this end up? (photo by peppergrass)

this end up? (photo by peppergrass)

Health insurance companies are raising rates to small businesses at a staggering rate: one consultant tells the New York Times he expects small business rates to rise an average of 15-23%, which is well ahead of the rate of increase of medical costs.

 

Why? The Times quotes several people saying that insurers are worried about the wizards of Wall Street:

“There’s no one out there who hasn’t had to do a mea culpa to Wall Street,” said Sheryl Skolnick, an analyst for Pali Capital who follows the companies. While the industry is particularly vulnerable now in Washington, she said, “it seems like they’re more afraid of Wall Street.”

That is a real problem. On the one hand, health insurance companies need to raise rates drive up stock prices and protect their stock options. On the other hand, these price increases come at exactly the wrong time, right in the middle of the legislative fight over reform. How ever will they defend themselves? How about this:

Insurers’ “profits are not responsible for increased health care costs,” said Robert Zirkelbach, a spokesman for the industry’s trade group, America’s Health Insurance Plans.

Oh. Then these enormous rate hikes aren’t going to help your bottom line. Wall Street won’t like that, folks. And if it does help your bottom line, and I think it will, members of Congress will hear from their constituents, those small businesses which are so important to their electoral futures, and might think twice about voting to help the people screwing their bread and butter contributors and voters.

What a dilemma. And it’s a problem for the Republicans, too. They want to take the side of small businesses, so they argue that reform will increase prices as more sick people buy into the system.

The Senate minority leader, Mitch McConnell of Kentucky, said in a response to the president’s radio address, “We can’t support a bill that will raise premiums.”

Senator McConnell is in full “pull up the ladder” mode with this weird statement. He says it would be bad to insure more sick people, because it would raise prices for the people who already have insurance. Anyway, we don’t need a bill to raise premiums, the insurance companies can handle that without legislation.

Insurance companies also say there are more non-paying patients because of the economy, and Medicare doesn’t pay enough to providers, so providers charge more to employer insurance plans. In other words, insurers and providers want more money poured into this bloated system, and guess who they want to pay. Taxes? Premiums? It’s all good, as long as they don’t have to take a haircut.

Related posts:

  1. Only the Insurance Companies Want a Level Playing Field
  2. Blue Dog Health Plan to Increase Insurance Premiums, Bureaucratic Costs
  3. CBO: Public Option Would Do Too Good A Job Of Providing High Quality, Low Hassle Health Insurance
  4. Medicaid for All: An Alternative To Subsidizing Insurance Companies
  5. Former Insurance Industry Exec: Baucus Plan a “Gift” to Insurance Companies