As health care reform stalls, insurers rake it in

[heli]

http://blog.nj.com/njv_john_farmer/2010/02/as_health_car_reform_stalls_in.html

As health care reform stalls, insurers rake it in
By John Farmer/The Star-Ledger
February 14, 2010, 5:36AM

You’ve got to doff your hat to the grand poobahs of the American insurance dodge. For pure political chutzpah, they’re the tops. With the public teed-off at health care costs and Democrats in Congress hot after them, the imams of insurance have decided to meet the threat not by cutting premiums and broadening coverage but by raising the former and reducing the latter. The immediate target of the Obama administration is a California health insurer, Anthem Blue Cross, which raised its rates by up to 39 percent... Health and Human Services Secretary Kathleen Sebelius was left scratching her head over the increase. "It remains difficult to understand how a company that made $2.7 billion in the last quarter of 2009 alone," she said, "can justify massive increases that will leave customers with nothing but bad options" — higher premiums, less coverage or no coverage at all...

But Anthem’s not alone. Five health insurers racked up a combined profit of $12.2 billion (that’s B as in Bloated) last year, according to a new report from the liberal-labor coalition Health Care for America Now based on corporate filings with the Securities and Exchange Commission. The companies were WellPoint (Anthem’s parent), Cigna, UnitedHealth Group, Aetna and Humana. At the same time, critics contend, the insurers pushed hard last year to get rid of the most costly customers, including small businesses with lots of older workers...

Two things stand out in the exchange between Sebelius and spokesmen for the health plans. First, to hear industry flacks tell it, the health insurance plans in question are barely surviving, poor souls, with profits at or below those of rivals. Second, the federal government, for all Sebelius’ handwringing, has little power to rein in the insurance giants. The insurance industry is one of the lucky few that enjoy exemption from federal antitrust regulation, an enormous and incomprehensible loophole in view of the power the insurance giants exert over American life... The question remains: Why did Anthem et al. raise premiums at a point when the industry is desperate to head off any new federal health insurance plan — or, worse yet, a battle in Congress over its cherished antitrust exemption?

Two reasons seem likely. One is that the industry has decided to jump the gun on any possible federal reform and raise rates preemptively just in case. The other is that its grip on Congress, especially on Republican members, is so strong the industry has no fear of any federal crackdown. Which is it? The best guess is a combination of both. The insurers need no special reason to raise rates; they do it regularly almost every year — responding to health care cost increases and contributing to them at the same time. It’s a standard business practice — the use of any cost increase to boost the profit margin. And, if recent history is any gauge, the insurers have little to fear from Congress. The place seems at times a wholly owned subsidiary of the industry titans.

[Enthusiast]

1. Maybe they understand

that their investment in political control will pay the dividends of giving them anything they want.

[Triana]

2. If there was ever an argument for slamming them with antitrust (and other) regulations...

...this is it.

Too bad there is no political will for it. Bend over...

[NorthCarolina]

3. They begin the process of recouping $$ spent fighting health care reform. nt