Sometimes it gets confusing with Blue Cross Blue Shield as there is also Wellpoint which is a for profit Blue Cross Blue Shield company that is sold on the stock market and what Wendell is speaking of here are the “other” Blue Cross Blue Shield companies that are “not” publicly traded companies and the profits and revenues they generate.  Wendell Potter worked on the other side for many years, so nobody has the knowledge better than one who was “hands on” for years in the industry.

Wendell Potter Tell All Book–Deadly Spin–One to Put On My List as “He Knows Algorithms and How they Create Profits”

Non profits as the name would suggest are not supposed to profit; however with insurance certain levels of reserves are maintained in case of a catastrophe an so forth and many state governments have questioned those over the years.  Wendell goes into detail here with a few more bit of information that explains how this works with the 33 Blue Cross plans.  There are certain government regulations out there on how non profits are required to conduct business and according to his figures and other reports the money they have on hand exceeds guidelines, by the millions, $29 billion above regulatory requirements.    image

In one example here in Texas, with everyone worried about meeting MLR, or medical loss ratios, the rate was 64.4% meaning there’s no problem here as 80 or 85 percent are the targets for spending premium money on healthcare and they are easily way under the mandate, but for consumers not necessarily good news as this means that consumers may not be getting care when funds are available.   Based on these numbers the report said that to fall within guidelines the company would have to “reduce” premium payments by 12%.  As he states, so much for competition keeping rates low in this instance.  In Tennessee the MLR for the non profit Blue Cross was 76.7 percent, so again so much for the worry and woes on meeting the medical loss requirements.

And Now A Word From Wendell Potter About Healthcare Reform and Medical Loss Ratios..

In addition to consumers their own agents that sell health insurance are also taking it imagein the shorts and many are having to adjust the services they offer or are considering another line of work so in other words don’t get suckered in to thinking that meeting MLR ratios are such a big problem for health insurers. 

Medical Loss Ratios Showing Devastating Effects With Health Insurance Agents and Consumers

There are some very strange non profit organizations out there today as this group of private equity firms (for profit) form a “non profit” group to discuss and determine “how to profit”, a big oxymoron there.

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When you look at where individuals are today even former HHS director Mike Leavitt sits on the board of a healthcare financial business so what does this somewhat tell you?  I don’t have a problem with someone making money but when the algorithms of profit are perhaps created for more “desired” results rather than “accurate” data it rubs everyone the wrong way. 

Former HHS Secretary Mike Leavitt Joins Board of Healthcare Financial Services Company

Back in 2009 I wrote about the reserves based on a little bit of information that had been made available and obviously this is not something that non profits may want broadcasted across the web.  Based on some of the information Wendell has researched 1 or 2 trillion might be a realistic guess if you added up all the health insurance reserves across the country as of December of 2008 Maryland found Care First Blue Cross Blue Shield reserves to be $1.7 billion in reserves.  image

Health Insurance Reserves – How much is in the till, could it be 1 or 2 trillion nationwide?

How do we keep up and audit this stuff, technology so again I come back to Congress using some updated technology as it will come before the House and Senate at some time and if they can’t efficiently and quickly pull information and all look at the same thing at the same time, the lobbyist show goes on and the financial fleecing of middle class USA continues, both greed and ignorance (digital illiteracy) being contributing factors.  The situation won’t change any other way until the people we elect get smart and deal with lobbyists in a different manner, with some intelligence and not be so vulnerable to a sale pitch for which may hurt consumes and give unfair advantages to businesses.   

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Once better intelligence is established it’s time for the next move, a Department of Algorithms or something like this for future laws and formulas to be filed, and I wrote about this back in August of 2009, maybe ahead of my time but not much has changed, algorithmic formulas shifting the money in the country and snowing and fleecing those who don’t understand.  BD

“Department of Algorithms – Do We Need One of These to Regulate Upcoming Laws?

But lest you think only those big New York Stock Exchange-listed corporations have figured out how to make money hand over fist while their base of policyholders is shrinking, take a look at the so-called nonprofit Blue Cross and Blue Shield plans.

Don’t think for a minute that the Blues are any more interested in your health and well-being than the companies that at least own up to being in business to make a hefty profit off of insuring the healthy and shunning the sick.

“Our analysis of the financial position of 33 Blue Cross plans suggests that their capital position has reached a level that’s difficult for the nonprofits to justify, and if sustained, will lead to significant tension between the nonprofit Blues, regulators and consumer activists,” McDonald wrote. “According to our data, the nonprofit Blues held a total of $52 billion in capital at the end of 2010, or more than $29 billion above minimum regulatory requirements.”

“Our analysis of the financial position of 33 Blue Cross plans suggests that their capital position has reached a level that’s difficult for the nonprofits to justify, and if sustained, will lead to significant tension between the nonprofit Blues, regulators and consumer activists,” McDonald wrote. “According to our data, the nonprofit Blues held a total of $52 billion in capital at the end of 2010, or more than $29 billion above minimum regulatory requirements.”

McDonald found that some of the Blues are spending far less than that these days. The medical loss ratio at the Texas Blues, for example, was just 64.4 percent last year.

Blue Cross, Blue Shield get richer by borrowing playbook of corporate counterparts | Analysis

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