up of many smaller companies do not always know what each is up to operationally or fiscally.
Health insurance falls into the classification of a product/service that can be owned and operated under the of larger, parent companies referred to as "umbrella" organizations. Companies authorized to operate under the umbrella can include banks, investment firms, and mortgage banks, and other financial institutions, and were authorized to exist with the passage of the Gramm, Leach, Bliley Act of 1999.
http://banking.senate.gov/conf/ (a little light reading for those with the time to do so)
Larger companies often purchase health insurance companies because the profits they generate are fairly stable. Yes, we need insurance. Companies are required to provide insurance for employees, so the money in the form of premiums keeps flowing, which means liquidity, cash on hand.
What happens to the money one pays into the policies one purchases? Does it sit in a pool of money to remain untouched until one needs to tap into it for medical treatment? Do the companies reinvest it? Do those investments tend to be safe or risky, and if so, to what proportion? What protects the policy holder from monetary loss should the company be liquidated by the umbrella organization? Does the government insure it against loss like the the FDIC does with our savings?
In a nutshell, how does health insurance really work? Understanding how it works is vitally important when it comes time to discuss how to improve it, or scrap it or whatever works to improve health care for Americans. Knowledge is power. Without it, any future discussions will bog down in accusations and bad information. Nothing will be solved, and even if a solution avails itself to our representatives in Congress, it stands a fair chance of being riddles with flaws and inconsistencies.
And Congress is discussing health care, and passing resolutions, and struggling to get those discussions out onto the floor of the House for open debate. What can we do to help them? How can we aid them in their efforts to simplify a health care system that has become such a tangled, seemingly unresolvable mess?
How can Alaskans and all Americans contribute to health care reform?
Every American who has health insurance needs to pull out their policy and read it thoroughly from front to back. After they have read it, they need to make a tally sheet listing pros and cons, scribble notes on the border with questions to help clarify any gray areas. Then, each policy holder needs to call, write and/or email their insurance company with those questions. If every insured person did this, I am confident that we might begin to find real solutions. Your Congressperson is but one person, but their constituency is mighty, and when well informed nigh unstoppable.
If you participate in a company insurance program, call the local representative and have them walk you through the policy, but press them to provide more than just the company catch phrases. Don't assume that your company fully understands the policy, because often times they do not. Learn as much as you can, and, if possible, share what you learn with other employees.
Some keys questions in addition to those listed earlier:
1. How are my premiums managed?
2. Are they managed by the company listed on the policy or by the parent company?
3. Who is the insurance adjuster? This is the company that will you will be working with in the event that you need to tap into the policy for medical reasons.
4. What is the relationship between the company who underwrites you policy and the adjuster - geographical, financially?
5. How is your medical provider paid?
6. What state and federal regulations govern private insurance? Have them send you copies of the regulations. They will do it.
Note: this last suggestion will take time. Pour some coffee. Grab a note pad, and prepare to take notes.
7. Ask a representative to walk you through the process of making a claim from start to finish. This is the only truly accurate way to know precisely what will be involved should you ever need to go to a doctor for treatment. What type of coverage you carry, make them describe to you how it works.
One very critical impediment to any discussion of health care is the perception by many policy holders that their health insurance works adequately for their needs. Why change what works. However, in a recent poll published by the Washington Post revealed that many of those who made this observation had either never used the policy or had used it for only very minor treatment.
Health insurance, indeed all forms of insurance, is by its very nature, always been a bit of a gamble. One pays for it, but hopes never to use it. Unfortunately, the health care industry over the past twenty or so years has been slowly restructured to function around this gamble. Fees for services, devices, medicines and lodging have been determined by what health insurance companies will pay for them at some indeterminate time in the future. To put it into perspective, what we pay in the event of a medical need is speculative, and based on what-if scenarios. Insurance companies bargain with doctors, hospitals and long term care facilities to make deals on the price of health care. We trust the insurance companies to stay on top of the market, and to make accurate predictions, but how successful have they been thus far? The current situation may be our best indicator, and the figure do not bolster confidence in the general public.
In closing, this blog will attempt to add daily to its list of observations and suggestions, and I hope to hear more from readers. This blogger requests that all opinions and criticism be of a constructive nature. The naysayers and finger pointers already thrive and abound in droves. Any truly profound suggestions or observations will be forwarded on to a Congressperson with permission from the person who submitted along with recognition for the contribution.
Monday, July 20, 2009
My Response to a Comment on MSN Today...
This letter is a response to a comments from a fellow by the name, Belowbook, to an article titled "9 Reasons the Economy Won't Recover. I won't paste the entire content, just one tired talking point that basically represents the spirit of his statement.
Below books - "There is absolutely nothing that the government can do to stop the recession."
I vehemently disagree. The government can do something to rectify the recession, and everyone who understands the ebb and flow of money knows what needs to be done. Adjust the taxes, and collect those taxes from the citizenry who have for at least twenty years been underpaying their share. No part of the Lord's prayer states "and forgive us our taxes, as we forgive those who levy taxes against us." Find the money, pry it out of tax shelters, and overseas banks, then figure out a way to reinvest the money in a sensible manner.
The very simplest explanation for one major element in the current ebb of money is linked to the boomer generation, specifically those boomers who constitute the driving force behind the economy of the late eighties and nineties. Perhaps they once identified themselves as Yuppies, but that was many years ago. This segment of boomers were incredible revenue generators, and their numbers were many. Yes, we now understand that such profits were created at a heavy price to the American economy, and to the environment, but they certainly made money, lots of it. Now, the boomers want to retire, and enjoy their golden years. A marked shift in investment strategies for the boomer generation has taken place. Look at the figures for goods and services that continue to thrive, and you will see that the energies once directed toward growing a small business into a profitable enterprise worthy of being sold to a multinational conglomerate have been redirected towards learning how to program a sophisticate autopilot system on a yacht. The money exists, but the wherewithal to invest it by building jobs that provide wages to workers has ebbed like the cash flow that once propped up Wall Street.
The idea that the boomer entrepreneurs will jump back up and return to their earlier mode of operation (birthing Patagonia's, Star bucks, etc) needs to be kiboshed. I don't see the boomers coming out of retirement, That leaves the forty somethings, and their offspring to pick up the slack, and get out there and start some new businesses to call our very own. The only problem we face is a distinct lack of liquidity. Simple. Tied up with the boomers. If they aren't spending it to on high tech transportation, or their children aren't ripping around the world looking for new forms of fun, they have managed to find hidey-holes in which to protect it, or they have decided to invest it passively in corporations still maintaining some semblance of a profit margin. What isn't being done with it? It isn't being used to start new businesses. Not in this country where the new jobs could benefit the citizens of America. Those same citizens who for years have purchased their products, worked in their retail stores, and watched mute as our wages either stagnated or shrank, and as benefits got cut or slashed.
Why don't the forty somethings have any money? I will hazard a few guesses. Wages could have something to do with it. National figures on wages indicate that our wages have failed to keep pace with inflation since the late eighties, and may have actually shrunk. What didn't shrink was our access to credit. Beautiful, lovely, oh so easy to get and spend credit was doled out to us by the same boomers who called the 40-odds slackers, and accused them of being the laziest generation to ever populate a planet. Yet, somehow, they sensed in this generation an untapped resource, and tap it they did but good. But far from being slackers, the forty somethings proved to be excellent workers as long as we were willing to relocate on a regular basis, and retrain frequently. I am a slacker baby, and I can attest to the fact that surviving through the nineties involved a lot of shuffling, learning new skills and a willingness to live on credit during lean times. Still, the lean times always passed. As the years passed it became easier to stomach the fact that wages never improved, companies grew and dissolved more rapidly than Kool-Aid crystals in a icy pitcher of water on a hot summer day, and that the dream of owning a home was only possible if you worked two jobs, and refrained from indulging in the luxury of kids that might eat into your limited income. Today, our generation can stand back and admire our achievements as we lament the facts that our gonads have nearly passed their primes, and the house we struggled to purchased will never be paid off in time for a retirement we no longer believe will ever take place. Our yards are barren of children, and the Play Station 4 just doesn't seem to ease the loss like it did in our thirties when a stiff drink and completing the next level of Doom did the trick.
Credit in return for a reasonable living wage. It seemed like a fair trade at the time. We always seemed to be able to pay off the debt. So what if the interest on the $1000 sofa (made in Malaysia for cheap), actually cost $1500 after the interest was paid. We could buy it, and we were happy. We aren't so happy now. The sofa fell apart, and at forty odd, the jobs aren't rolling down the pike. We liquidated our last 401K after we switched our last job to get us through to the next paycheck. Strange how the intervals between jobs got longer and longer. Where did the jobs go? Overseas? Maybe. Or perhaps they just dissolved. We saw that happen often enough throughout the nineties and early two thousands, only now no new jobs are replacing them. Did I mention that we sacrificed offspring during those tumultuous years? We certainly can't depend on our children to work for us like we did for the boomers.
We didn't live like kings or even D list actors. We just used credit to maintain a reasonably comfortable existence minus the matching end tables. When I speak of the use of credit cards by my fellow slackers, I am not alluding to the sort of credit card debt that involves ridiculous sums of money, or the purchase of ludicrous luxury items. I merely refer to the use of credit that extends the paycheck beyond paying for utilities, day care, medical bills and so forth. The purchase of items such as the above mentioned couch, the upscale garments that our corporate boss insists we wear to work, but for which they don't offer commiserate wages to provide for them, and the list goes on and on. I know many reading this understand very well my meaning on this subject. How did we allow this to happen?
We fell asleep at the wheel (probably after pulling two shifts, and clawing our way back in the morning from the land of No Doze). While we toiled and struggled to pay bills, keep ahead of the interest on our credit cards, and rolled away from our mates too exhausted to procreate or fearful that we would be unable to provide for them, politicians stealthily pushed their beds together with the movers and shakers of Wall Street. No king sized beds. Too obvious. Twin beds look so innocuous, but will do the trick in a pinch. Had we been better rested, we likely would have detected the scuff marks from repeated moves as they shuffled from one suitor to another, and from bedside to bedside. As Madonna's fame rose an faltered, Boy George underwent drug rehabilitation, the face of government was slowly and inexorably altered. The rules governing our economy underwent the mother of all plastic surgeries as the movers and shakers of the boomer generation strove to insure the bounty of their golden years of industry were well protected. Their children will be well provided for, whilst we slackers mourn the lack thereof. Don't believe me, then check the census numbers for our generation. Look around you, and count how many of your friends didn't have kids. How many of your parents generation got away with having less than 2.5 children?
So, to refocus on Below books comment: the government could have and should have done something to prevent the recession from occurring in the first place. So why didn't the government intercede before everything came completely unhinged, and our Federal Reserve went nearly bankrupt? Because the American public wasn't involved in their government. Its tough medicine to swallow, but it is true. We must stop referring to the government of These United States of America in the third person. We cannot afford to refer to it as "that" government, or to our governing body as "those people." It is our government, we elect those who serve, and all citizens have the power to participate in it. Participating will not be easy. One will be rebuffed, ignored and just plain laughed at by some who think they cannot be dislodged from power. One citizen who seeks change will have to join with many, and watch the mechanisms of government closely to detect the flaws, and pin point the weak links. We will need to watch our polling places and insist on clean elections. We must avoid being mollified by the swift, and easy stroke of the pen, and search state and federal Congressional records to see if real action has been taken.
What if we turned all of the energy expended in years of job searching, pavement pounding and inputting keystrokes for credit card pin numbers, and joined the youth who did manage to be born to regain our government? We don't want to pound the wealthiest percentile in poverty, we just want to collect back some of that interest we paid over the years to make ends meet, when our paychecks failed to pay the bills.
Yes, we can wake up and realize that, while we made use of our easily accessible credit, frolicked on our Play stations and kept up with the latest in virus protection, our roads are crumbling, our air traffic controller computers need replacement, and our parents can't seem to find a doctor that will accept Medicare/Medicaid. We get it now, and it is never to late to make amends. If not for us, for our children, and for those who seek to pursue the American dream in the future. If we could convince the upper echelon to part with enough of that once productive capital to start up even a tenth of the businesses they once grew and nourished so lovingly in the eighties and nineties, we would all benefit. Oh, we will pay them dividends, just not as much. And we will insist that the health of the company, its customers (satisfaction guaranteed), and its employees will take precedence over the shareholder (investment is after all a bit of a gamble - right?). No more book cooking, profit ballooning, and impossibly complicated ledgers, just companies selling goods and services. And finally, those businesses stay in the United States. We the people, unmercifully lobby our state and federal legislatures and demand the implementation of regulations to even the playing fields in commerce, trade and finance. The very rich don't have to give up their retirements, they just have to pay us some long overdue back wages. No more shiny baubles, beads or trinkets to lure us away from what is real and can be passed on to our children. You don't see them accepting wages in the form of Visa, Master card, or American Express. The boomers lived and still live by the credo, "pay yourself first." We don't have to be quite as greedy, but we certainly could stand to benefit by adopting enough of that motto to ensure that our citizens can enjoy their full share of the dream.
Below books - "There is absolutely nothing that the government can do to stop the recession."
I vehemently disagree. The government can do something to rectify the recession, and everyone who understands the ebb and flow of money knows what needs to be done. Adjust the taxes, and collect those taxes from the citizenry who have for at least twenty years been underpaying their share. No part of the Lord's prayer states "and forgive us our taxes, as we forgive those who levy taxes against us." Find the money, pry it out of tax shelters, and overseas banks, then figure out a way to reinvest the money in a sensible manner.
The very simplest explanation for one major element in the current ebb of money is linked to the boomer generation, specifically those boomers who constitute the driving force behind the economy of the late eighties and nineties. Perhaps they once identified themselves as Yuppies, but that was many years ago. This segment of boomers were incredible revenue generators, and their numbers were many. Yes, we now understand that such profits were created at a heavy price to the American economy, and to the environment, but they certainly made money, lots of it. Now, the boomers want to retire, and enjoy their golden years. A marked shift in investment strategies for the boomer generation has taken place. Look at the figures for goods and services that continue to thrive, and you will see that the energies once directed toward growing a small business into a profitable enterprise worthy of being sold to a multinational conglomerate have been redirected towards learning how to program a sophisticate autopilot system on a yacht. The money exists, but the wherewithal to invest it by building jobs that provide wages to workers has ebbed like the cash flow that once propped up Wall Street.
The idea that the boomer entrepreneurs will jump back up and return to their earlier mode of operation (birthing Patagonia's, Star bucks, etc) needs to be kiboshed. I don't see the boomers coming out of retirement, That leaves the forty somethings, and their offspring to pick up the slack, and get out there and start some new businesses to call our very own. The only problem we face is a distinct lack of liquidity. Simple. Tied up with the boomers. If they aren't spending it to on high tech transportation, or their children aren't ripping around the world looking for new forms of fun, they have managed to find hidey-holes in which to protect it, or they have decided to invest it passively in corporations still maintaining some semblance of a profit margin. What isn't being done with it? It isn't being used to start new businesses. Not in this country where the new jobs could benefit the citizens of America. Those same citizens who for years have purchased their products, worked in their retail stores, and watched mute as our wages either stagnated or shrank, and as benefits got cut or slashed.
Why don't the forty somethings have any money? I will hazard a few guesses. Wages could have something to do with it. National figures on wages indicate that our wages have failed to keep pace with inflation since the late eighties, and may have actually shrunk. What didn't shrink was our access to credit. Beautiful, lovely, oh so easy to get and spend credit was doled out to us by the same boomers who called the 40-odds slackers, and accused them of being the laziest generation to ever populate a planet. Yet, somehow, they sensed in this generation an untapped resource, and tap it they did but good. But far from being slackers, the forty somethings proved to be excellent workers as long as we were willing to relocate on a regular basis, and retrain frequently. I am a slacker baby, and I can attest to the fact that surviving through the nineties involved a lot of shuffling, learning new skills and a willingness to live on credit during lean times. Still, the lean times always passed. As the years passed it became easier to stomach the fact that wages never improved, companies grew and dissolved more rapidly than Kool-Aid crystals in a icy pitcher of water on a hot summer day, and that the dream of owning a home was only possible if you worked two jobs, and refrained from indulging in the luxury of kids that might eat into your limited income. Today, our generation can stand back and admire our achievements as we lament the facts that our gonads have nearly passed their primes, and the house we struggled to purchased will never be paid off in time for a retirement we no longer believe will ever take place. Our yards are barren of children, and the Play Station 4 just doesn't seem to ease the loss like it did in our thirties when a stiff drink and completing the next level of Doom did the trick.
Credit in return for a reasonable living wage. It seemed like a fair trade at the time. We always seemed to be able to pay off the debt. So what if the interest on the $1000 sofa (made in Malaysia for cheap), actually cost $1500 after the interest was paid. We could buy it, and we were happy. We aren't so happy now. The sofa fell apart, and at forty odd, the jobs aren't rolling down the pike. We liquidated our last 401K after we switched our last job to get us through to the next paycheck. Strange how the intervals between jobs got longer and longer. Where did the jobs go? Overseas? Maybe. Or perhaps they just dissolved. We saw that happen often enough throughout the nineties and early two thousands, only now no new jobs are replacing them. Did I mention that we sacrificed offspring during those tumultuous years? We certainly can't depend on our children to work for us like we did for the boomers.
We didn't live like kings or even D list actors. We just used credit to maintain a reasonably comfortable existence minus the matching end tables. When I speak of the use of credit cards by my fellow slackers, I am not alluding to the sort of credit card debt that involves ridiculous sums of money, or the purchase of ludicrous luxury items. I merely refer to the use of credit that extends the paycheck beyond paying for utilities, day care, medical bills and so forth. The purchase of items such as the above mentioned couch, the upscale garments that our corporate boss insists we wear to work, but for which they don't offer commiserate wages to provide for them, and the list goes on and on. I know many reading this understand very well my meaning on this subject. How did we allow this to happen?
We fell asleep at the wheel (probably after pulling two shifts, and clawing our way back in the morning from the land of No Doze). While we toiled and struggled to pay bills, keep ahead of the interest on our credit cards, and rolled away from our mates too exhausted to procreate or fearful that we would be unable to provide for them, politicians stealthily pushed their beds together with the movers and shakers of Wall Street. No king sized beds. Too obvious. Twin beds look so innocuous, but will do the trick in a pinch. Had we been better rested, we likely would have detected the scuff marks from repeated moves as they shuffled from one suitor to another, and from bedside to bedside. As Madonna's fame rose an faltered, Boy George underwent drug rehabilitation, the face of government was slowly and inexorably altered. The rules governing our economy underwent the mother of all plastic surgeries as the movers and shakers of the boomer generation strove to insure the bounty of their golden years of industry were well protected. Their children will be well provided for, whilst we slackers mourn the lack thereof. Don't believe me, then check the census numbers for our generation. Look around you, and count how many of your friends didn't have kids. How many of your parents generation got away with having less than 2.5 children?
So, to refocus on Below books comment: the government could have and should have done something to prevent the recession from occurring in the first place. So why didn't the government intercede before everything came completely unhinged, and our Federal Reserve went nearly bankrupt? Because the American public wasn't involved in their government. Its tough medicine to swallow, but it is true. We must stop referring to the government of These United States of America in the third person. We cannot afford to refer to it as "that" government, or to our governing body as "those people." It is our government, we elect those who serve, and all citizens have the power to participate in it. Participating will not be easy. One will be rebuffed, ignored and just plain laughed at by some who think they cannot be dislodged from power. One citizen who seeks change will have to join with many, and watch the mechanisms of government closely to detect the flaws, and pin point the weak links. We will need to watch our polling places and insist on clean elections. We must avoid being mollified by the swift, and easy stroke of the pen, and search state and federal Congressional records to see if real action has been taken.
What if we turned all of the energy expended in years of job searching, pavement pounding and inputting keystrokes for credit card pin numbers, and joined the youth who did manage to be born to regain our government? We don't want to pound the wealthiest percentile in poverty, we just want to collect back some of that interest we paid over the years to make ends meet, when our paychecks failed to pay the bills.
Yes, we can wake up and realize that, while we made use of our easily accessible credit, frolicked on our Play stations and kept up with the latest in virus protection, our roads are crumbling, our air traffic controller computers need replacement, and our parents can't seem to find a doctor that will accept Medicare/Medicaid. We get it now, and it is never to late to make amends. If not for us, for our children, and for those who seek to pursue the American dream in the future. If we could convince the upper echelon to part with enough of that once productive capital to start up even a tenth of the businesses they once grew and nourished so lovingly in the eighties and nineties, we would all benefit. Oh, we will pay them dividends, just not as much. And we will insist that the health of the company, its customers (satisfaction guaranteed), and its employees will take precedence over the shareholder (investment is after all a bit of a gamble - right?). No more book cooking, profit ballooning, and impossibly complicated ledgers, just companies selling goods and services. And finally, those businesses stay in the United States. We the people, unmercifully lobby our state and federal legislatures and demand the implementation of regulations to even the playing fields in commerce, trade and finance. The very rich don't have to give up their retirements, they just have to pay us some long overdue back wages. No more shiny baubles, beads or trinkets to lure us away from what is real and can be passed on to our children. You don't see them accepting wages in the form of Visa, Master card, or American Express. The boomers lived and still live by the credo, "pay yourself first." We don't have to be quite as greedy, but we certainly could stand to benefit by adopting enough of that motto to ensure that our citizens can enjoy their full share of the dream.
Sunday, July 12, 2009
A Peek at How Your Insurance Dollars are Being Invested
http://ir.assurant.com/pressroom/releasedetail.cfm?ReleaseID=127821
The link above leads to an article about one health insurance company's role within its larger "umbrella" company.
I began researching the financial background of my insurance company after my health insurance premiums were raised 21% ($840) per year. My insurance company, which began as a health insurance provider for small business, merged with a larger multi-national in 2004, and operating under its umbrella.
Strangely enough, when the national and international financial markets began to falter, my rates began to rise. This is not a lone incident. Other health insurance companies operate in a similar manner. I hope this article may help expand the discussion on the merits of privately managed health care beyond talking points, and fist waving. I cannot fathom why the public would support the practice of having their money used for risky business ventures.
This quote, taken from the article I have posted a link to above says volumes about how our health insurance premiums are being used to prop up other investments in the financial market.
"The company [Fortis] said this transaction [The merger with Assurant] is consistent with Fortis' strategy in the United States to build and manage a select portfolio of specialty insurance businesses that are leaders in their respective markets. FFG will now be able to realize its full potential with Hartford Life, whose leading position in the U.S. variable annuities market and rising profile in the mutual fund business offer it a unique platform for future growth. This transaction will also enable Fortis, Inc. to focus more closely on new opportunities for its niche businesses - Assurant Group, Fortis Benefits, Fortis Family and Fortis Health - and in other high-potential specialty markets."
I am not opposed to growth; and, as I mentioned in my previous post, do not mind my money being invested wisely in slow growth, low risk markets if such an investment benefits holders of the policy.
Perhaps some useful questions to ask our representatives in state and national Congress might be:
1. What laws govern/regulate the use of our health insurance premiums? Those premiums are supposedly maintained in a pool of funds from which our bills get paid in the event we make a health insurance claim.
2. How is that pool protected? The FDIC protects our savings, and now potentially other retirement investments.
Can our health insurance investments be protected? Could those funds at least be better regulated?
Certain groups want Americans to focus solely on the private sector solution to health costs, but they seem reluctant to discuss details. Perhaps there can be a private sector solution, but not unless we expose the flaws and outright mismanagement that has all but bogged down private health insurance.
My final observation: Why do we call it Health Care Reform when what we are actually discussing is the method of payment? Where are the doctors, the nurses, the hospitals, the biotechnology reps and so forth? All we seem to hear about or from are the insurance companies, and they don't have any answers only higher premiums and deductible
Friday, July 10, 2009
Debunking the Myth Surrounding Health Insurance
Health care is one of the most misunderstood subjects in American politics and economics today. Many Alaskans, who pay millions of dollars into health care each year, do not realize that insurance companies place the client's hard earned dollars into a pool that funds the operation of other financial vehicles. Many, if not most of the for profit insurance companies, operate under the management of an umbrella company that manages investment brokerages, investment banking, mortgage insurance and other high risk institutions. When the high risk companies lose money, those costs get shifted back to the insurance company, and ultimately to the client.
My health insurance company recently raised my monthly premium. Their excuse: the cost of medical treatment had gone up. This tired, worn out, post 9/11 excuse needs to be debunked. If one looks closely at the national statistics for the cost of health care (bandaids, hourly wages for nurses, staff, etc.), the costs have not increased enough to account for the sharp increase in health insurance premiums. Senior care, while having risen as baby boomers deal with age related health issues, does not account for the increase as most of these individuals have been absorbed into medicaid/medicare. So what accounts for the increased health care costs to our health insurance companies? They are internal: investment losses from other companies operating under the umbrella company. The existence of these umbrella organizations were authorized with the passage of Graham, Leach, Bliley in 1999. If a sister company made a poor decision to underwrite insurance policies for bad home loans, the health insurance passed that cost to us. If the brokerage firm operating under the umbrella, took a beating in the housing market, the health insurance company took the blow. Our precious pool of money has been dipped into to stave off disaster for the parent company, and its subsidiaries.
Why? Simple. Because Americans need health insurance. The money generated by our premiums has produced a healthy financial resource, which has been used to augment losses. Are there any regulations in place to protect our funds? The income from our premiums keeps coming in, and in a high risk business venture, it provides stability.
Well, I don't support the use of my hard earned money to cover risky business ventures. I do not seek to turn a profit on my investment. My money should be sitting in a comfy, protected fund with millions of other insurers dollars, waiting for the day when I might need it. It shouldn't be floating around the globe propping up fly by night investment schemes. I don't mind that portions of the pool be invested in traditional, low risk financial vehicles in order that it may be carefully grown; however, I protest vigorously that it has been frittered away with not so much as a peep of protest from our government.
I blame the Bush administration for failing to oversee the insurance industry during a time when oversight was critical. Insurance companies all over America began wailing over losses from 9/11 even before the dust had settled. Were the losses truly from the insurance claims, or were they from the market that nose dived shortly after the towers fell? It can be reasonably argued that once again the fear and panic of 9/11 was used to fleece our pockets.
Here is a resource for anyone wanting to wade through the actual numbers and dollar figures for medical costs.
http://www.cms.hhs.gov/Nationa...
We need to smoke the insurance companies out. If we can't have a single payer system, then we can at least demand that health insurance companies be separated from the "umbrella of financial doom" under which they now operate. The same umbrella that we have paid billions to prop up. Many insurance companies are already in the process of doing so. Lets run the free loaders out of our health insurance pool. If they want a safe investment, they can invest in bonds. They already have the money from TARP. They can't be allowed to gamble our future away, then blithely demand that we pay more to cover for their poor investment strategies.
Lets clean 'em up. Move 'em out. I have a sneaking suspicion that if government turns its focus on what really lies at the bottom of "the terrible rise in the cost of health care," much good work could be accomplished.
Why do I care? I attended the inauguration in DC. Helping to shed light on the current ins and outs of the health insurance industry is my contribution to our President's effort to rebuild a government of which we can be proud. His election into office, gave great hope to my father who passed away from cancer in March. I watched him struggle with prescription bills near the end of his life. I have been mute with grief long enough. This is for you dad.
My health insurance company recently raised my monthly premium. Their excuse: the cost of medical treatment had gone up. This tired, worn out, post 9/11 excuse needs to be debunked. If one looks closely at the national statistics for the cost of health care (bandaids, hourly wages for nurses, staff, etc.), the costs have not increased enough to account for the sharp increase in health insurance premiums. Senior care, while having risen as baby boomers deal with age related health issues, does not account for the increase as most of these individuals have been absorbed into medicaid/medicare. So what accounts for the increased health care costs to our health insurance companies? They are internal: investment losses from other companies operating under the umbrella company. The existence of these umbrella organizations were authorized with the passage of Graham, Leach, Bliley in 1999. If a sister company made a poor decision to underwrite insurance policies for bad home loans, the health insurance passed that cost to us. If the brokerage firm operating under the umbrella, took a beating in the housing market, the health insurance company took the blow. Our precious pool of money has been dipped into to stave off disaster for the parent company, and its subsidiaries.
Why? Simple. Because Americans need health insurance. The money generated by our premiums has produced a healthy financial resource, which has been used to augment losses. Are there any regulations in place to protect our funds? The income from our premiums keeps coming in, and in a high risk business venture, it provides stability.
Well, I don't support the use of my hard earned money to cover risky business ventures. I do not seek to turn a profit on my investment. My money should be sitting in a comfy, protected fund with millions of other insurers dollars, waiting for the day when I might need it. It shouldn't be floating around the globe propping up fly by night investment schemes. I don't mind that portions of the pool be invested in traditional, low risk financial vehicles in order that it may be carefully grown; however, I protest vigorously that it has been frittered away with not so much as a peep of protest from our government.
I blame the Bush administration for failing to oversee the insurance industry during a time when oversight was critical. Insurance companies all over America began wailing over losses from 9/11 even before the dust had settled. Were the losses truly from the insurance claims, or were they from the market that nose dived shortly after the towers fell? It can be reasonably argued that once again the fear and panic of 9/11 was used to fleece our pockets.
Here is a resource for anyone wanting to wade through the actual numbers and dollar figures for medical costs.
http://www.cms.hhs.gov/Nationa...
We need to smoke the insurance companies out. If we can't have a single payer system, then we can at least demand that health insurance companies be separated from the "umbrella of financial doom" under which they now operate. The same umbrella that we have paid billions to prop up. Many insurance companies are already in the process of doing so. Lets run the free loaders out of our health insurance pool. If they want a safe investment, they can invest in bonds. They already have the money from TARP. They can't be allowed to gamble our future away, then blithely demand that we pay more to cover for their poor investment strategies.
Lets clean 'em up. Move 'em out. I have a sneaking suspicion that if government turns its focus on what really lies at the bottom of "the terrible rise in the cost of health care," much good work could be accomplished.
Why do I care? I attended the inauguration in DC. Helping to shed light on the current ins and outs of the health insurance industry is my contribution to our President's effort to rebuild a government of which we can be proud. His election into office, gave great hope to my father who passed away from cancer in March. I watched him struggle with prescription bills near the end of his life. I have been mute with grief long enough. This is for you dad.
Subscribe to:
Posts (Atom)
Posts
