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Many people say health ins. should never be a profit business.

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napi21 Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:25 AM
Original message
Many people say health ins. should never be a profit business.
I agree with them, but I have question. All of the ins. co's are now private businesses with stockholders. How in the world could you ever make them non-profits and what would happen to those stockholders? I realize most of you don't care about the stockholders, but I think you should this time because a lot of those stocks are inside the mutual funds in your 401K's.
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kenfrequed Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:35 AM
Response to Original message
1. Public option
I am sorry but there are some things that you do not have a "right" to. Squeezing people for money for life essential treatments and supplies is one of these things.

The solution is to ignore the insurance industry completely and push for a strong and well funded public option that can be garaunteed to anyone that asks for it. If the private insurance industry can survive this than so much the better, if not then I have to say that it is less the job of government to protect an industry than it is to protect its citizens.

The insurance industry can go into providing insurance suppliments for non-essential and elective treatment and eke out a more reasonable and less ridiculous profit margin.
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Demoiselle Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 10:18 AM
Response to Reply #1
15. The public option, imo, is the slow motion way to single payer..
A not-for-profit government plan, with the clout of the Feds behind it, will ease its competition (or a lot of it) out of business. That's why the insurance companies are fighting it so hard. I wish we could go straight to single payer, but, as Obama has said, that would be incredibly disruptive, not just of overpaid CEOs (who cares!) but a lot of people, employees, pensioners, who I don't really think we should be eager to harm. Better the change comes in increments, I guess. (I'm not going to fight to the last breath over this, but it makes a certain amount of sense to me to turn things over gradually.)
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kenfrequed Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 11:54 AM
Response to Reply #15
19. Uhm
Public option should not be confused with not-for-profit co-ops. They are entirely different in nature and effect. A public option is run by the government and has the governments weight in negotiating fees and rates and has a low overhead.

A co-op is a creature akin to an HMO and ends up having similar structures. Also the data on health co-ops seems to suggest that they are not terribly effective at delivering healthcare and controlling costs.
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yurbud Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:01 PM
Response to Reply #15
21. good
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MNDemNY Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:44 AM
Response to Original message
2. Stock holders can lose there "blood money" no pity.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:54 AM
Response to Reply #2
6. If a pension fails as a result and pensioners who worked 20 to 30 years for that pension...
lose their lifetime income well too bad huh?

Large stable companies like insurance providers are a staple for pension plans all across the country. If the pension plans fail not only do the retirees lose the majority of their retirement income due to no fault of their own but the govt picks up the cost. The govt acts as backstop providing at least partial benefits for insolvent retirement fund.

So it is a lose-lose.
The pensioner sees a 30%-70% reduction in lifetime benefits
The taxpayer ends up bailing out failed pension funds.

Of course millions and millions of Americans also have private retirement accounts (401K and IRA) and most use mutual funds. Virtually all of them have some exposure to Health Insurance Providers. Even plans like S&P 500 funds which just track progress of S&P500 have Health Insurance providers because healthcare (both insurance & service) make up 12% of the S&P 500.
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MNDemNY Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:58 AM
Response to Reply #6
7. Yup. Any pension that fails on declining insurance stock alone has been criminally mis-managed.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 09:21 AM
Response to Reply #7
11. Except you are replacing your ethical values for laws.
Edited on Tue Sep-22-09 09:23 AM by Statistical
Ever heard of equal protection under the law?

Until it is illegal it is legal. To criminalize someone for taking part in lawful activity is a violation of due process.
If you want to make something illegal then make it illegal don't punish people (in this case 4th party) for legal actions.

Can you not even step back and see the danger of replacing the law with personal ethics.

Repukes make abortion illegal and arrest people for "uncrimes" in the past.
The precedent that you punish someone for non-crime is extremely dangerous. It won't just stop here.
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MNDemNY Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 10:12 AM
Response to Reply #11
14. Trustees. They are obligated to protect a fund.
If the fund would collapse on insurance co. stock ALONE, they are acting CRIMINALLY negligent under current laws.
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kenfrequed Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:03 PM
Response to Reply #11
24. Feh
No, he is replacing good economic and financial sense and rational and competant stewardship for the law.

Anyone that ran a pension and failed to diversify a bit ought to either have his wits or his motivations brought into question.

However on the legal front-When pensions are reinvested in one specific sector or operation or worse if they are entirely sunk into one specific company then we must really start doing a bit of investigating. After all this is what a number of companies like Enron did and those operations actually WERE illegal.
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MNDemNY Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:58 AM
Response to Reply #6
8. Yup. Any pension that fails on declining insurance stock alone has been criminally mis-managed.
And their decline will not be that fast, plans can divest.
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kenfrequed Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:00 PM
Response to Reply #6
20. So...
You are suggesting that there are a lot of these pensions that are tied up exclusively in health insurance? I was under the assumption that most pensions were sort of...oh I dunno... what is that term? Oh yeah Diversified.

Please stop trying to use ignorance to pit the working class against itself with these absurd false choice narratives. It really ends up being painfully transparent to people that actually know a little bit.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:27 PM
Response to Reply #20
27. Who said exclusively.
Even a pension tied up in the S&P 500 (about as diversified as you can get) will be substantially affected by one sector going to 0. Like it or not it is 17% of the S&P 500.

It would have a substantial effect on the pensions ability to meet current obligations. That may force them to sell other assets (possibly in a market decline = worst possible time for long term investor) in order to meet current obligations. Long term that puts the pension at risk.

Many pensions exists for defunct companies or companies that do not enroll current employees in the pension (current employees having switched to 401K). Those pensions have no new revenue coming in to offset declining asset value.

A 17% decline in a very diversified portfolio on top of a larger market decline could put many pension funds at risk or at a minimum force them to lower benefits. That being said even if it is criminal and you charge the fund manager that doesn't really help the pensioner who now has to accept a 60% reduction in benefits and is the responsibility of taxpayers for life.
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:45 AM
Response to Original message
3. Government could buyout the companies... i.e nationalize and re-prioratize them.
Edited on Tue Sep-22-09 08:50 AM by Statistical
They employees and assets could be used for either
a) private non-profit insurance companies w/ strict caps of employee compensation = France
b) single payer system = England & Canada

The combined market cap of top 10 companies is only 101 billion.
UNH UnitedHealth Group Inc. 32.88B
WLP WellPoint, Inc. 26.02B
AET Aetna Inc. 13.53B
CI CIGNA Corporation 8.67B
UNM Unum Group 7.47B
HUM Humana Inc. 6.70B
CVH Coventry Health Care, 3.20B
HNT Health Net, Inc. 1.77B
HS HealthSpring, Inc 0.81B
MOH Molina Healthcare, Inc. 0.54B

Not sure what the value of all the companies would be but given how the largest players as so much larger than the smaller it is unlikely the entire health insurance market is <$150 billion. In the panic of a credible risk of single payer system the market value likely decline 20%-30% bringing the "buyout cost" somewhere around $100 billion.

Also many of the companies have "non health" financial services. They non health aspects of the company would be spun off reducing the cost to acquire the health-insurance companies. How much? Who knows it would take detailed analysis of the companies statements. I would guess that they derive at least 20% of their value from non-health services.

Think of it for <$80 billion we could end private for profit health insurance once and for all. Less than the cost of a month in Iraq and it is gone forever.

Simply erasing them would cause a financial shock. People fail to understand that pension funds own large stable companies like insurance providers. If they take major losses the risk of becoming insolvent. 401K, IRA, mutual funds also are shareholders in health insurance providers. The cost of simply allowing them to crash would be far more than the cost to wind them down in an "orderly manner".


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endarkenment Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:46 AM
Response to Original message
4. Waaa
The huge insurance companies, by the way, are not involved only in health insurance, they do all sorts of insurance and would continue to do so. Blue Cross Blue Shield was a non-profit and now is a complicated mix of for profit and non-profit entities - I guess they would have to undo what they did when some of their entities converted to for-profit.

The health insurance industry is not a huge pillar of our economy. It does not employ all that many people, it produces nothing of actual value, and in fact it simply drains profits out of other viable enterprises. Many of the people working in the for-profit private sector would be needed in the non-profit organizations. They would not all be wiped out. Even if we converted to single payer, many of the people doing actual claims processing would be able to find employment in the government as it expanded its claim processing activities.
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msongs Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 08:52 AM
Response to Original message
5. blue cross shareholders would rather you DIE than spend any money on your illnesses nt
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One_Life_To_Give Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 09:07 AM
Response to Original message
9. Those who put up front money deserve something
Every Insurance company runs the risk that in the short term expenses paid out will exceed receipts of premiums. Asking someone to put up large sums of money only for a promise to gegt back not more than what they put up is a recipie for failure. Would you put money into a bank account that would only pay you back what you put in with a risk of it being less?
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endarkenment Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 10:53 AM
Response to Reply #9
18. Currently that something is on the order of 30%.
I'm fine with limiting 'administrative overhead' to a mere 5% of gross.
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no_hypocrisy Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 09:10 AM
Response to Original message
10. Same category as access to fresh water and utilities.
Never should be privatized.
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HamdenRice Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 09:25 AM
Response to Original message
12. What's sad is most used to be non-profits. Reagan forced some to become for profit
and others were caught up in privatization hysteria.

So many people complain about Blue Cross/Blue Shield being rapacious. Believe it or not, they started out as non-profits and were forced to become profit companies.

So they way it could be done now is to start non-profits. Without executive salaries and profits, they might out compete for profits.

But the best way is a public option, which would drive for profits out of the business eventually.
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John Q. Citizen Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 09:46 AM
Response to Original message
13. I'm worried about the finances of slave holders, drug dealers, child labor sweat shop
owners and sex industry workers.

Imagine the effect on commerce should they all end at once.


I would imagine that you believe we should care about those that profit from those activities because of how it would effect the world economic situation.

But i don't really care, because I am aware that those enterprises aren't productive, they are leech like.

Just like private health insurance companies. They produce nothing of value.
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DireStrike Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 10:21 AM
Response to Original message
16. Here's how.
Edited on Tue Sep-22-09 10:23 AM by DireStrike
1) The government sets up a single payer healthcare system.

2) Make it illegal to provide insurance for anything covered by the government system.



OR

1) A strong public option is created, which by its nature would be superior to insurance companies. The insurance companies eventually go out of business.


Oh, what would happen to the stockholders? They would be penalized for having put their money behind worthless bloodsucking entities that have been feeding off society since their creation. And don't give me that shit about "people don't even know what they're investing in these days!" If you don't have the time and money to look after your own investments you shouldn't be investing.

This is why corporations can do anything they want in pursuit of profits. NOBODY cares what the corporations they own are doing, as long as they get money from them. There is no responsibility in the corporate system.
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 10:24 AM
Response to Original message
17. Some of us have stock, but all of us need medical access.
Fuck the shareholders. They bet wrong.

I wouldn't have a problem with health insurance being for profit... if it resulted in better or more efficient care. It doesn't.
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NNN0LHI Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:02 PM
Response to Original message
22. Insurance companies aren't affected because someone has to process the claims
My employer is Ford and is self insured, but still has to hire Blue Cross to process their claims. Someone has to.

I am not positive but I am pretty sure Blue Cross also processes the claims for Medicare? Perhaps someone knows for sure?

Only ones who lose out are the bloodsuckers in upper management raking in millions and living in mansions for basically doing nothing.

Don
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yurbud Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:03 PM
Response to Original message
23. If we close the concentration camps, what will happen to all the poor gaurds and makers of Zyklon B?
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debbierlus Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:04 PM
Response to Original message
25. It will suck for them. But, the American people's health can't be put below their profits


People over profits. Human life trumps money.

And, perhaps, people might want to consider how the companies they give their money turn their profits. Shareholders withdrawing money due to unethical business practices is a powerful means of revolt.
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dysfunctional press Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-22-09 12:08 PM
Response to Original message
26. the stock market is gambling pure and simple.
companies fail. people lose money.
it happens all the time.

keeping them artificially afloat to ensure investor profits is as stupid an idea as continuing to fight an unwinnable war so that those already killed in action won't have "died in vain".
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