wave of health insurance premium increases coming soon

[kenny blankenship]

17. They have to. That's what most don't understand.

Last edited Sun Apr 1, 2012, 01:55 AM - Edit history (3)

When i say they have to, I mean they must raise net revenues year over year, or their stock price will start to collapse. Most of these insurers are publicly traded corporations. Such a entity is like a shark: it swims around constantly because it has to eat a lot. It eats a lot because because it has to swim a lot. Only it's worse than a shark. It's a shark that absolutely must eat more and more every year or else everyone in the ocean will be convinced that it's dying and then it will be attacked. This is the sacred "growth" that all corporations seek, and that in a larger sense our capitalist economy must pursue, or else collapse into deflationary depression. Not only does the body of the corporation live and die by the direction of the share price, but the management are largely paid in stock options, so they could give a fuck about people dying or living in fear of getting sick - they are going to work every day with a view to whatever will move share price higher and prevent it from stagnating or falling. If that means your premium goes up each year so hard and fast that you're checking your underwear for blood, they don't care. If that means your kid dies of cancer because they were unwilling to authorize expensive tests for her, and they clung to a nonsensical, inaccurate diagnosis until she was too weak to stand surgery, they don't care. And nothing about any of that is going to change under ACA, my fellow suckers and rubes.

Now you put in place a limit like the Medical Loss Ratio, and what will these corporations do (collectively) in response? How do they adapt? Whereas before they had an incentive to keep their vendors' prices in check, now the only way for their net revenues to grow is strictly in proportion to their gross revenues. They can't cut their way to increased growth: it's unlikely they will be able to steal significant customer base from each other, and the human body isn't becoming more resistant to injury, aging and disease. In other words, their only path to growth is to encourage all their vendors, that is the doctors, pharmaceutical companies and hospitals, to raise their prices as fast as they can, as fast as they want to, at whatever rate the market can take without total collapse. The gross revenue keeps spiraling up, making it look like a good business to be in, stock dividends rise along with revenues, and the all important share price is protected. And while they encourage provider costs to balloon with a nod and a wink, government mandates on individuals and subsidies extracted from taxpayers will be there to keep the total collapse of insurance disenrollment from occurring, at least until we go broke. In short, the Medical Loss Ratio is an invitation to runaway cost inflation. As a pure middleman whose only intrinsic cost is pushing electronic paper around, the insurance mafia will simply encourage the prices charged by all the vendors whom they pay to rise, with all the increases passed on to you, the victim caught in a mandated insurance trap and/or to you the victim, paying with your taxes, the subsidy for other people who can't afford their own insurance. In most cases, you will be doubly victimized as both captive consumer paying for an inflated and often defective product AND as a taxpayer who pays for a no less inflated, and probably even more defective product for someone else.

They HAVE TO keep turning the screws on you like this, and they're GOING TO keep turning the screws on you like this. ACA doesn't change their nature. Anytime someone thinks they can use ACA to put a halt to this screw job, the insurance companies will scream You're breaking our backs, we have to make profits and we're entitled to make profits! We can't continue to do what we do for you without them. Defenders of ACA will jump to point out: "They're OUR SYSTEM - you can't endanger the health of our insurers without endangering the health of the whole system and the 300 plus million Americans it drains the lifebloo - uh the 300 million Americans who DEPEND on it for their own lives and health!"