ObamaCare was supposed to stop this sort of thing, wasn’t it? That’s how Pelosi, Obama et al sold the law, but its plain effect has been to hike taxes and rates.
Health insurer Blue Shield of California wants to raise rates as much as 20% for some individual policyholders, prompting calls for the nonprofit to use some of its record-high reserve of $3.9 billion to hold down premiums.
In filings with state regulators, Blue Shield is seeking an average rate increase of 12% for more than 300,000 customers, effective in March, with a maximum increase of 20%.
Some consumer advocates and healthcare economists say Blue Shield shouldn’t be raising rates that high when it has stockpiled so much cash. The company’s surplus is nearly three times as much as the Blue Cross and Blue Shield Assn. requires its member insurers to hold to cover future claims.
Some officials want Blue Shield to dip into its reserves to avoid hiking rates. But the reserves are there for emergencies.
At Blue Shield of California, based in San Francisco, reserves have jumped 77% since 2006 from $2.2 billion to $3.9 billion in September. That has outpaced the company’s 19% growth in annual revenue since 2006.
Blue Shield said its reserves have nothing to do with rate increases, and that money has been put aside for the future benefit of its policyholders.
“Reserves are needed to ensure our members’ claims can be paid no matter what,” said Blue Shield spokeswoman Lindy Wagner. “We need them to protect against uncertainties like a pandemic or another crisis.”
The company also expects higher costs from an influx of new customers under the federal healthcare law in 2014.
“It’s a once-in-a-lifetime change in the healthcare market that will bring a lot of volatility, and we need higher reserves for that,” Wagner said.
The push toward single (government) payer gets a shot in arm from this, naturally. All part of the plan.
Not to mention, but when the big one hits, and it will hit California someday, there will be claims that need to be paid. You need to have reserves in high risk states.
They bought it. They own it. T.S.
– just sound actuarial practice.
“…use some of its record-high reserve of $3.9 billion to hold down premiums.”
So in effect what these people are asking Blue Shield to do is not have any funds left to pay claims? You have got to love the illogic of the Left.
“Hey! Use your reserves to hold premiums down but if you don’t cover people’s health bills we’ll curse you too!”
Business is just damned in this country.
Oh and by the way HAVING RESERVES IS A REQUIREMENT OF STATE REGULATIONS.
Obama should have just grown a brass pair and nationalized healthcare. Instead we have this discombobulated mess. It will not end well for anyone.
Here’s hoping Da Peeples Republik De Kalifornica enjoys a nice dose of that steaming pile known as Obamacare.
They voted for it, let ‘em have it good and hard and sideways!
Really, theres no news in the story. Health care insurance companies have been raising annual rates almost from their inception. Whether exclusively private sector, a hybrid private and government partnership or an exclusive government run system, the cost of health care will see annual cost increases.
The only chance of any change will come if and when the people in the health care industries practice according to some actual hipocratic oath to provide healthcare with a great cause then achieving great personal wealth. Good luck on that on ever happening!
There is one big difference now that we didn’t have before.
We are now all MANDATED by law to have to purchase health insurance, so we are all captive clients of these corporations.
Funny, I always heard from the leftists that they were anti-corporation yet their Obamacare law was practically written by the industry!
Actually Scottch, theres a few million people who escape the snare.
Had we never had such a thing as mandated employer paid healthcare we would not be in nearly the mess of today. Health care costs would then have been regulated by the free market like it once was and worked very well in large parts of the country. We can thank once again, the labor unions with their employer paid mandates for screwing up and corrupting healthcare in all corners of the industry.
I don’t know what would be rational solutions to todays healthcare problems.
Regarding a “rational solution”, I hate to say it but the best course of action may really be to let the system crash and burn.
Not the insurance industry, of course, as they will always get theirs no matter what due to the cozy relationship these corporations have with the administration, but rather the health care industry.
They have been set up to fail, and perhaps failing or not even trying rather than making an effort to make this arrogant mandate work at all is the best option.
My dad told me something interesting once regarding horses and mules. He grew up in the depression era and they were literally using horsepower to farm with.
He said a horse would work itself to death if you pushed him hard enough. A mule, on the other hand, was smarter. He would only work up to a point and then he would stop no matter how hard you tried to work him harder.
He was smart enough not to work himself to death.
Perhaps the health care industry could take a lesson?
If they figure out how to make this Obamanation work, however imperfectly, it will never go away. If they knowingly allow the system to grind to a halt then the outcry might finally be loud enough to be heard by our overlords in Washington, DC.
Before health care insurance, everybodys health care was defined by the patient and their doctor. After health care insurance, health care was defined by the insurance company and the patients doctor along with lifetime caps. Bottom line? You pay for “health care” insurance and recieve only limited health care as defined by the insurance companies. A government provided system offers nothing more than the traditional insurance companies system; probably less and only a ‘single payer’ to doctors for services rendered! Today, the majority of doctors enter the professional as a means to personal wealth and little to do with any theory of some hippocratic oath which by the way is not mandatory by the profession but rather some of the academic institutions graduating doctors.
The entire industries of health care are so corrupted by $$$$ I’m not sure there is any solution other than what health care was before insurance companies came along.