The Washington Insurance Commissioner has officially done the right thing: he has denied Premera Blue Cross’s bid to become a for-profit insurer.
It took 56 pages to say “that’s a really lousy idea that will cost people money.” Basic logic says that if the company wants to be profitable at the end of the year instead of just “even,” rates must go up or expenses must go down. Perhaps both. Either way, policyholders lose.
To me, what is more interesting are the figures in the local news coverage: they insure 1.2 million people; they are the sole coverage for 850,000. In contrast, they spent $35 Million trying to become for profit. That’s $29 per person they insure that did not help a single person get medical care. To me it represents $29 too high a premium paid. They also spent $125 Million on the rollout of a new insurance plan. That’s another $104 that didn’t pay for a single office visit, medication, or treatment.
A total of $133 in wasted premiums. And they wonder why the Insurance Commissioner won’t let them become a for-profit company.