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By Staff | Mar 5, 2010

After major health care companies just reported billions in record profits, they sent out rate increases of 39 percent in California, 56 percent in Michigan, 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregon. In the state of Iowa, my insurer, Wellmark, is raising rates an average of 18 percent, some as high as 25 percent.

Health insurance premiums are out of control having no relationship to inflation whatsoever. Wellmark is building a $194 million new headquarters in Des Moines, but, according to one newspaper report, the rate increase had no impact on the project. That probably means that they already had the cash for the new building, so the rate increase goes in Wellmark’s pocket.

Are doctors, nurses and hospitals getting 25 percent raises? After just making record profits, where is all the money from the rate increases going? Profits of the 10 largest insurance companies rose 250 percent from 2000-2009. The top 5 took home profits of $12.2 billion in 2009, up 56 percent from 2008.

People will pay most anything to be well and health insurance companies use that to their benefit. Health insurance companies supported the Democrats’ health care “reform” bill. That’s because there really wasn’t a lot of reform in it. That should tell us that the bill is flawed. Health insurance companies would not support real reform. The proposed bill just feeds the fat pigs 30 million more customers to pay them more insurance premiums, taxed from others.

Why would they not like that? They would probably only have to raise rates next year 5 times, instead of 10 times, the rate of inflation.

I suppose adding premiums of more insured lowers costs, but not from any reform of the system. What’s to say that they would even pass lower costs on to insured? In return for giving health insurance companies so much more business, they agree to stop screwing people by refusing to insure pre-existing conditions.

Online exchanges would be set up so that people could shop for coverage without being turned down. 80 percent of premium income must be used for paying claims.

Medical tort reform is just a way for Republicans to push back against lawyers who support Democrats more than the impact it would have lowering medical costs.

The recent premium hike didn’t seem to bother the WSJ editorial board, which defended it saying this is what would happen if Obamacare passes.

That confused me. Did they mean that insurers goosed rates to get a jump start on the Democrat’s health care bill? Does that mean next year if the bill is enacted that premiums will double? I thought that this premium hike was a deafening alarm that real reform is long overdue. I don’t think that online exchanges will bring enough competition. Health care issuers should lose their antitrust exemption, but they will still function as an oligopoly collectively fixing prices so they don’t hurt each other’s bottom line. The WSJ editorial was focused only on California. Hey guys, these insurance companies are coming after their customers no matter what state they live in. Why does health insurance commerce stop at state lines?

I don’t think that the Democrat’s health care bill has enough change in it to lower health care costs. Only competition can do that and there is not enough competition in it. All it does is tax those that Democrats see as rich in order to pay the health insurance premiums of the poor. That’s the gut shot of their bill. They even tax us enough “to lower the deficit.” What a crock!

Giving insurance companies more customers to pay them more premiums is not going to change the system as much as Democrats suggest. It will just give insurance companies access to taxpayer wallets. The democrats’ health care bill adds to the deficit, because it must raise taxes to pay for it that otherwise could have gone to deficit reduction.

“We don’t want the government running health care . . . no public option!” We heard that one a lot.

Does the government run ag lending? I don’t think so. Yet the Farm Credit System competes with ag banks to see to it that there is competition in ag lending. The Farm Credit System has filled in the holes ag banks left and by giving farmers another lending option keeps bankers honest.

Are health insurance companies more honest than bankers? I don’t want the government to run health care anymore than I want them making all the ag loans, but the bottom line here is that the health care industry is raping us. Doing nothing is not an option, and not adding enough competition is not going to fix anything, either.

This is not government taking over healthcare, this would be government promoting competition that has been allowed to wither.

The current plan appears to be to hold a health care summit and see what comes out of it and then pass the most they can pass using 51 vote Senate reconciliation before Democrats lose control of Congress next election.

Passing nothing is likely the worst political option for Democrats. Passing one that doesn’t work, which is defined as not controlling or lowering health care costs, would make this attempt at reform a failure.

Health care insurers are sticking us as hard as they can this year out of worry they may not be able to do so next year.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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