[CitizensTruth] financial predator overshoot; A.M. Best revises health insurance rating

[Hal Snyder]

Economic shocks from the financial crisis bring collateral damage to  
the health insurance business.

The item below is from Don McCanne's Quote-of-the-day single-payer  
list. Within the dry business prose is a picture of working people  
paying more for less health care and going without health insurance  
in increasing numbers, as insurers battle with other financial  
megasaurs over dwindling cash to be extracted from the people.


Overall, the analogy with ecosystem collapse from predator overshoot  
should be apparent. But we are conditioned not to see such things.  
Compare Historical Overfishing and the Recent Collapse of Coastal  
Ecosystems, Is California on the Brink of Environmental Collapse?,  
Mass Extinction Underway, etc.


Begin forwarded message:


> From: "Don McCanne" <don at mccanne.org>

> Date: September 23, 2008 11:23:42 AM CDT

> To: Quote-of-the-Day <quote-of-the-day at mccanne.org>

> Subject: qotd: A.M. Best revises health insurance rating to negative

>

> MarketWatch

> September 18, 2008

> A.M. Best Revises Rating Outlook of U.S. Life/Health Companies to  

> Negative

>

> Although fundamentals for the vast majority of life/health companies

> are currently sound, uncertainty continues to be widespread in terms

> of the future direction of the economy, real estate values, interest

> rates, equity markets--both domestically and globally--and liquidity.

> All of these factors have had an impact on life/health insurers'

> balance sheet strength and operating performance.

>

> As the federal government takes unprecedented steps to promote

> stability in financial markets and limit damage to the broader

> economy, A.M. Best notes both the political uncertainty of the

> upcoming Presidential election as well as the enhanced regulatory

> scrutiny that currently pervades the life/health industry. These

> issues are most prevalent across health insurance product lines, which

> are influenced significantly by regulation at both the federal and

> state levels. As a result, A.M. Best has revised the rating outlook on

> the health insurance industry to negative.

>

> With employers dropping coverage, and politicians and regulators

> seeking ways to provide coverage for the uninsured, the individual

> medical market has become ultra competitive. A.M. Best has similar

> concerns with the small group medical market as large, national

> managed care companies compete despite low profit margins.

>

> Moreover, the current economic environment is placing additional

> pressures on the managed care sector. The commercial market has been

> extremely competitive for some time with limited growth potential.

> Layoffs and bankruptcies will impact commercial enrollment, while cost

> factors could pressure employees to drop coverage. Many publicly

> traded managed care companies have increased their financial leverage

> over the past year mainly for share repurchase and acquisitions (with

> goodwill), all of which increase balance sheet risk. While A.M. Best

> acknowledges that managed care companies tend to have more liquid and

> conservative investment portfolios due to the short-tailed nature of

> the claims, the issues that have emerged on Wall Street, and in the

> real estate market, are expected to result in writedowns of certain

> investments.

>

> <http://www.marketwatch.com/news/story/am-best-revises-rating- 

> outlook/story.aspx?guid=%7B4190EA15-8E83-466A-8FD1-5C44D3E63F4A% 

> 7D&dist=hppr>

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