“JP Massar” - Sebelius and HHS Bow Down Before the MEGA Health Insurance Company.
March 10, 2011 Wed Mar 09, 2011
by jpmassar
I'm not making this up. There really is a MEGA Life and Health Insurance Company. And yesterday, the Department of Health and Human Services granted a waiver to Maine's individual insurance market -- dominated by (who else?) MEGA.
There are exactly three companies that compose 99% of that market:
- MEGA Life and Health Insurance Company
- Anthem Blue Cross Blue Shield of Maine
- HPHC Insurance Company
with MEGA claiming 49% for itself. What does granting this waiver mean?
Instead of these insurance companies being content to take 20% of premiums paid for overhead and profit as is required by the new Health Care Law -- The Patient Protection and Affordable (sic) Care Act -- these bloodsucking maggots companies will be allowed to continue to extract 35% of premiums paid for obscene CEO salaries overhead and profit. This threshold percentage is known as the medical loss ratio.
The decision is "rooted in the particular circumstances of the Maine insurance market," the letter ((from HHS)) reads...
MEGA had told Maine during preliminary discussions that it "would probably need to withdraw from this market if the minimum loss ratio requirement were increased."
Can you say extortion? How about blackmail? What about 'We would squeeze blood out of a turnip if it was necessary to meet our revenue goals.' ?
Instead of surviving on a mere 20% margin, these companies will be allowed to engorge themselves on a 35% margin, 75% higher than other insurance companies in the same market in other states. Not only have these companies 'cornered the market' in Maine, but they have now managed to leverage their triopoly into a threat so large that Secretary Sebelius and HHS feel they are incapable of calling their bluff.
MEGA Life and Health Insurance Company is a subsidiary of HealthMarkets, Inc, which is a privately held company. No information on CEO compensation or profit levels seems to be available. However, we know that HealthMarkets, through it's subsidiaries, operates in at least 44 states. If its owners can suck the blood out of people earn profits in 43 states other than Maine under the existing laws of the United States, one would be inclined to imagine they could figure out how to do so in Maine as well.
HHS has granted other waivers with respect to the medical loss ratio. In fact, more than 1000 of them. But those have been for mini-med plans (the sad tale of which you can read about here: McDonald's: It's Not a Burger, And It's Not Health Insurance). This is the first time a waiver has been handed out for a standard insurance policy.
Not only was it handed out, but HHS granted the waiver for the entire interrim period until 2014 when MEGA, like all other companies and plans, will have to conform to the 80% loss ratio. Why does HHS think MEGA can suddenly go from a 65% threshold to an 80% threshold in 2014, when it claims it cannot do so now? If HHS really believes MEGA would suffer such hardship at a 65% threshold today that it requires the granting of a waiver, why didn't HHS at least demand a transition: say, 70% for 2012, and 75% in 2013, leading into the 80% mandate in 2014 ?
Whatever HHS's logic, it's over. The self-employed in Maine will continue to pay through the nose, more, in theory, than their peers in other states. And MEGA and Anthem executives will laugh, as usual, all the way to the bank.