Five more health insurance companies become casualties in the Obamacare war on consumers. Aetna, Cigna, Guardian, American Community and Pekin will all leave the individual major medical market in the next few months. Together, these 5 insurance companies cover about 10% of those with individual health insurance in the state of Indiana.
As reported by the IBJ . . .
Their major complaint is about the new health law’s requirement that at least 80 percent of premiums be spent on medical bills. That new rule, known formally as a medical loss ratio or MLR, takes effect this year for all individual policies the insurers hold, not just new policies.
The insurers argue that the marketing and administrative expenses on individual policies are so high that they cannot transition so quickly to the new standard.
Even if they could make the change, policyholder services are already suffering due to downsized customer service departments. This means longer hold times and a greater chance of getting voice mail in lieu of a real person.
Many carriers have already shifted their customer service overseas to places like India and Pakistan where wages are lower.
Imposing loss ratio's on company's operating in a competitive market is stupid to say the least. If a carrier spends too much on themselves and it leads to an increase in premium rates they will lose market share.
The idiot's in DC look at pockets where market saturation is dominated by one or more carriers and claim this is proof positive that more regulation is needed. According to the report, Anthem Blue Cross has a 65% market share which politicians use to defend their position.
I look at the same thing and say they must be doing something right, delivering good value, or else their market share would be significantly less.
Golden Rule health insurance is number 2 in Indiana with 10% of the market.
If Blue Cross has 6.5x the market share of Golden Rule one must conclude that Blue delivers a better value than Golden Rule. Their pricing has nothing to do with how much, or how little, either carrier spends internally on administration.
So far Georgia is pretty much immune to the wholesale withdrawal by health insurance companies but our time is coming. I would not be surprised to see Aetna or Cigna pull out of Georgia before the end of the year.
Their products have failed to deliver good value for some time and the same can be said for Golden Rule who have been uncompetitive for over 3 years now.
Bob Vineyard at Georgia Insurance Shop is willing to help GA citizens find affordable health insurance for individuals, families and business owners.
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