Well sure everyone is hurting, but don’t forget the big reserves (money that is not for operating, etc. just sits there for just in case circumstances) these folks all have too, maybe a trillion or better if you added them all up?  Also, it has not stopped Blue Cross from having a bunch of money to be poured into their new Venture Capital firm, so we don’t need to cry too hard here.

From January:

Insurers' reserves criticized

Update:  2 consumer groups disputing and want financial information relative to health care insurers in Washington...as the study finds 2.2 billion in cash surplus...if this is true I don't even want to think about how much California insurers might have.....insurers claim the figures are not correct...BD 

Two consumer advocacy groups in Washington are criticizing billion-dollar cash reserves held by the state's big three health insurance carriers and seeking big changes to the industry, including government-sponsored plans.image

Regence BlueShield, Premera Blue Cross, and Group Health Cooperative nearly tripled their cash surplus in four years, from $833 million in 2002 to about $2.3 billion by 2006, according to financial records submitted to state regulators and included in a study on health insurance. 

"The amount of money these guys are socking away begs that someone start holding them accountable," said Joshua Welter, of the Washington Community Action Network, a sponsor of the study. "We need a public answer to this problem, because the big bottom lines haven't equaled better coverage for folks."


Most have opened offices in China too and there are new plans to take advantage of tourism too.  If you are a concierge practice, they might look to drop you as contracted physician too.  I think if we all really knew how much money was just sitting around in reserve funds, we would all really be much more unhappier than what already exists today, and  wonder too are those funds tapped when they need to finance an acquisition as a simple example? 

They are still hard at work writing those algorithms and introducing brand new plans all the time, new plan = new algorithm to do some business intelligence calculations.  Just a side thought here, they might have enough funds to provide some bale outs too, but not sure if reserve funds can be used or not for that purpose, might be some legal technicalities there, but just a thought.  BD 

The 2 New Hot Words in Healthcare: Algorithms and Whistleblowers

The key factors we'll consider in 2009 will be pricing strategies, medical management, market segmentation, cash-flow generation, liquidity, and capital management strategies. This weak economy can pose a significant risk to insurers' business plans. They will have far less room for miscalculation in terms of estimating medical-cost trends, new product rollouts, new technology introductions, integration of new acquisitions, and the like. Any misstep is, of course, not good, but when margins are compressing and organic business growth is harder to come by, the potential for earnings and cash-flow damage increases with every mistake.

A Less Healthy Health Insurance Sector – BusinessWeek

Related Reading:

Blue Cross/Blue Shield of Massachusetts reports $57.6 million profit for the 3rd quarter 

BlueCross BlueShield Create New Venture Capital Organization
Health insurers reinvent themselves as money managers – Banks

California regulators to audit health insurers

Blue Cross Blue Shield starts new bank for customers
WellPoint to begin pilot Medical Tourism program with India

Insurer's Reserves Criticized
Private health insurance study finds disparity between profits, coverage

Beware of Geeks Bearing Formulas

The battle of the medical bills where nobody but the insurers win

Concierge Physician vs. Blue Cross/Blue Shield
Primary Cause of Personal Bankruptcy in America – Healthcare
Horizon Blue Cross- Blue Shield drops 2 Philadelphia hospitals
WellPoint settles Calif. lawsuit and Who’s going to China?


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