Blue Shield of California proposes 59% premium rate hike

[Vinny1]

http://finance.yahoo.com/news/Blue-Shield-of-California-cnnm-2434756153.html?x=0

I see more people cancelling their health insurance in this country. How do insurance companies expect people and companies to keep paying huge premiums. It's probably one reason why companies are outsourcing to foreign countries; they don't have the huge cost of health insurance for their employees to deal with, which leads to more unemployment and more people without health insurance here in the U.S., a big snowball effect.

 

[abducens]

Premiums go up due to utilization and this year all preventative services must be covered at no cost to the patient per Obamacare. My wifes premium is up 50% over last years for the same basic copay/deductible. Medicare which controls all medical fees to some degree gave a 2.2% rate increase to providers.

 

[atrocious]

Quote from Vinny1:

How do insurance companies expect people and companies to keep paying huge premiums.

1) People have no idea what health care costs, I read a piece on CNN last year where small business owners were asked what a fair monthly premium was for all inclusive care, the woman said $50.

2) Insurance companies have some of the thinnest margins among business models, if there are trillions in corporate cash reserves out there why don't they flow into this untapped cash cow?

3) A significant portion of your premium is in effect a tax by way of government mandates for care you will never use.

 

[piezoe]

This is why the public option was needed as a cost control measure.

I don't know how margins are calculated in the health care insurance industry. A "thin" margin on many billions could be highly profitable in absolute dollars relative to operating costs. It's very hard to get detailed information, since the insurance industry is State regulated and exempt from Federal laws that other businesses have comply with. I do know the health insurance stocks have done well over the last fifty years and there was enough money made in the Mississippi Blues to buy all of the Board members a new set of alligator luggage. (seriously). I also know the Blues were sued in several States for falsely reporting actual costs to policy holders and basing co-pays on jacked up figures. (They lost). Insurance companies often negotiate discounts with providers but don't bother telling their policy holders what the discounted price is.

I am not a fan of socialized medicine. I'd like to see competition in health care. Presently the Medical care delivery "system" in the U.S. operates as a government protected cartel. The result is the highest health care costs in the world (by a fairly large factor), but not the highest quality of care. Until and unless the cartel is broken and competition introduced, things will only get worse. Obama care does very little toward breaking the cartel as far as I can determine. If we are going to have Obama care, then the public option is an essential component.

We are still headed toward a crises.

There are things that will eventually bring the U.S. to its financial knees. Among the most important, and also the least likely to be fixed in time to do any good are:

1) An out of control, government protected, medical cartel whose insatiable demand for more and more of the total economic pie can not be met for much longer.

2) Per capita military expenditures that are 14 times higher than those of other developed countries. (US $4000; Germany $279 per capita)

3) An incomprehensible and unadministratable income tax code with hundreds of billions of unreported private transactions escaping taxation altogether.

ironically #2 and #3 are paid only lip service while Social Security, a highly successful well-administered program is under relentless attack and the subject of all sorts of ridiculous myths. The only problem with social security, other than very minor adjustments to contribution rates and salary caps, is that the government does not have the money to pay the trust fund what it owes, having spent the money borrowed from social security on endless wars and out of control medical costs.

 

[Roark]

A premium rate hike of 59%? Ouch, that's going to leave a mark. Good thing it's not an election year. From the article, "Despite the steep double-digit hike, the insurer maintained it still expects to lose tens of millions of dollars on its individual healthcare business in both 2010 and 2011."

How does Blue Shield expect to make a profit? On volume? The US is like back in olden times, when there weren't any doctors. The only way to get decent affordable health care is to get airlifted out to some other country.

The health care solution for the US will be to give out copies of "Where There Is No Doctor" and tell everyone to learn how to perform their own appendectomies. This will also improve the outlook for social security because far fewer people will live long enough to ever collect it.

ps: A reader's five-star review of the book: Indispensable outside Europe and North America, May 11, 2001. And ten years later, it's now indispensable inside North America.