Liberal, Irreverent

Tuesday, February 23, 2010

The 40% health premium hike shame

The 40% health premium hike shame

I am sure WellPoint/BlueCross actuaries have their claim numbers,
expense numbers, profits, etc lined up to justify its 40% increase.
However, it would be good to examine the expenses line that are
included in the rate determination.

When you consider that the CEO is getting $24 million; the lobbying
arm (AHIP) alone is getting $20 million; and who knows how many more
millions go to other lobbying activities, marketing, plus the
airplanes, luxury offices, bonuses, etc., then you can get a picture.

Maybe the economic condition has caused deterioration in the market as
WellPoint/BlueCross states, but it surely has not caused deterioration
in the excesses of the health insurance industry.

Underlying healthcare cost inflation was 10-15% in 2009 which is far
less than the 40% WellPoint/BlueCross is asking for. So, what
justifies the other 25-30%? You are right, the other expenses that are
not related to healthcare cost inflation: admin and profit.

Judging for the amounts of money health insurers are paying to their
CEOs and the amounts they are spending in lobbying, it is not
surprising why they want to jack premiums 30% on top of what
healthcare inflation justifies.


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