ECON An insurance company will be closing....

TECH32 · Nov 8, 2009

I've mentioned up here a few times one of my oldest friends is pretty high up in Wall St. (big bank/brokerage house - NOT one that was bailed out - you'd all know the name).

Well, I had dinner with him last night and he told me that on Monday he was going to order one of the mid-sized health insurance companies his fund owns to start shutting down. He said "There's just no way we can stay in this business with the bill Congress passed. The numbers don't work. It'll bankrupt the company in under two years and we'll lose less money by shutting it down now that we would if we tried to stick it out."

Let me tell you, he was really upset by this. Not so much that they were going to take a financial hit, but that thousands of people would be losing their jobs, and tens of thousands more would be losing their insurance.

I expect other companies will be making similar decisions in the near future...

Wild-T2 · Nov 8, 2009

TECH32 said:
I've mentioned up here a few times one of my oldest friends is pretty high up in Wall St. (big bank/brokerage house - NOT one that was bailed out - you'd all know the name).

Well, I had dinner with him last night and he told me that on Monday he was going to order one of the mid-sized health insurance companies his fund owns to start shutting down. He said "There's just no way we can stay in this business with the bill Congress passed. The numbers don't work. It'll bankrupt the company in under two years and we'll lose less money by shutting it down now that we would if we tried to stick it out."

Let me tell you, he was really upset by this. Not so much that they were going to take a financial hit, but that thousands of people would be losing their jobs, and tens of thousands more would be losing their insurance.

I expect other companies will be making similar decisions in the near future...[/QUOTE]

Bet on it.....It also my be the only way to get these traitors to listen to us....Go Galt time.

Garf · Nov 8, 2009

"Insurance industry practices such as denying coverage because of pre-existing medical conditions would be banned, and insurers would no longer be able to charge higher premiums on the basis of gender or medical history. The industry would also lose its exemption from federal antitrust restrictions on price fixing and market allocation."
http://apnews.myway.com/article/20091108/D9BREBKG1.html

For sure there will be more. No insurance company can operate under those rules.
Think of your auto insurance company, or life insurance company trying to operate under those rules.

Have an accident, and then go to buy auto insurance.
Have a spouse die, and then go to buy life insurance for them.
(pre-existing conditions.)

Anybody think it's OK if a person that has a long history of accidents, be able to buy auto insurance for the same price as the driver (maybe you) who is accident free? (history)
The only way the insurance company could possibly, and profitably, follow that rule is to increase the price across the board for everybody.
And bank on it, that's what will happen with those who don't totally throw in the towel.

gelatinous · Nov 8, 2009

This is exactly what Obama wants. The complete shut down of all insurance companies and the government take over of the medical industry.

He's almost there.

dstraito · Nov 8, 2009

The sad thing is that most people don't realize is that Insurance companies usually only make a single digit return on their investment, a majority in the 3-5% range. That should not be considered excessive by a rational person.

The measures they will put into place WILL guarantee the only insurer that will be able to exist is one that does not care about profit (ie; the Government, think Single Payer Public Option only).

The quality of care WILL go down.

The cost for everyone WILL go UP.

The amount of Governmental Control increases exponentially.

We WILL be worse off than we were before.

YESSIR, thanks for the change you promised, I guess you never said it was change for the better.

Seeker · Nov 8, 2009

Why is anyone unable to understand natural consequences? I don't understand . . . that!

Sharon · Nov 8, 2009

Thank you so much Tech for reporting this.

DH and I have Kaiser Permanente. In the last two weeks we've seen a lot of what they are calling "restructuring" and we've received a letter in the mail stating they are possibly losing a LARGE contract!

As many of you know, DH has lung cancer so we are always either calling the doctor's office or visiting.

In the last two weeks Kaiser has done MAJOR restructuring. For a few days we couldn't even get a call into or a call from the office because of this restructuring. The advise nurses will now be in a call center.

We received a letter stating that Kaiser and Wellstar may end their contract, a major deal here in Georgia.

There seems to have been a lot of changes and I've been wondering if these changes had anything to do with this new proposed (hasn't passed Senate yet) health bill.

Just wondering

CelticRose · Nov 8, 2009

My DH and I are covered under Tricare (the military insurance for both active and retired military and their dependants) which as three level: Standard, Extra and Prime as well as 'Tricare for Life' for retirees and their dependants 65 or older.

In CA we opted for Tricare Prime and as we were both healthy, only used the base clinic for general annual physicals.

When we moved to MN, there were, at that time, no doctors, clinics or hospitals that contracted with Tricare Prime, so we would then have to access medical care using Tricare Standard. Since money was tight and the costs in the small town we lived in, were actually HIGHER than in metro areas (which I found out the one time I tried to use Tricare Standard and they returned the claim stating that the clinic charged 10 TIMES the approved rate for office visits!!!!); I decided to just rough it and deal with helaht problems at home ....... Duct tape, BTW makes a very durable wound cover, with gauze and in some cases, a great butterfly bandage )

Anyway .... Once DH was rated 100 s/c disabled, I was covered for health care under CHAMPVA and was able to get basic health care at the VA; which I avoided because unless it was critical, I didn't want to use resources which I felt should got to actual vets.

Anyway .. Here in FL no problemo using Tricare Prime or Tricare-for-Life for my DH. We pay about $400 for my annual premium plus a co-pay (depending on the service) and get our RX's filled using a contracted mail order pharmacy.

We both love Tricare (currently handled by Humana.. But who knows what will happen with them ) and this allows my DH have private doctors instead of using the VA for all his health care. WHich, because of the returning vets and for an incredibly IMMENSE impact by retirees and snowbirds who in some cases can't afford private covereage or simply don't have it; access the local VA is very, very difficult. And if the patient (as in my husbands' case) has numerous, significant health issues, it's all but impossible to maintain a consistent level of care. WHich is a 180 from what we'd experienced in MN and ND. Both had 4 star wonderful VA hospitals / clinics and the best of the best, IMO, medical staff!

Anyway .... It's very likely that the annual premium for my Tricare Prime might got to $3,000 a year, plus there's talk of increasing the cost of Tricare-for-Life for retirees over 65. As well as requiring premiums for active duty, along with co-pays if they can't access health care within the military system (on base for example) and have to use a contracted private provider.

What the government giveth, they can taketh away. Of course, taking from those who have served their country, with honor and sacrifice, in order to give to those who are here illegally OR those who are too frickin lazy to work........ well I can see whay the current regime would be willing to screw the military .......

I worry about my husband because it's a balancing act to keep him as healthy as possible .. Myself, I get annual physicals and thus far, am healthy. With luck, my days of messing up dicks and thrashing rotor cuffs, are history

If the current regime or any administration was truly serious about making health care more affordable; they'd start with TORT REFORM!!!!!! I've seen far too many people who abuse the system and seen far too many who sue when there really wasn't any reason to, other than pure greed.

Countrymouse · Nov 8, 2009

TECH32--

If your friend identified for you exactly "which" medium-sized insurance company, would you be willing to post that in the Bomb Shelter?

I think it definitely qualifies for there.

Thanks,
CM

TECH32 · Nov 8, 2009

Countrymouse said:
TECH32--

If your friend identified for you exactly "which" medium-sized insurance company, would you be willing to post that in the Bomb Shelter?

I think it definitely qualifies for there.

Thanks,
CM

Nope. He didn't tell me and I didn't ask. I never ask specifics when we talk about stuff like this. I wouldn't want it to cost him his job if it became public knowledge before it was supposed to.

Hacker · Nov 8, 2009

Interesting . . . this does not become law until the Senate passes it and Zero signs it. Does he know something that we do not know?

Countrymouse · Nov 8, 2009

Oh, I think we all 'know' what's going to happen--barring a miracle.

This Juggernaut will be d*** near impossible to stop.

We are witnessing the last days of Rome, redux.

night driver · Nov 8, 2009

Hacker said:
Interesting . . . this does not become law until the Senate passes it and Zero signs it. Does he know something that we do not know?

The good ones are PROACTIVE not REACTIVE.

Red Baron · Nov 8, 2009

gelatinous said:
This is exactly what Obama wants. The complete shut down of all insurance companies and the government take over of the medical industry.

He's almost there.

Yep, that's the plan, Stan!

What I find remarkable is the complete lack of -any- reforms proposed by the Country Club, Chamber of Commerce wing of the Republican Party.

There have been abuses by the insurance industry. But not one reform by the Pubbies. Nothing, not even a tiny little bone to appease the masses.

Dems rolled the Pubbies.

And now look where we are at.

Volleyball Granny · Nov 8, 2009

Hacker said:
Interesting . . . this does not become law until the Senate passes it and Zero signs it. Does he know something that we do not know?

I would want to get out of the business on my terms--not 0's terms. Look what happened to the investors in the auto industry.

Sharon · Nov 8, 2009

night driver said:
The good ones are PROACTIVE not REACTIVE.

That's what I think DH and I are experiencing with Kaiser. We see the doctor again on November 20th. It'll be interesting to see if there are any more changes and if I get the chance I'll ask the doctor, but chances are we'll be discussing other subjects.......

jesner · Nov 8, 2009

dstraito said:
The sad thing is that most people don't realize is that Insurance companies usually only make a single digit return on their investment, a majority in the 3-5% range. That should not be considered excessive by a rational person.

If they are so poor, how can they justify the stock options and the high salaries for executives.

The United Healthcare Exec made 100 MILLION DOLLARS when he exercised his stock option and bought 4,875,000 shares of stock at $8.72 per share and sold only part of it the SAME DAY for $28.94 per share.
http://biz.yahoo.com/t/09/3973.html

I think they're stripping these companies and crying poverty. IMHO

TECH32 · Nov 8, 2009

jesner said:
If they are so poor, how can they justify the stock options and the high salaries for executives.

The United Healthcare Exec made 100 MILLION DOLLARS when he exercised his stock option and bought 4,875,000 shares of stock at $8.72 per share and sold only part of it the SAME DAY for $28.94 per share.
http://biz.yahoo.com/t/09/3973.html

I think they're stripping these companies and crying poverty. IMHO

They don't have to justify it. That's the deal the exec made when the board hired him/her. If the shareholders disapprove, they can dump the board.

As to stock options - that's what they're THERE for. To give execs an incentive to bring the stock price up so they can make a pile of money ALONG WITH the company's investors.

Grantbo · Nov 8, 2009

TECH32 said:
Well, I had dinner with him last night and he told me that on Monday he was going to order one of the mid-sized health insurance companies his fund owns to start shutting down. He said "There's just no way we can stay in this business with the bill Congress passed. The numbers don't work. It'll bankrupt the company in under two years and we'll lose less money by shutting it down now that we would if we tried to stick it out."

Why would he do this on Monday when only the House passed their version? There is a long way to go before this bill is a done deal. The compromise may not be anywhere close to what the House is pushing? If he closes down the business and the bill eventually fails then will he still be in his leadership position?

Hfcomms · Nov 8, 2009

Unless if the man realizes that the deal with the devil has already been done. What we see over the next few weeks will just be the frosting on the cake and going through the motions to make it look good. They are going to ram this thing through come hell or high water exactly the way they did the bailout bill.

Sharon · Nov 8, 2009

And I believe they are being proactive.

TECH32 · Nov 8, 2009

Grantbo said:
Why would he do this on Monday when only the House passed their version? There is a long way to go before this bill is a done deal. The compromise may not be anywhere close to what the House is pushing? If he closes down the business and the bill eventually fails then will he still be in his leadership position?

You don't turn off a company overnight. It takes many months. If things change or the bill is defeated in the Senate I'm sure he'll have the opportunity to put the brakes on.

Sharon · Nov 8, 2009

TECH32 said:
You don't turn off a company overnight. It takes many months. If things change or the bill is defeated in the Senate I'm sure he'll have the opportunity to put the brakes on.

This may be why DH and I are already seeing changes (they are calling it restructuring) at Kaiser. Maybe not, but makes me wonder!

Red Baron · Nov 8, 2009

Volleyball Granny said:
I would want to get out of the business on my terms--not 0's terms. Look what happened to the investors in the auto industry.

The bondholders, who accept the real risk, were completely and illegally left in the lurch.

It's Socialism run amok.

Richard · Nov 8, 2009

Garf said:
"Insurance industry practices such as denying coverage because of pre-existing medical conditions would be banned, and insurers would no longer be able to charge higher premiums on the basis of gender or medical history. The industry would also lose its exemption from federal antitrust restrictions on price fixing and market allocation."
http://apnews.myway.com/article/20091108/D9BREBKG1.html

For sure there will be more. No insurance company can operate under those rules.
Think of your auto insurance company, or life insurance company trying to operate under those rules.

Have an accident, and then go to buy auto insurance.
Have a spouse die, and then go to buy life insurance for them.
(pre-existing conditions.)

Anybody think it's OK if a person that has a long history of accidents, be able to buy auto insurance for the same price as the driver (maybe you) who is accident free? (history)
The only way the insurance company could possibly, and profitably, follow that rule is to increase the price across the board for everybody.
And bank on it, that's what will happen with those who don't totally throw in the towel.

Will any Democrat care to comment, I made some remarks about pre-existing conditions being banned and bankrupting insurance companies as soon as I heard it some weeks or months ago, no-one seemed to cotton on, takes a long time to sink in.

Usually Curious · Nov 8, 2009

Garf said:
"Insurance industry practices such as denying coverage because of pre-existing medical conditions would be banned, and insurers would no longer be able to charge higher premiums on the basis of gender or medical history. The industry would also lose its exemption from federal antitrust restrictions on price fixing and market allocation."
http://apnews.myway.com/article/20091108/D9BREBKG1.html

For sure there will be more. No insurance company can operate under those rules.
Think of your auto insurance company, or life insurance company trying to operate under those rules.

Have an accident, and then go to buy auto insurance.
Have a spouse die, and then go to buy life insurance for them.
(pre-existing conditions.)

Anybody think it's OK if a person that has a long history of accidents, be able to buy auto insurance for the same price as the driver (maybe you) who is accident free? (history)
The only way the insurance company could possibly, and profitably, follow that rule is to increase the price across the board for everybody.
And bank on it, that's what will happen with those who don't totally throw in the towel.

So by your logic I should actually pay LESS in premiums, because even though I am a woman of child-bearing age I DO NOT use maternity coverage and have no history of complications in delivery or infants with expensive care. BUT that's not the way it is. The insurance companies charge me twice what they charge my husband simply because of my age.

Y2kO · Nov 8, 2009

Red Baron said:
Yep, that's the plan, Stan!

What I find remarkable is the complete lack of -any- reforms proposed by the Country Club, Chamber of Commerce wing of the Republican Party.

The Republicans had their alternative insurance plan. It was voted down yesterday, just before they passed the Pelosi plan.

Volleyball Granny · Nov 8, 2009

Grantbo said:
Why would he do this on Monday when only the House passed their version? There is a long way to go before this bill is a done deal. The compromise may not be anywhere close to what the House is pushing? If he closes down the business and the bill eventually fails then will he still be in his leadership position?

I repeat: I would want to get out of the business on my terms--not 0's terms. Look what happened to the investors in the auto industry. If he closes down the business and the bill fails then he can just buy another insurance company--or build a new one.

It's my opinion that the PTB are blackmailing people into voting for the bill. If that's true (it seems to be the popular modus operandi), the bill will pass the Senate. Of course, it could fail if enough Senators stand their ground.

Along that line of thinking, we need to show support for anyone who will vote against the bill--even if we hear stories of nefarious deeds. Let them vote, then look into legal action. Of course, considering the criminals surrounding the Prez, it's hard to imagine anything worse.

Garryowen · Nov 8, 2009

What I find remarkable is the complete lack of -any- reforms proposed by the Country Club, Chamber of Commerce wing of the Republican Party.

The Republicans have introduced about 30 different proposals, but they did not include the "public" option. The Democratic leadership refused to consider them as viable options, or as worthy of debate.

Considering their response to public input on the bailouts, this should take no one by surprise.

regards,

Garryowen

CRodgers · Nov 8, 2009

To be honest I think they are acting rash. This has not passed the senate and until it does, that bill is meaningless.

From everything I am reading even from other demo's in congress, it has a snow balls chance of making it in as it stands right now.

Garf · Nov 8, 2009

Usually Curious said:
So by your logic I should actually pay LESS in premiums, because even though I am a woman of child-bearing age I DO NOT use maternity coverage and have no history of complications in delivery or infants with expensive care. BUT that's not the way it is. The insurance companies charge me twice what they charge my husband simply because of my age.

Well of course they may charge differently depending on age. Auto insurance does that too. So does life insurance. Age makes a difference. And that's the point.
They charge more if their experience is that with that group they have to pay out more.
Not sure how it works in the US, but here with auto insurance, there are rates based on age, and then it's further broken down by class. I'm presuming it's about the same there. My auto insurance rates went down when I turned 50 and then again when I turned 55 and again at 60.
("class" being driving record class, not societal class :lol:

)

But if I were wondering why my insurance company was charging me double what they were charging someone else, I would at least ask them why. If they couldn't give me an answer, I'd be changing companies.

PresterJohn · Nov 9, 2009

Financials. Insurance. Real Estate.
| | |
Cooked | Cooked
|
On it's last legs: about to be cooked.

Financials: Cooked.
Insurance: About to be cooked
Real Estate: Cooked.
______________________________Edited.

Ravekid · Nov 9, 2009

TECH32 said:
As to stock options - that's what they're THERE for. To give execs an incentive to bring the stock price up so they can make a pile of money ALONG WITH the company's investors.

Yes. Plus, anyone can be an investor in a company. Health care is coming. The people of this country are way, way too demanding on having government, or someone else, run their lives. Think about it, we have tens of millions living on cradle to the grave welfare. This population will only grow, until the massive incidents of civil unrest come and thousands upon thousands die in the process. That is the way of human nature.

As such, national healthcare is a done deal in my eyes. It might not happen this year, but it will come. The "Republican" that was elected as gov of NJ isn't a conservative, he is a status quo statist. The conservative candidate lost in NY as well. Face it, there won't be a conservative backlash like some folks think. It won't happen till _after_ folks give away all their freedoms to their government, the government screws them, then refuses to change via the process.

Until the crash, you might be able to take a gamble that health insurance companies will collapse/fail. Understand that many of these companies will be used to manage government health care. You see, even rabid leftist like Obama don't want 100% pure government run/controlled agencies. Leftist like Obama need private-public partnerships so their friends and family can get six and seven figure jobs funded by taxpayer dollars. If government ran everything, salaries would be $70K-$150K/year tops.

So go and do some research on health care companies and buy some out-of-the money put options for a few years down the road. UnitedHealth Group, Wellpoint is another. A family member works for a large company like this. I asked him about government take over, and he pretty much admitted the plan would likely result in a massive cut of individuals from the private companies, they would shrink in size, but still exist as management companies. The gamble is that some companies will just up and fold, and it will be unknown how low share prices will go.

Richard · Nov 9, 2009

is the Govt option going to be administered by a new nationalised company/Govt Dept or by the present healthcare companies ruled by Govt guidelines?

ECON An insurance company will be closing....

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