Quote from mgookin:
Amen!
The following is my experience/ perception of the insurance industry in America. If anyone can provide evidence to the contrary I would enjoy seeing it.
I used to pay $500/ month for health insurance. If I went to the doctor that month my copay was $50 when the cash price was $40. I asked if they would just not run it through my insurance and they told me that "due to your contract with Blue Cross Blue Sheild we have to charge you the $50." That is fraud all the way. Are there kickbacks going on here? BCBS pays nothing and I pay 25% higher then the cash price because I DO have insurance. Who is BCBS and where are their financials? Any research just says BCBS is a consortium of insurance companies, yet they fail to disclose who they are and where the financials are. If anyone can uncover financials on BCBS I would love to see them. I choose to self insure today. Fortunately I have many friends who are doctors.
AIG recently defended their "profitable" business plan saying of all the auto insurance in CA they keep 65% profit. That's AFTER all their overhead, diversion to investments, hyper salaries, sales comissions, dividends, golden parachutes, etc. How do they get away with profits like this on something that is mandated by law?
In Florida many people who have owned their homes for 15 or more years are paying nearly 10% per year of what they paid for the home in insurance costs. If the homeowner's insurance company excludes wind and flood, what perils are they insuring? And if they don't insure the riskiest perils, why then are rates so high? They should be LOWER.
In the year that Hurricane Andrew occurred (1992?) Allstate made a "goodwill" payment to Sears for the office space they occupied saying they had never paid any "rent". By pure coincidence they reported that they "lost" $200MM that year and had to raise rates. So they broke even one year - BFD - that's the risk you take being the insurer. Where in the ten comandments does it say "Thou insurance company shalt make huge profit every year."
Aside from CDS, fraud by insiders or otherwise, show me an insurance company that does not make money. There have been a couple of reinsurance companies fallen due to major catastrophe but compare that to any other industry - banking, airlines, etc. and it's nearly nil.
Why is one of the richest men in the world (Warren B) into insurance and reinsurance? Because you CAN'T LOOSE being an insurer in America. All the crooked money put into campaigns and lobbying buys them anything they want.
And anyone who does not think the University of Colorado is not on the take by the insurance companies who make BIG profits off those hyped up and always inaccurate hurricane forecasts is in LSD land. Ask the University of Colorado if they get funding from insurance companies and they won't answer you. There have been many inquiries unanswered. If they have nothing to hide then why don't they respond to inquiries?
What's the answer here? Insurance cooperatives where unused premiums are returned to policy holders in the form of dividends or credits to future coverage as is done in the Florida roofing industry workmen's comp coverage. Their costs were so high nobody could afford it so they banded together and cut the insurance companies out of it. Premiums went from 300% of wages to 30% of wages - a savings of 90% and the cooperative is 100% solvent. Why? They don't pay what private and public insurance companies pay in the forms of overhead, diversion to investments, hyper salaries, sales comissions, dividends, golden parachutes, etc.
So why then can't we have insurance cooperatives for home, auto, business, etc.? It's because of all the corruption in the industry in America. Let Allstate or BCBS find out you want to start an insurance cooperative for home, auto and health insurance and see what resistance you get from politicians who get bribed every day by these big companies.
After taxes (income, sales, gains, dividends, etc.) what is your next highest cost if you insure auto, home, life, health? It's insurance and insurance companies bribe politicians to make sure you have lots of it at high premiums.
When you look at deductibles and copays, you are the primary insurer. It's the first dollar that costs the most to insure and that's why insurance companies won't pay it. Then they buy reinsurance with your money so they don't insure excess payments. So the insurance company only insures the middle money and they know damned well how to exploit that.
