Massachusetts Division of Insurance Talks to Small Business Owners

According to Insurance Commissioner Joseph G. Murphy, “Today, the Division of Insurance begins a schedule of six hearings on small business health insurance costs with a session in Hyannis. As part of Governor Patrick’s reform of small-market health insurance, these hearings will give us the opportunity to hear directly from small business owners how they have been impacted by increases in insurance costs.

We have heard informally from many business owners and organizations about increases in health insurance. In our current climate, an increase of 10 or 12 percent is considered “good,” especially compared to the 20, 30, 40, even 50 percent increases some companies have been facing.

Small business is the engine that drives our state’s economy, and as we continue our economic recovery, small business needs to be given the best possible environment to thrive and grow. Ending these skyrocketing insurance increases is one part of the Governor’s plan to support small businesses and create jobs in Massachusetts.

As we travel throughout the state this week and next Monday, we want to hear from as many small business owners as possible.

We’re looking forward to a good week of hearings, and we look forward to your input.”

The Commissioner’s push for Insurance input is no doubt because insurance companies were reported as doing quite well in 2009.

According to Science Blogs, “2009 was a dismal year, economically speaking — unless you were a health insurer. Explanation, according to the insurance industry? In 2008 they took a bath in the market, so the comparison is artificially inflated. Gee, my retirement income took a bath in 2008, too. In fact I’m not doing that well in 2009, either. And that points up a fact usually not recognized: insurance companies are basically investment companies.

They take our premium money and invest it between the time of receiving it and when they have to pay it out. The longer they get to hold it, the more money they make on their investments. And if they invest it poorly, they deny claims and jack up premiums to recoup the losses, or more accurately, the less than obscene profits. Last year the top five spent less a smaller proportion of their premiums on medical care and more on salaries, administrative expenses and profits.

And they jacked up premiums, the most notorious being Wellpoint’s Anthem Blue Cross California, up 39% for 2010. Wellpoint claimed they lost money in California last year but at the same time they posted a $4.7 billion profit. $4.7 billion. That’s 4.7 thousand millions. Their 7.3% profit margin was highest of the big five. But they are still raising premiums 39% and considering paying a dividends to investors, not something companies that lose money usually do.

It is a commonplace to say government programs are notoriously inefficient and wasteful. The real truth is that premiums go farther in the single-payer Medicare program which insures people with high medical expenses (the elderly).

Medicare doesn’t have to make an obscene profit and spends far less in administrative expenses, many of which go to figuring out ways to deny claims. Private health insurers are among the most wasteful and socially unproductive businesses in the country. They provide no useful services of any kind. They are parasites.

I can’t say enough bad about health insurance companies. They shouldn’t exist. They are ruining the country. And the Obama Administration and the Congress — all Republicans and too many Democrats — just keep shoveling more money into their hungry maw.”

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