Comments on Advance Indiana™: Wellpoint Profits Drop; Health Insurance Premiums Soar

Obama says his "recovery plan will include UNPRECE...

2009-01-28T20:16:00.000-05:00

Obama says his "recovery plan will include UNPRECEDENTED measures that will allow the American people to hold [his] administration ACCOUNTABLE" yet Obama refuses to be held ACCOUNTABLE to the same American people for his UNPRECEDENTED refusal to show his actual birth certificate.

Gary,You are correct. For some time, health insur...

2009-01-28T13:56:00.000-05:00

Gary,

You are correct. For some time, health insurance premiums have been increasing faster than general inflation. This has caused many employers to discontinue providing health insurance benefits. The number of uninsured persons continues to increase. One of the largest causes of personal bankruptcy is uninsured health costs. Given the current economy, this can only increase.

The root cause of this conundrum is complex. Rather than write a book on the subject, let me say that the reasons includes government cost-shifting of Medicare & Medicaid expenses to employer-paid plans, less financial competition than we would like to see, those without insurance not paying providers, excess capacity, excessively expensive construction, the cost of high technology, an ageing population, and increased utilization by many folks.

Obama has a solution for all of this. Will we like it? Probably not.

Greg, The double digit increases occurred in the y...

2009-01-28T12:38:00.000-05:00

Greg, The double digit increases occurred in the years preceding the market meltdown. How do you explain those increases? What will happen is that more Americans will become uninsured than ever before as more and more businesses fail and lay off workers. That's why hospitals are already starting to lay off people. People don't have insurance to pay their bills.

Gary,Half of insurers’ profits have historically c...

2009-01-28T12:17:00.000-05:00

Gary,

Half of insurers’ profits have historically come from underwriting profits and half from the returns on their financial assets (legal reserves). Since most insurers’ reserves were invested in securities that have fallen in value, they must re-build them to meet regulators’ requirements. The fastest way to re-build them is to increase premiums.

Therefore, look for health insurers to increase premiums higher than usual and higher than what might be justified by medical economics. Not only is this going to be true for health insurers, but property and casualty insurers will try to increase premiums for the same reason.

Gary, at least we know that Anthem will continue t...

2009-01-28T09:25:00.000-05:00

Gary, at least we know that Anthem will continue the catastrophic policy for the city's self-insured employees in 2010 without holding the city hostage for a large increase in the premium. That was sarcasm. by the way.