Thursday, October 31, 2013

Let's Talk Business

Over the past few weeks, I have heard politicians, press people, and one particular talking head, whom I consider an overweight jackass, so he will go unnamed, say some pretty nasty things about insurance companies. Very little of this derision is actually deserved. So let's look at it a little more logically.

Most insurance companies have stockholders or they are mutual companies, partially owned by their customers. They have a fiduciary obligation to run their companies in a manner most beneficial to the owners. 

They are not like the government that can pass out other peoples money with nary a thought. In fact we would all be better off if the people in government realized that they also have a fiduciary responsibility.

So insurance companies are required to try to be profitable, but they are highly regulated by the individual states in which they operate. They can only charge the rates that the state insurance administration allows. They are also controlled as to their plans and how they operate. If you took the time to check the profit levels of your average insurance company, you would find they they are within the norms of most reasonable businesses.

While the government can and does offer flood insurance to areas where they know will occur, a private insurance company cannot offer to cover preexisting conditions at a normal rate. Remember that fiduciary responsibility. The government could force them to. That is what is happening now with Obamacare. 

But the government cannot force a business to be suicidal. That is why the costs of everyone's insurance must go up and cheap policies must go away. All of the extra services being mandated  must be covered by everyone taking a hit. This is business 101. They knew what would happen from the beginning. I just don't understand how they thought they could sneak it by the American people. Did the think we wouldn't care. Did they think it would be just another footnote in the scandal of the week club. 

In my life I have had experience with both the government and insurance companies. Overall considering service and cooperation, I'll take the insurance companies.

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