First victim of health care overhaul?

[dtotire]

First victim of health care overhaul?


A Virginia-based insurance company says "considerable uncertainties" created by the Democrats' health care overhaul will force it to close its doors by the end of the year.

The firm, nHealth, appears to be the first to claim that the new law has driven it out of business. "We don't know what the rules are going to be and, as a start-up, our investors need certainty," nHealth CEO and president, Paul Kitchen, told POLITICO. "The law created so much uncertainty that is beyond our control."

In a letter to the company's 50 or so employees last week, executive vice president James Slabaugh said nHealth has stopped accepting new group customers and will terminate all business by Dec. 31, 2010.

"The uncertainties in the regulatory climate coupled with new demands imposed by national healthcare reforms have made it challenging to sustain the level of sales required to remain viable over the long run," Slabaugh wrote.

The company's finger-pointing — first reported by Richmond Biz Sense — must be read with caution: For years now, health insurance brokers and employers alike have struggled to keep pace with steeply rising health care costs.

Asked about nHealth's decision to shut down, a White House aide cautioned: "It's difficult to comment on this case without fully evaluating the company in question."

Read more: http://www.politico.com/news/stories/0610/38194.html#ixzz0qBMAwN52

[SPedigrees]

1. So long, nHealth. Don't let the door hit ya.

If enough insur cos went under it might pave the way for expanding medicare.

[joeybee12]

2. I don't know...seems to soon to know the level of shittiness this so-called HCR

will accomplish.

[krispos42]

3. Ah, the sense of entitlement

"I'm an insurance company. I'm ENTITLED to 10% annual profits under all circumstances, and my executives are ENTITLED to 6- and 7-figure annual bonuses, also under all circumstances! And if we can't get that, we're taking our toys and going home!"

*stomps feet*


Well, the "free market" will replace this company with somebody else with a weaker sense of entitlement.

[bluestateguy]

4. It's not like they're a real company

They are an insurance company. They make their money by denying people care, so seeing them go belly up is a good thing.

[Statistical]

5. Or it will drive all all the players but maybe the three or four largest.

Of course we know less competition always means lower prices.

[Bonhomme Richard]

6. "as a start-up, our investors need certainty" How new is this company?

If they are a startup then sure, the investors want to know about returns. So I guess the investors pulled out, but not because of the new plan but rather a poor business model that wouldn't return their investment at a high enough return.

[lumberjack_jeff]

7. Your business failed because your VC's bailed on you.

It happens.

[kctim]

8. Only the first of many to come

[Coyote_Bandit]

9. An insurance company with only 50 employees?

Assuming they contract out all their janitorial, claim adjusting, actuarial and legal services - including rate and form filings - that would still be a small company likely writing a very small book of business.

Those 50 employees would include all the secretaries, receptionists, file clerks, data entry personnel, IT folks, accountants and reinsurance accountants, mail clerks, underwriters, claim handlers (who set reserves, verify coverage, assign independent adjusters, maintian files and issue payments), mail handlers, agent licensing and agent relations folks, complaint handlers and managers.

This company doesn't have the resources (historical data, personnel, industry guidance and likely industry research which must be purchased) to assess what their risk exposure will change.

The company is a start-up company with investors. Share ownership likely isn't traded. Any venture capital investors may have retained the right to withdraw a portion of their funds. Or they may have been required to make personal financial guarantees on behalf of the company. The rules have changed since the business was started. They don't have a way to measure how that will affect them and they have the opportunity to get out. Lots of reasons for them to do so.

This isn't about healthcare reform it's about start-up business strategy.

[Scuba]

10. Good. Because health insurance...

...executives are mass murderers for profit anyway.

[rucky]

11. nHealth should blame its marketing department for its failure.

sounds like they wanted to be the iPod of health insurance.

[damntexdem]

12. Oh, boo hoo hoo.

And, hey, my pet crocodile is also crying for nHealth.

[sinkingfeeling]

13. I just keep forgetting that corporations are now people. Bye, first 'victim'.