Insurer Cuts Health Plans as New Law Takes Hold

[boston bean]

The Principal Financial Group announced on Thursday that it planned to stop selling health insurance, another sign of upheaval emerging among insurers as the new federal health law starts to take effect.

The company, based in Iowa, provides coverage to about 840,000 people who receive their insurance through an employer.

Principal’s decision closely tracks moves by other insurers that have indicated in recent weeks that they plan to drop out of certain segments of the market, like the business of selling child-only policies. State regulators say some insurance companies are already threatening to leave particular markets because of the new law. And some regulators in states like Maine and Iowa have asked the Obama administration to give insurers more time to comply with some of the new rules.

“What you’re seeing is the beginning of some serious math and some posturing,” said Len Nichols, a health economist and policy expert at George Mason University. While some insurers, like Principal, are choosing to leave the business rather than make the necessary investments to stay, others may be simply trying to delay some of the new rules or overturn them, he said.

http://www.nytimes.com/2010/10/01/health/policy/01insure.html?_r=1&partner=rss&emc=rss

[DJ13]

1. Maybe we'll get lucky and enough quit that a single payer is the only option left

[JuniperLea]

3. Ha! Great minds and all that...

We must have hit "Post message" at the same time!

[DJ13]

6. Heres to great minds!

:toast:

[mdmc]

5. 1

[ejpoeta]

8. i was thinking that earlier.

[Nite Owl]

9. My first thought too

the way to single payer, let the insurance companies die and there is nowhere left to go.

[lamp_shade]

11. Single Payer here we come. This is what the repubs have been afraid of.

Grassley (I think it was him) even said so during debate.

[JuniperLea]

2. If they can't have their blood money...

They will take their marbles and go home. That's fine... they aren't the only company around... and if they all go away, all the better. It will force a hand at single payer.

[mdmc]

4. they will never be able to compete

as long as medicaid exists, it will show the for-profit-system as a fraud..

[frazzled]

7. This is how it's supposed to work

The government may have to give some waivers until the exchanges kick in in 2014, because they don't want people to lose the crappy insurance they have, but after that it's reckoning day for insurers like this and the McDonalds of the world, who are not offering real insurance to their employees.

In 2014, if McDonalds says, we can't afford to insure our people with "real" insurance, in which 85% of the premiums are actually used for healthcare, then boom, they drop it. McDonalds employees will be free to go to the exchanges, and for the first time get REAL health insurance. How will these minimum-wage workers be able to afford it? you ask. Because they earn so little, a huge amount of their premium will be paid by the government. And the good news is, that the more employers drop insurance, and the more workers who go to the exchanges, the more we get something like national health care.

Principal Financial Group is welcome to stop selling health insurance -- at least, after 2014. If they can't comply with actually paying for people's medical needs, then they shouldn't exist.

[cutlassmama]

10. YAY!