insurance companies

Over the past several months the mailings and phone calls from your insurance company have changed. Now they seem to be more geared towards "your healthcare" and "educating" you. Well there's a reason for that.

Yesterday the provision of Affordable Healthercare Act went into affect that says insurance companies must spend 80-85% on patient care and the rest can go towards administrative costs. So in the business world this means creative accounting. What was one written off as an "advertisement" can now be written off as "education", moving the item from that 15% to 85% column.

And this just started. I'm sure the army of lawyers and accountants the insurance industry has at their disposal will end up finding far more ways to switch columns on expenses.

I knew this is what would happen when they first announced the provision last year. American businesses are good at this kind of accounting and now we are seeing it.

When your parent company is the largest media corporation in the world and in the middle of one of the hugest corporate scandals in history, then blaming the media probably isn't a good idea, but that's exactly what happened on Fox yesterday.

Bob Dilenschneider of the Dilenschneider Group was on Fox and Friends, trying to defend News Corp and shift blame to the media in general. Here's what he had to say:

Why are so many people piling on at this point? We know it’s a hacking scandal. Shouldn’t we get beyond it and really deal with the issue of hacking? Citicorp has been hacked into. Bank of America has been hacked into. American Express has been hacked into. Insurance companies have been hacked into. . . . So we have to figure out a way to deal with this hacking problem. That’s what we have to do.

The problem with Dilenschneider's statement is that he fails to realize that in this case, News Corp isn't the victim, but rather the perpetrated. Want to "deal with this hacking problem"? Well one good start is by arresting the very people he's defending, since they are the ones contributing to the problem now.

It sounds like Fox is having a real hard time finding defenders, so they went out and hired the window licker from the short bus to make a statement that makes News Corp look even worse. When it's getting to that point, the future of News Corp looks really bleak.

We knew stories like this were only a matter of time:

Two weeks after President Barack Obama signed the big health care overhaul into law, Americans are struggling to understand how — and when — the sweeping measure will affect them.

Questions reflecting confusion have flooded insurance companies, doctors' offices, human resources departments and business groups.

"They're saying, 'Where do we get the free Obama care, and how do I sign up for that?' " said Carrie McLean, a licensed agent for eHealthInsurance.com. The California-based company sells coverage from 185 health insurance carriers in 50 states.

McLean said the call center had been inundated by uninsured consumers who were hoping that the overhaul would translate into instant, affordable coverage. That widespread misconception may have originated in part from distorted rhetoric about the legislation bubbling up from the hyper-partisan debate about it in Washington and some media outlets, such as when opponents denounced it as socialism.

So who is to blame for all the confusion? Simple answer – everyone.

First we have the Republicans, who spent the last year lying about health care reform. They made it sound like it was going to be free care for all, similar to Canada or the UK.

Then we have the media, who acted as a vehicle for these lies. They constantly let them go unchallenged.

Finally we have the Democrats, who didn’t organize a strong enough media presence to counter the lies.

So everyone is guilty. Welcome to the mess that is U.S. politics.

I’ve been tied up for the past 3 days rebuilding one of my servers and haven’t had time to really look at any thing news wise, which totally sucks, so I was really surprised to see this bit of news today:

On a local TV interview show on Friday Sen. Harry Reid (D-NV) basically said it's the plan, that they will use 'reconciliation', and that they'll finish within the next 60 days

Josh isn’t too optimistic on the public option happening, but given the growing tsunami of Democrats coming out in strong support of it in the Senate, there is a good chance something could happen. I also think the recent news of insurance companies jacking up rates by enormous amounts in a bunch of states could give this a real nudge in the right direction.

So hold on, this week could be really interesting.

If Massachusetts race ends up very close, I predict one of the 2 scenarios:

Brown wins:
Coakley will challenge it. This will spark outrage from the right as they start yelling how the election was stolen from them.

Coakley wins:
Brown will challenge it. The right will circle around Brown claiming he is standing up for democracy.

No matter what happens tomorrow it will be fun to watch. This is why I love politics – it’s the best sporting event out there.

As far as the future of health care, well I really don’t know. If it does go down then we can at least say we got closer than ever before. I also suspect if it fails we will see health care costs continue to sky rocket, and it will remain a good platform for Democrats to run on, but that’s only if the Democrats take some lessons in “message control” and don’t stand there like the old deer in the headlights when tea baggers show up.

And perhaps all this will be for the best. Democrats could put forth new legislation this year that doesn’t do public options, exchanges or any of that stuff. Instead put in regulation reform for health care. Open it up to national competition and tighten the reigns on what insurance companies can and can not do. Push the reform as a “consumer advocacy” type legislation and then it will become harder for Republicans to vote against it. That will be a good foundation that we can expand coverage upon at a later date.

She is the first one to officially come out against the Senate bill:

The Senate health care bill is not worthy of the historic vote that the House took a month ago.

Even though the House version is far from perfect, it at least represents a step toward our goal of giving 36 million Americans decent health coverage.

But under the Senate plan, millions of Americans will be forced into private insurance company plans, which will be subsidized by taxpayers. That alternative will do almost nothing to reform health care but will be a windfall for insurance companies. Is it any surprise that stock prices for some of those insurers are up recently?

Read on….

If Stupak goes to the no column, like a lot of people are expecting and Cao follows (something pretty much guaranteed), then that means the final bill won’t pass the House.

Adding… Rep. Slaughter is the co-chair of the 190 member strong House pro-choice caucus, so her voice is pretty strong.

Something I have been saying all along was just repeated on Countdown by former health insurance executive Wendell Potter – there is nothing to stop insurance companies from raising rates.

The bill backers have been touting out charts and tables derived from the CBO report to highlight savings with the new reform. One thing they either don’t realize or don’t want to convey is that the CBO numbers are purely an estimate. A key variable in there will be the insurance companies “playing by the rules”.

As an example we have the 85% medical loss ratio, which states that 85% of premiums must go towards health care. Well administrative costs are considered health care, and there’s a lot of ways for the insurance companies to play with the numbers to get a higher number that what it should be.

And anyone who believes that the insurance companies will play by the rules and not try to figure out loopholes like this is sadly mistaken. I guarantee they already have lawyers and accountants figuring out exactly what they will be able to squeeze past the system, and the fact that enforcing the medical loss ratio will be an entirely new system for the government, we can expect such loopholes and backdoors to be very easy to get in right now.

But I am sure we will “fix it later” because somehow the Democrats are going to magically have a more solid majority than they do now when these problems really start to show their ugly little heads. Meanwhile we will all be forced, by law, to fork over our money to this system.

Seriously – if that is progressive then I am sorry I ever called myself one.

I decided to take a cue from Bob’s post and look at the trend of the health insurance stocks over the past month. Here is Aetna, Cigna and Universal. I highlighted some significant dates. An important note – basically every story broke in the evening, after the stock market closed, so the effects wouldn’t take place until the next day:

The only significant increase I can see is when the public option was dropped out. The insurance companies loved that, and I don’t think anyone would argue that point.