The insurance companies in Massachusetts are $100 million short of break even with Romneycare. They sued the courts in Massachusetts to get an injunction to raise rates to break even. The judge declared in favor of the state and denied the injunction and requested proof of damages confirmed by the State Insurance Commissioner. He noted in his decision that the insurance companies can recover lost profits in the future.
There is one big difference between Romneycare and Obamacare. The state of Massachusetts acknowledged that insurance companies might suffer economically with their version of health care reform.With the uninsured jobbing the system and only buying insurance when sick, it stood to reason the insurance companies would take a big hit. So their bill allowed the state to regulate insurance rate increases. Just like a utility.
Obamacare, however, neglected that little bit of reality. Either intentionally or to further obfuscate the pending cost increases of health care reform, they choose not to hold rate power over health insurance companies.
So, with Obamacare, when the tide of cost increases come from insuring the already sick and those who did not buy insurance and paid the fine until they got sick, Obamacare can do nothing to prevent the large rate increases seen in Massachusetts. Unless, of course, they remedy the oversight, after the fact.
So the plan sold as the path to reducing insurance costs in America, will actually see big increases in insurance costs and medical costs just as Massachusetts has seen.
Watch carefully what the insurance companies do in Massachusetts. Without relief from the state or the courts and faced with months of haggling with the insurance commission bureaucrats, they have two choices. Eat the losses or leave the state. Most are not writing new policies now. Some are not-for -profit. So, recovering losses with profits in the future is illogical.
The Bay State is giving all of America a look at the future of health care in the rest of the country. It should be big news, just as the future of green energy should be in LA and the rest of California. But it’s merely a whisper. Hard to explain.
