Why A Pa. Insurer's Collapse Could Whack Insurers, Policyholders Across the Country

[TexasTowelie]

Among all the reasons for rising health insurance premiums, this one might be the most obscure: A long-term care insurer in Pennsylvania just went belly-up.

Health insurers across the country are on the hook for hundreds of millions of dollars in losses stemming from the recent insolvency of Penn Treaty American Corp., of Allentown, Pa., and its two subsidiaries.

Insurance company failures are rare, but when they happen, other companies are responsible to help pay off the company’s claims and protect policyholders through groups known as state guarantee associations. Those industry assessments are typically based on market share, so larger insurers pay more.

In these situations, long-term care coverage is treated as health insurance so health insurers are liable for the payments — and some are disputing that.

Read more: http://www.wisconsingazette.com/lifestyle/wellness/why-a-pa-insurer-s-collapse-could-whack-insurers-policyholders/article_c65b1c52-3278-56ab-ba63-ec7636f57c74.html

[Amishman]

1. The modern insurance industry is on thin ice, they are not positioned to absorb unexpected losses

There are all sorts of shell games going on to duck asset requirements.

The article below should alarm you, and if you really want to panic read up more on captive reinsurance

The short of it is that insurance companies are using shady tricks to let them invest premiums in risky assets.

https://mobile.nytimes.com/2015/04/12/business/dealbook/insurers-bypass-rules-to-add-hidden-risk.html

Transamerica is one of the worst offenders at this, don't ask how I know.

[rurallib]

4. Holy crap what an eye opener that was!

[Not Ruth]

2. One step closer to single payer

If all the insurers fail, instant single payer.

[rurallib]

3. My MIL has a long term policy with them

She had severe age related problems early in the year almost exactly at the same time as Penn Treaty declared financial problems.

Penn Treaty is currently paying their contract on her, but it was literally like pulling teeth to get them to pay.

As if her health problems weren't enough, having this crap happen with Penn Treaty almost sent my SIL over the edge.