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Health-Care Overhaul May Cost $1.5 Trillion Dollars – Who’s Going to Pay?

Posted Mar 18 2009 3:54pm

Interesting that this is estimated to be about the same amount of money that is (or was)  in health insurance company reserves, roughly totaled.  Others now are finally asking the same question I posed back in late 2008, where’s the reserves?  AIG was not a beginner with fraud with reserves as court cases go back to 2003 and 2005 with not maintaining an adequate amount of money, relating to greed, individual greed, investments, etc. 

We all know the story on where AIG’s reserves were, nowhere to be found.  Over the years, different state governments have also questioned the amounts of the “rainy day” funds kept.  There are laws that require insurance companies to have reserves to keep them from going insolvent, but again where are they invested is one big question.  This does pose a question though, how solid are the reserves of the health insurance companies, and are they in better standing than what happened with AIG?  Are the reserves being audited?

Again, back before the crash, somegovernment agencies were investigating the stock piling of reserve fundswith the levels being too high for the amount of debt and policy holders covered.  Here’s astory about the state of Washingtonthat track some figures back to 2002 and the growth, up until this year.  In Michigan Blue Cross’ state-regulated reserves declined to $2.25 billion from $2.41. 

With the current government overhaul of healthcare, it might not be a bad idea to call in some numbers and find out how healthy the reserves are from the companies selling health insurance so we have some up front business intelligence.   If there are not online SEC audits, etc, in place, who knows we could have a potential make up for a ponzi like program in place.   If we don’t ask questions, we won’t find out.  

One Blue Cross plan in North Carolinais stating they are in a bit of worry and are down a bit of revenue and could face running out of money, but, and this is a big but, it has a reserve fund in excess of $1.2 billion and gave its top six executives $10.5 million in salaries and bonuses in 2008 and of course they said the compensation and reserves were justified, sound like AIG?  If they are worried about running out of funds, what’s the status of the reserves?  We should know this information about all carriers across the US and shame on the government if they don’t have it don’t go get it. 

I recently had a reader state that this would be ultimate bottom line feed, to have to bail out a health insurance company in today’s economy. I think we need some fresh algorithms and again, smart people at the helm to avoid more magpie healthcare that's going nowhere in a hurry.   BD

(WASHINGTON) — Guaranteeing health insurance for all Americans may cost about $1.5 trillion over the next decade, health experts say. That's more than double the $634 billion 'down payment' President Barack Obama set aside for health reform in his budget, raising the prospect of sticker shock at a time of record federal spending. Administration officials have pointedly avoided providing a ballpark estimate, saying it depends on details to be worked out with Congress. The White House had no immediate response to questions Tuesday.

"I don't know where the rest of the money is going to come from," he added.  Some of the leading advocates of coverage for all are using cost estimates of around $1.5 trillion.

Health-Care Overhaul May Cost $1.5 Trillion – TIME

Related Reading: 

Health Insurance Reserves – How much is in the till, could it be 1 or 2 trillion nationwide?

Insurer's Reserves Criticized

Madoff's Scheme – One Reason To Put the “Smart People” in the Right Places So We Don’t Get Fooled Again
A.I.G. To Get 30 Billion more in Bail Out Money from the Government
Concerned over Wall Street CEO Pay – How About Health Insurance CEOs?

Will Greed lead to Meltdown of the Health System?

Health Insurers Pondering Some New Business Models
Health Care Insurers Suggest Algorithms and Business Intelligence solutions to provide health insurance solution
“Beware of Geeks Bearing Formulas”…Warren Buffett
How Wall Street Lied to Its Computers – Software and Programming
BlueCross BlueShield Create New Venture Capital Organization
Health insurers reinvent themselves as money managers – Banks
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