Health insurance takeover alert: Insurers selling different products

The Denver Business Journal reports on what might be the first signs of government’s forcing out its competition in the health insurance business:

Colorado health insurers are diversifying their product offerings, selling policies outside of the health realm — such as workers’ compensation and life insurance …

In addition, national insurers recently have purchased non-insurance businesses, such as health clinics and electronic health information technology providers — also to increase their revenue base.

Colorado insurers began easing into new products in the last couple of years. But passage of federal health care reform last March sped up the pace.

Company executives say the timing isn’t coincidental, as new regulations are expected to cut into profit margins, making new sources of revenue and more efficient services even more important.
One new regulation, for example, requires that insurers spend at least 80 percent of health care premiums collected from small business plans on medical care rather than administrative costs. That number rises to 85 percent for large business plans.

This political control (“regulation”) is known as the medical loss ratio. For why this is a bad idea, see my previous posts:

Recall that in response to the health control bill [HR 3590], some Colorado insurers have stopped selling child-only policies because otherwise they’d have to charge the same rates to everyone regardless of risk. State Senator Morgan Carroll wants to force insurers to sell them.

If you think it’s alarmist to suggest the politicians backing the health control bill [HR 3590] want to use authoritarian methods to create a government health insurance monopoly, recall that (1) the proponents of the “public option” want a government monopoly, and that (2) characterizing the health control bill as a government takeover is surely not 2010′s the “lie of the year.”

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    Insurance selling different product what does it means.