Business is supposed to be Trump's strong point, and yet Trump spouts not only drivel but lies and distortions on the healthcare business. He doesn't know that the whole industry is in crisis because of Obamacare. About 2/3rds of insurers are asking for $2.9 billion in help to make up for losses. Yet Trump claims they are raking in the profits. From the CNN debate in Houston Thursday:
One would think that was right given the individual mandate (which Trump likes) which is supposed to require every tax payer to have health insurance. But, that's not true. Healthcare insurers are on the ropes. Even some big players like Moda have had to drop out of the business in certain states and have required big influxes of parent company cash to be allowed to continue to offer individual coverage in Oregon and AlaskaDonald Trump: “The insurance companies are making a fortune on every single thing they do. . . . Right now they are making a fortune. . . . I know the insurance companies. They’re friends of mine. The top guys they’re friends of mine. . . . The insurance companies are making an absolute fortune.” (1 hour mark)
In Oregon only two providers made a profit in 2014. Two. Even Kaiser had a small loss. The biggest profit margin: 2%.
Nationally, healthcare insurers are in similar trouble.
That's why defunding automatic reimbursement from taxpayer money that Marco Rubio talked about stopping in the last debate has had such dramatic consequences. It may very well bring Obamacare down because it will bankrupt or severely cripple so many healthcare insurers.
Donald Trump knows nothing about the health insurance business. He hasn't done research, and his "friends" in the industry haven't given him good information. Even in business profitability and making payroll, Trump's supposed area of expertise, he is ignorant.
6 comments:
Fortunately, the Oregon legislature is looking at a corporate tax on gross receipts to support health care and education.
That will fix it.
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Heh, OG. New taxes always fix things until it becomes obvious there is never enough money to make poorly run programs profitable or effective.
I'm not sure Trump actually has any friends - the word has become politi-speak; everybody is a "friend" to a politician. Although Lindsey has deviated from that norm of late.
In the case of Moda, the provision of health insurance seems to have been less an issue than profligate waste. They spent $40 million to rename a sports arena (supposedly to get their brand out there). And at a time when they were bleeding money, they nonetheless paid their CEO $14 million a year and handed out hefty "bonuses" to other execs.
That's why they're now under state supervision in both remaining markets; they are forbidden to award "bonuses" absent permission from regulators in each state. And Moda not only got a cash infusion from their parent company - OHSU gave them $50 million as well.
But hey, as OG notes, a corporate tax on gross receipts to float "health care" and public vegetation will make everything okay. Until the businesses move.
Good analysis, Max. Also, I believe Moda purposely under priced their premiums in order to gain market share (and then be reimbursed by the Risk Corridor program). And I think I've already said that my brother believes whoever thought of that got a big bonus. It would have been a great plan if the Feds kept their word. You get great market share, and your losses get reimbursed by other insurers or the taxpayers.
But, the fact remains that 2/3rds of health insurers nationwide were in the receiving line rather than the extra receipts paying line. And even Kaiser, which was in the paying line, didn't make a profit in 2014. Health insurers are not rolling in money. Obamacare has given them sicker people and low reimbursing Medicaid people. They lose money on both. And they haven't gained all those healthy young people who pay high premiums and get few benefits.
As for Trump's friends. Everyone is his friend unless they oppose him. Then they instantly become stupid, nasty liars. Notice how Rubio has now gone to the nasty liar line? Even, apparently nastier and more of liar than Cruz. One can hardly believe that possible after what Trump has been saying about Cruz since Iowa. When the nasty liars drop out of the race or stop opposing Trump they are automatically friends again.
Not to mention that everyone likes Trump. Just ask Donald. He's the fountain of truth on others and himself. Gag.
Also, I believe Moda purposely under priced their premiums in order to gain market share (and then be reimbursed by the Risk Corridor program). And I think I've already said that my brother believes whoever thought of that got a big bonus. It would have been a great plan if the Feds kept their word. You get great market share, and your losses get reimbursed by other insurers or the taxpayers.
Yep, you pointed that out previously, TD, and I suppose it bears repeating. Moda pulled a lot of dirty tricks and thought they'd get away with it. And they might have, had not the feds reneged on their promises.
Sure - healthy young baristas were going to cover the costs. But then Obama made sure that they could stay on Mommy & Daddy's insurance until they hit age 27. And they get hit with a fine if they don't buy insurance after that age (but the IRS can only deduct the fine from their tax refund - ha, ha, ha).
Thanks for the reminder about the 27 year old problem. I forgot about it. As you say, it's another major money loser for health insurance companies.
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