I was lucky enough to catch this exchange on the Rush Limbaugh show yesterday. A pretty accurate prediction, I'm afraid, from a caller in the health insurance industry. These people were demonized, their intentions were questioned, the president did everything he could to destroy them. The federal government just ran over an entire private industry under the guise of "compassion." Welcome to fascism, boys and girls. We have one or two elections to change this. Stand strong and donate to a conservative Republican candidate for Congress in your state or county. They will need every penny they can get to unseat the Leviathan in Washington funded by George Soros and drooled over by the willing servants of the mainstream media.
CALLER: Okay. For time immemorial, both state and federal regulation — and also just the industry standard — has been a 65-35 percentage arrangement: 65 in claims payment and 35 for administration and claims expense. Withholding that you store for, you know, a major catastrophe or something.
HOST: This is to pay your claims?
CALLER: No, 65% is to pay the claims. Thirty-five percent is for everything else.
HOST: That means 35% is salaries, administration costs, and the offices, all the paperwork, that kind of thing?
CALLER: It’s that as well as, you know, we are required to keep a certain amount of cash on hand as a percentage of our claims exposure to pay claims. . . .
HOST: Now, I just want to make sure I understand here. State and federal regulations set those percentages?
CALLER: State and federal regulations, yes.
HOST: So if you wanted to have 85% set aside for claims, you couldn’t. You had to go at 65%?
HOST: If you wanted 30% set aside for claims and the rest were administration, you couldn’t do it. It had to be 65%.
CALLER: That’s illegal, yes. It has to be 65-35, and there’s a couple of percentage either way, but generally when an insurance company falls outside of those guidelines, they are considered financially unstable.
HOST: Well, who audits you all to make sure you are within the ratio?
CALLER: We’re audited by the state insurance departments, primarily. There are some plans that are audited both state and federally, and then you have your private auditors who will come in as part of the stock market and that kind of thing. So we’re audited often.
. . .
CALLER: . . . So what Obama just did an hour and a half ago is make every insurance company in the country financially unstable. Remember, the 15% that we are left has not only to pay salaries, maintenance, upkeep of buildings; it also has to pay the 40% increased taxes that we’ve got. I mean, there’s just no way. You can’t do it.
HOST: Well, you’re getting a little bit ahead of me here. What did Obama sign that changes this 65-35 split? In what way did Obama now sign you into permanent instability?
CALLER: The provision in the Senate bill requires that all insurance companies pay 85% of premiums collected every year in claims.
HOST: So the 65 is now 85?
CALLER: Exactly. It doesn’t matter how much we increase the premium, it won’t matter.
. . .
HOST: . . . You originally thought that your industry would survive. You’re speaking industry or just your particular company?
CALLER: I would say 99% of all insurance companies, health insurance companies in the country.
HOST: Okay. So you originally thought you might have three to five years to stay in business under Obama. Now you said it’s two to three. Why?
CALLER: Because of the 85-15. Plus the additional expenses were going to incur. Additionally, the mandates, what people don’t understand when CMS (which is the Centers for Medicaid and Medicare) push a mandate down on insurance companies, we have to pay to complement those mandates. We don’t know how many of those are in this monstrosity. So we can have our mandate budget doubled, our taxes already up 40% or whatever it is, and our cash flow immediately cut.
HOST: Well, how can you know in advance of paying any claims? Because they’ve now shifted to 65% that you have to set aside for claims to 85%. How in the world can anybody know in advance of paying claims that it’s going to amount to 85%?
CALLER: Well –
HOST: Of course 65%? It seems to be like this is a ridiculous dictate made by people that have no clue how your business works.
CALLER: Well, they don’t have a clue. But the way that that amount of money is calculated is you look at the past year, past five years, past ten years, and you see what your claims expense have been those years. Then based on your enrollment and your demographics you project forward into what you expect to be paying in the future, in the next year and the next five years. So you can do that. It’s not precise to a dollar, but you usually get pretty close. What he’s done is by saying, for example, the preventative services now –
HOST: Those are free. Those are, quote, unquote, “free.”
CALLER: Yeah, exactly.
HOST: What the hell is a preventative service covered by an insurance company anyway?
CALLER: Well, that would be your colonoscopies, your mammograms, your yearly physicals, your lab work.
HOST: Oh, so those are free now! So if I want to go get a colonoscopy today and I have an insurance policy, I’m not going to pay for it?
HOST: But you will.
CALLER: Well, we will. We’ll pay out the nose for it.
HOST: (laughing) Well…
CALLER: I know, bad analogy. I’m sorry.
HOST: It is Christmas!
CALLER: But, Sir –
HOST: Well, no, I don’t look at a colonoscopy as Christmas. Don’t misunderstand. . . . But it is Christmas in the sense that I’m not paying for it. I don’t know how you can stay in business even two to three years with this kind of thing happening to you this year alone.
CALLER: I don’t think we will and that’s why I am seriously considering leaving this industry. I’m updating my resume. You know, people who I work with — even people who voted for Obama and thought he was the greatest thing since sliced bread — are shell-shocked.