Keep it Simple today and learn as much as you can before being sold on a point of view. You believe it's your neighbor's illness that caused your insurance rates to go up so you fight as one of the healthy to exclude him/her from YOUR insurance pool so that during the short period of time when you are perfectly healthy YOU can pay less for health insurance. How's that working? Have your rates gone down in spite of your good behavior, good luck and good genes? No. And when you do get sick you are at a greater risk than ever of missing out on treatment, going bankrupt from treatment or surviving treatment only to find yourself uninsurable. But you still believe. Today I advocate stepping up the game. How about looking at the business pages?
UnitedHealth Group was sued for artificially low reimbursements for out of network services by its insureds and doctors (who get paid from insurance). Claims date from 1994 and yes, it's 2009. In addition to litigation costs UnitedHealth Group will pay $350 million to a fund. See:
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090115005323&newsLang=en
Yesterday headlines reported that "UnitedHealth 4Q Net Slides 40% Amid Charges, Cost Increases" for example see: http://online.wsj.com/article/BT-CO-20090122-704488.html
Details reveal that:
1) Revenue climbed 9.4% to $20.5 billion on premium increases and acquisitions: Okay, so your prices were raised but that wasn't enough for United HealthCare to post a profit that met expectations
2) UnitedHealth made money, make no mistake. Profits were 60 cents a share, down from $1.22 billion, or 92 cents a share, a year earlier.
3)The latest results included an 18-cent charge for a class-action litigation.
4) In spite of greater charges, UnitedHealth also points out an increase of .9 percentage point that raises their medical loss ratio to 80.8%. This number is remarkable in its claim that UnitedHealth's medical-loss ratio which reflects the PERCENTAGE OF PREMIUM REVENUE USED TO PAY PATIENT BILLS. Why so high? Remember, defensive medicine, those unnecessary tests used by physicians to keep their own insurance rates lower are included. Until consumers can convince providers NOT to administer every test under the sun at every turn, these costs will remain high. Still, spending $.81 of every dollar paid in on patient health is a decent number.
5) The stock ended up, not down because of the settlement of the litigation...meaning that it was the threat of having to pay up for past actions that drained off the profits from UnitedHealth.
So how do you think the problem will be solved? Consumers will be charged more for less, health insurers are one horse shows, this is the ONLY way they solve problems. However, keep it simple today and accept the reality that the litigation costs and settlement costs which have NOTHING TO DO WITH WHETHER YOUR FAT NEIGHBOR GOT SICK are the number one negative impact on UnitedHealth's profits IN SPITE OF INCREASED REVENUE.
