http://www.nytimes.com/2008/02/08/business/08insure.html?ex=1360126800&en=ea9e03b29c136292&ei=5088&partner=rssnyt&emc=rss
This incredibly long web address is from an article about Aetna's rising profits. Also reported in a variety of other places, Aetna credits its newfound profits from cost cutting, raising premiums, increasing numbers of insureds and a stock buyback. As clarification we are also informed that Aetna's cost cutting came from a reduction of its medical cost ratio. This ratio measures the amount spent on services compared with the amount of payments collected: A reduction in the ratio means an INCREASE in profits. Aetna REDUCED its medical cost ratio by combining a RISE in premiums with a REDUCTION in actual dollars spent for medical care.
The successful business model for insurance companies is based on the consumer: Premiums, money laid out for medical care and shareholders. By raising premiums, paying out less for medical care and increasing profits that mean that stock prices can go higher, Aetna has rewarded itself for increasing the money it takes from individuals. Great business.
Health CARE reform needs to pay attention to the medical cost ratio because the reduction of the ratio based on the reduction in amounts being paid out for medical care while increasing the cost of insurance is what perpetuates and worsens the health CARE crisis.
Insurers are providing less help in paying for care for more money. This is the health crisis.
Task a day insurance: In plain English does it make you feel like a winner to buy into companies that are making money by charging more for less? We're not in a French restaurant, we're looking for a partner in paying for medical care when needed.
