Tuesday, June 18, 2013

Follow the money

During the Obamacare debate, I would occasionally talk about healthcare with someone who would spout off about how high health insurance rates were.

Of course, they believed that the evil insurance companies were simply ripping off policy holders.

When I would proclaim that insurance companies just didn't make that much money you could just watch the jaws drop.

How do you know that health insurance companies don't make money.

It's simple. If there was a lot of money to be made, more insurance companies would be getting into the business. You don't think guys like Warren Buffett would pass up an easy paycheck do you?

Instead this is what you're seeing in the business......................

Aetna Inc. said it would stop selling individual health insurance policies in California next month, and nearly 50,000 existing policyholders will have to find new coverage by January.

The company's announcement Monday comes a month after it opted not to participate in California's new state-run insurance market for consumers, a key component of the new federal healthcare law.

Aetna was a distant fourth in the state's individual health market with a 5.2% market share in 2011, according to Citigroup data. Anthem Blue Cross, Kaiser Permanente and Blue Shield of California dominate that business with a collective 87% market share in the state.

Aetna said it would continue to sell health plans in California to small and large employers as well as offer products related to Medicare, dental and life insurance. A company spokeswoman said it was "fully committed to serving the needs of our 1.5 million members in the state."

The company said it expected to have about 49,000 individual policyholders in the state by December. Regardless of its decision, it estimated that up to 30% of those customers would seek other insurance through Covered California, the state-run health exchange that opens Jan. 1.


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