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First victim of health care overhaul?

Harry Guerrilla

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First victim of health care overhaul? - Sarah Kliff - POLITICO.com

A Virginia-based insurance company says “considerable uncertainties” created by the Democrats’ health care overhaul will force it to close its doors by the end of the year.

The firm, nHealth, appears to be the first to claim that the new law has driven it out of business. “We don’t know what the rules are going to be, and, as a start-up, our investors need certainty,” nHealth CEO and President Paul Kitchen told POLITICO. “The law created so much uncertainty that is beyond our control.”
“The uncertainties in the regulatory climate coupled with new demands imposed by national health care reforms have made it challenging to sustain the level of sales required to remain viable over the long run,” Slabaugh wrote.

The company’s finger-pointing — first reported by the newspaper Richmond BizSense — must be read with caution: For years, employers and health insurance brokers have struggled to keep pace with steeply rising health care costs.
Even without the health reform law, small health insurance firms were operating in a financially challenging landscape. Employers have become increasingly likely to consider dropping coverage as premiums have risen, according to annual surveys by the National Small Business Association. As far back as 2008, a Citigroup survey showed “more insurers were raising premiums at a faster rate than those who reported slowing increases,” according to a Wall Street Journal article at the time.
I think the new regulations will be problematic for small start up insurance companies because compliance costs can be damaging to smaller firms.

What do you think?
 

LaMidRighter

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The Democrat party signed quality healthcare's death warrant and instituted government quackery. Once people realize that the supposed anti Obamacare hyperbole was the correct position, that death warrant will transfer to the DNC. That is my thought. I'm in a fortunate situation in that I have other lines I can sell and am better served by life and retirement anyway but the tax increases are going to screw me like everyone else.
 

Deuce

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First victim of health care overhaul? - Sarah Kliff - POLITICO.com



I think the new regulations will be problematic for small start up insurance companies because compliance costs can be damaging to smaller firms.

What do you think?
They don't know what the law does so there's uncertainty? Don't they have lawyers who can, you know, read the bill and figure that out? Insurance prices have been skyrocketing for years, but this new bill with provisions that don't go into effect yet? THAT MUST BE THE CAUSE!

Sounds like a cop-out to shoddy business practices, to me. Health insurance companies are about to get millions of customers wrapped up on a silver platter for them.
Those poor, poor insurance companies...

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined
 

LaMidRighter

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They don't know what the law does so there's uncertainty? Don't they have lawyers who can, you know, read the bill and figure that out? Insurance prices have been skyrocketing for years, but this new bill with provisions that don't go into effect yet? THAT MUST BE THE CAUSE!
You seriously should stop this. I am in the industry and have seen the daily compliance rewiews. You do not know what you are talking about.

Sounds like a cop-out to shoddy business practices, to me. Health insurance companies are about to get millions of customers wrapped up on a silver platter for them.
Those poor, poor insurance companies...
Seriously, compliance departments specialize in this and even they are frustrated trying to get this ever changing(for the worse) piece of **** to be workable. Stop the spin.
 

Deuce

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You seriously should stop this. I am in the industry and have seen the daily compliance rewiews. You do not know what you are talking about.

Seriously, compliance departments specialize in this and even they are frustrated trying to get this ever changing(for the worse) piece of **** to be workable. Stop the spin.
How many new customers are you expecting?
 

mike2810

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How many new customers are you expecting?
Maybe the more correct question is: How many new customers are you expecting? How much will the bring in and how much is going to be paid out?
Since the HI has to accept anyone no matter their health, is it not possible despite more policy holders, they may end up paying out more than they take in?
 

Deuce

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Maybe the more correct question is: How many new customers are you expecting? How much will the bring in and how much is going to be paid out?
Since the HI has to accept anyone no matter their health, is it not possible despite more policy holders, they may end up paying out more than they take in?
It is possible. However, given the large number of young, healthy people who will probably sign up, people who cost much less than they pay in, I don't expect this to be the case.
 

LaMidRighter

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It is possible. However, given the large number of young, healthy people who will probably sign up, people who cost much less than they pay in, I don't expect this to be the case.
What makes you think that is going to change the uptick in the risk pool? In your unbiased professional opinion and not some recyled Reid/Pelosi/Obama/blog crap. I want to know your professional opinion. Oh, wait.....I'm the professional in this department.
 

CaptainCourtesy

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What makes you think that is going to change the uptick in the risk pool? In your unbiased professional opinion and not some recyled Reid/Pelosi/Obama/blog crap. I want to know your professional opinion. Oh, wait.....I'm the professional in this department.
Actually, both will probably increase. The young, healthy people, and the high risk folks... though I would imagine the latter would be less. Mamy people who are high risk, tend to be older, people who are already on Medicare.
 

Harry Guerrilla

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They don't know what the law does so there's uncertainty? Don't they have lawyers who can, you know, read the bill and figure that out? Insurance prices have been skyrocketing for years, but this new bill with provisions that don't go into effect yet? THAT MUST BE THE CAUSE!

Sounds like a cop-out to shoddy business practices, to me. Health insurance companies are about to get millions of customers wrapped up on a silver platter for them.
Those poor, poor insurance companies...

Aetna Inc. Common Stock Share Price Chart | AET - Yahoo! Finance
It's an upstart health insurance company.
While they may have some money, paying lawyers so they can be compliant is expensive.

This is exactly what I have said happens when you add more than necessary regulations.
It stifles competition by eliminating small time operations, which would be more customer orientated than the huge entities that already exist.

All it does is encourage monopolization of the industry.
 

CaptainCourtesy

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Also, I know of two people who will be benefiting from the heath care bill in ways that they would not have without it. One a recent college graduate who, upon leaving school has suffered some significant psychological disorders and who needs continuing treatment, will be able to remain on her parents insurance plan. The other, a high school graduate, who due to his psychological disorders, will be unable to attend college in the fall, will also be able to remain on his parents insurance, enabling him to continue treatment. Most insurance companies demand to see a paid tuition bill or they will cut insurance coverage.

September 23 is the date that this goes into effect.
 

Harry Guerrilla

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Also, I know of two people who will be benefiting from the heath care bill in ways that they would not have without it. One a recent college graduate who, upon leaving school has suffered some significant psychological disorders and who needs continuing treatment, will be able to remain on her parents insurance plan. The other, a high school graduate, who due to his psychological disorders, will be unable to attend college in the fall, will also be able to remain on his parents insurance, enabling him to continue treatment. Most insurance companies demand to see a paid tuition bill or they will cut insurance coverage.

September 23 is the date that this goes into effect.
Please don't think I don't care of plight of the many people with medical problems because I do care.
Especially those that can't help it and/or did nothing to cause it.

The problem is that we keep carving legal exceptions for every niche problem, every person has.
That creates a legal maze of sorts for businesses and consumers a like to wade through before treatment can begin.

If things were left marginally self regulated, the market would normalize for people with long term, (sometimes) incurable diseases and afflictions.
 

CaptainCourtesy

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Please don't think I don't care of plight of the many people with medical problems because I do care.
Especially those that can't help it and/or did nothing to cause it.

The problem is that we keep carving legal exceptions for every niche problem, every person has.
That creates a legal maze of sorts for businesses and consumers a like to wade through before treatment can begin.

If things were left marginally self regulated, the market would normalize for people with long term, (sometimes) incurable diseases and afflictions.
I don't agree. It is the lack of regulations that has created much of the health care problems. In some cases, I believe the bill is too restrictive, but in many others, it doesn't go far enough.
 

Harry Guerrilla

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I don't agree. It is the lack of regulations that has created much of the health care problems. In some cases, I believe the bill is too restrictive, but in many others, it doesn't go far enough.
What is being greatly ignored is the opportunity costs by implementing these regulations on a yearly basis that would have otherwise gone to care and other necessities in the consumer medical care market.

Fear is the #1 driver of increased regulation.
It is assumed that without it, things will get worse.
In the short term, that may be true but market normalization is the transition where that fear is erased.
 

CaptainCourtesy

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What is being greatly ignored is the opportunity costs by implementing these regulations on a yearly basis that would have otherwise gone to care and other necessities in the consumer medical care market.
More likely profit rather than care and necessities.

Fear is the #1 driver of increased regulation.
It is assumed that without it, things will get worse.
In the short term, that may be true but market normalization is the transition where that fear is erased.
Greed is the #1 driver of decreased regulation. It is assumed that with it, things will get worse. In the short term, that may be true, but with the regulations in place on a long term basis, the market normalizes, and service becomes the driving factor towards profit, not manipulation and short cuts.
 

Harry Guerrilla

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More likely profit rather than care and necessities.
The margin of profit for most of the insurance companies I have researched is thin, small enough to the point that the majority don't issue dividends to share holders.

Greed is the #1 driver of decreased regulation. It is assumed that with it, things will get worse. In the short term, that may be true, but with the regulations in place on a long term basis, the market normalizes, and service becomes the driving factor towards profit, not manipulation and short cuts.
Everyone enjoys a level of greed and profit, if not you would reduce your practice prices.
There is nothing inherently wrong with greed or profit.

Fixed specific legal regulations are inherently inefficient.
They do not allow for new situations or conditions in the market and must be constantly revisited.
You are right that markets do eventually normalize to new regulations, just not how you had hoped they would.
 

LaMidRighter

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Actually, both will probably increase. The young, healthy people, and the high risk folks... though I would imagine the latter would be less. Mamy people who are high risk, tend to be older, people who are already on Medicare.
Not necessarily C.C.
Young people "should" be enough on paper to counter the older higher risk. Unfortunately paper doesn't account for percentages of need. Younger and healthier people will necessarily use insurance less but their premiums will also be less, unfortunately the less healthy necessarily will pay more but will also consume past what their premium contributions meet, as well, people are living longer and with those increases come increases in the high risk portion of the model. So in essence more people would create more strain.
 

CaptainCourtesy

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The margin of profit for most of the insurance companies I have researched is thin, small enough to the point that the majority don't issue dividends to share holders.
My research disagrees and indicates that the profit margin of insurance companies is fairly substantial.



Everyone enjoys a level of greed and profit, if not you would reduce your practice prices.
There is nothing inherently wrong with greed or profit.
There's nothing wrong with it, but it is the prime mover in business, and if unregulated, service deteriorates. Make no mistake. There is not a lot of variety in the insurance industry. You get pretty much the same service/output no matter where you go. This allows the industry to cut costs and raise profits as much as they want. When you're the only game in town, it really doesn't matter.

Fixed specific legal regulations are inherently inefficient.
They do not allow for new situations or conditions in the market and must be constantly revisited.
You are right that markets do eventually normalize to new regulations, just not how you had hoped they would.
Fixed general regulations are inherantly effficient. Once they are in place, new situations can easily be accounted for with minimal modifications. With a structure already in place changes are adapted well. Markets normalize pretty easily and the new structure takes the form of the new market. Pretty much just as I hoped.
 

LaMidRighter

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More likely profit rather than care and necessities.
The industry standard profit for health insurance is around 6%, by comparison most other industries maintain an 8% minimum standard for viability and anything less than 9% cannot be considered a success. I wouldn't say it's exactly a high profit model.



Greed is the #1 driver of decreased regulation. It is assumed that with it, things will get worse. In the short term, that may be true, but with the regulations in place on a long term basis, the market normalizes, and service becomes the driving factor towards profit, not manipulation and short cuts.
Harry is right though. Compliance costs do keep upstarts out of the market and favor larger companies that can absorb those expenses so I'd say the greediest of us want to keep more market share with the smallest competitor pool, this is where regulatory monopolies are created.
 

CaptainCourtesy

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Not necessarily C.C.
Young people "should" be enough on paper to counter the older higher risk. Unfortunately paper doesn't account for percentages of need. Younger and healthier people will necessarily use insurance less but their premiums will also be less, unfortunately the less healthy necessarily will pay more but will also consume past what their premium contributions meet, as well, people are living longer and with those increases come increases in the high risk portion of the model. So in essence more people would create more strain.
You are forgetting that most Americans who have lived longer are on Medicare, which is usually primary, even if one has secondary insurance. The private industry will not be overburdened, since we know that most of one's lifetime insurance costs occur in the last 6 months of life, if we are talking about older people, Medicare will attack this. The whole situation will balance itself out and we'll pretty much have what we have, now.
 

CaptainCourtesy

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The industry standard profit for health insurance is around 6%, by comparison most other industries maintain an 8% minimum standard for viability and anything less than 9% cannot be considered a success. I wouldn't say it's exactly a high profit model.
That may be the standard, but the largest companies have higher percentages. I don't recall, off hand, but I remember seeing the numbers in a financial magazine... at the doctor's office of all places.



Harry is right though. Compliance costs do keep upstarts out of the market and favor larger companies that can absorb those expenses so I'd say the greediest of us want to keep more market share with the smallest competitor pool, this is where regulatory monopolies are created.
And what you are describing is exactly what we have right now. This is why increased regulations are necessary.
 

LaMidRighter

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You are forgetting that most Americans who have lived longer are on Medicare, which is usually primary, even if one has secondary insurance. The private industry will not be overburdened, since we know that most of one's lifetime insurance costs occur in the last 6 months of life, if we are talking about older people, Medicare will attack this. The whole situation will balance itself out and we'll pretty much have what we have, now.
Not really, the private insurances fall into subsidized, medicare gap coverage, or a semi-private which is a way of medicare paying it's responsibility and the supplementals taking the rest of the burden. Med. A and B are the only truly "public" options in the bill, anything E-N is semi-private, many of these companies also service individual and group policies as well.
 

LaMidRighter

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That may be the standard, but the largest companies have higher percentages. I don't recall, off hand, but I remember seeing the numbers in a financial magazine... at the doctor's office of all places.
I haven't seen anything over 7 on my end.





And what you are describing is exactly what we have right now. This is why increased regulations are necessary.
Absolutely not. Increased regulation increases compliance costs, I mentioned earlier that most health companies are spending more time adjusting to the bill that passed than they are on client service, this cannot possibly be good for people.
 

CaptainCourtesy

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Not really, the private insurances fall into subsidized, medicare gap coverage, or a semi-private which is a way of medicare paying it's responsibility and the supplementals taking the rest of the burden. Med. A and B are the only truly "public" options in the bill, anything E-N is semi-private, many of these companies also service individual and group policies as well.
When I have handled any billing for Medicare, A-N, the primary always goes directly to Medicare. We have software that does this right through the internet. Only after that is supplemental private insurance billed... if there is any.
 

LaMidRighter

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When I have handled any billing for Medicare, A-N, the primary always goes directly to Medicare. We have software that does this right through the internet. Only after that is supplemental private insurance billed... if there is any.
True, I may not have stated it clearly.
 
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