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Where oh where do our insurance premiums go....

Health Care 2009

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#1 Spectacles

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Posted 11 September 2009 - 07:42 PM



BISMARCK, N.D. -- Blue Cross Blue Shield of North Dakota used premium payments to fund $15 million in employee bonuses, cover $35,000 for a retirement party and pay for other questionable expenses, according to a state audit released Tuesday.

Insurance Commissioner Adam Hamm said he ordered the company to make changes after insurance examiners found inappropriate or excessive expenses paid with policyholders' dollars. He said the nearly inch-thick report raised questions about compensation, travel policies, investments and severance packages.

Hamm said the report showed "a lack of judgment" by board members and senior management. It was the first audit of the nonprofit company since 2004.

"I expect and demand that those things won't happen again," Hamm said.

Company officials said Tuesday that changes were already being made when Hamm ordered the audit in March, following criticism of a sales managers' trip to the Grand Cayman Islands that cost $238,000. The company's chief executive at the time, Mike Unhjem, was fired later that month.

"The culture of this organization is very different than it was a few months ago," said board chairman Dennis Elbert.

The company provides health care coverage to more than 375,000 North Dakota residents and 75,000 nonresidents.

Hamm said that of the $418 million in the company's administrative expenses over the past five years, the audit found "millions and millions of dollars in excessive expenses."

The report said that premium payments funded nearly $15 million in employee bonuses that were almost assured regardless of performance, a $3.5 million investment in a hotel in Fargo and sales reward trips to resorts totaling $1.2 million.

In one case, the audit found that $34,814 was spent for a party for a retiring vice president.

And remember, in the Baucus bill, which for some ungodly reason seems to be the front-runner, insurers will be required to spend only 65% of premiums collected on actual health care. That gives them 35% for other stuff--ads, administrative costs, bonuses regardless of performance, and trips to the Cayman Islands and other rewards. And yet funding this sort of culture with our premium dollars is more attractive to some than paying for a Medicare-like government administered policy. We often think government = waste. In reality, the greed and irresponsibility of private business = waste just as much, if not more.
"Facts are stupid things." -Ronald Reagan at the 1988 Republican National Convention, attempting to quote John Adams, who said, "Facts are stubborn things"

"Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing." -- Paul Krugman

#2 Rhea


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Posted 11 September 2009 - 07:49 PM

I'm as close to speechless as I ever get. :p Truly I have no idea what to say that won't violate the guidelines.
The future is better than the past. Despite the crepehangers, romanticists, and anti-intellectuals, the world steadily grows better because the human mind, applying itself to environment, makes it better. With hands...with tools...with horse sense and science and engineering.
- Robert A. Heinlein

When I don’t understand, I have an unbearable itch to know why. - RAH

Everything is theoretically impossible, until it is done. One could write a history of science in reverse by assembling the solemn pronouncements of highest authority about what could not be done and could never happen.  - RAH

#3 Themis

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Posted 12 September 2009 - 11:52 AM

Blue Cross and United Healthcare between the seem to have Tennessee locked up, yet Blue Cross runs tv ads and billboard ads... not cheap.  And lets not forget the various insurance agents that sell the policies be they individual or group... they get commissions.  

Nope, no waste in the insurance industry, nada....

I've been off United Way since the LA one hired my friend's ice show to provide entertainment at a celebratory function at a swank hotel ballroom...  I doubt that was financed by the attendees.
Cats will never be extinct!

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