On 17 Aug 2004 15:28:07 -0700, (Dan Thomas) wrote:
Now, here in Canada, our taxes are rising because of the
nationalized health care plan. We supposedly have it good, but it can
take several years to get a hip replacement, maybe a year or more for
a simple MRI. Goverments simply don't run things any more efficiently
than the private sector, and in most cases not nearly as well. It's
fine to have cheap insurance, but if the services aren't available,
where's the benefit?

I read today on Canada.com that you're having trouble keeping enough
doctors up there. Perhaps cheap insurance doesn't pay well enough.

Gary

In article , Gunner says...

Depends on what :

"as insurers took a $15.5 billion capital loss on the sale of invested
assets."

It means the companies are gambling with the premium dollars.
They lost, we pay.

If they had won, they would not be kicking back to the policy
holders.

Jim


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Gary Coffman wrote in message . ..
On 17 Aug 2004 15:28:07 -0700, (Dan Thomas) wrote:
Now, here in Canada, our taxes are rising because of the
nationalized health care plan. We supposedly have it good, but it can
take several years to get a hip replacement, maybe a year or more for
a simple MRI. Goverments simply don't run things any more efficiently
than the private sector, and in most cases not nearly as well. It's
fine to have cheap insurance, but if the services aren't available,
where's the benefit?

I read today on Canada.com that you're having trouble keeping enough
doctors up there. Perhaps cheap insurance doesn't pay well enough.

Gary

That's part of it. We train plenty of doctors and nurses in
Canada, subsidized by Canadian taxpayer dollars, and then a bunch of
them run off to the US to make more money and pay less tax. Some of us
see this as a fair tradeoff for the US protecting us militarily, since
we are so underdefended, and others see it as just another ripoff in
cross-border trade.
More annoying are the large numbers of foreign-trained doctors
already here, or who are applying for immigration, and who can't get
past the medical bureaucracy. Canada needs thousands more doctors, and
these immigrants, well-trained doctors, are mopping floors and driving
cabs for a living while they fill out endless forms.
Dan

It being a dull day, I decide to respond to what jim rozen
foisted 17 Aug 2004 19:28:33 -0700 on
rec.crafts.metalworking , viz:

You mean they're taking my premiums and *not* paying for
folks to get treated by doctors - that they're simply
playing the shell game like the rest of the megacorps?

Nope. they are paying the bills, and with the left over cash, trying
to make a little money on the side. You'd appreciate if they make a
"killing" in the market, they don't have to raise rates "as much". (Of
course, when they lose money, somebody has to make it up.)

Right, they're *gambling* with the premium dollars. If they
make money, they keep it. If they lose money, they raise the
rates. It's pretty obvious that the insurance regulators are
squarely in bed with the companies they regulate if this sort
of crap is the norm.

So they should do what with cash excess to current needs? Leave it in
the desk drawer, or lock it away in the safe? Considering how most
premiums are paid by check, just deposit the checks and leave them there?


--
pyotr filipivich.
as an explaination for the decline in the US's tech edge, James
Niccol wrote "It used to be that the USA was pretty good at
producing stuff teenaged boys could lose a finger or two playing with."

It being a dull day, I decide to respond to what jim rozen
foisted 17 Aug 2004 19:28:33 -0700 on
rec.crafts.metalworking , viz:

And what kind of 'left over cash' do health insurance companies
have? No *wonder* there's a healthcare 'crisis' in the US, the
guys in charge are taking the money and playing the ponies with
it!

LOL.



Apparently the idea that there might be surpluses in the cash flow
cycle seems to have escaped you. That is, premiums do not come into the
office at the same pace as the bills,invoices and claims. Some days, there
is more cash on hand than 'bills' to pay. So what do the prudent person
with fiduciary responsibility do? It seems you believe the Insurance
Companies just put the extra case in a wicker basket and allow any of the
directors and senior managers to just grab some before going to the track.
Maybe that's what your insurance company does, but the ones I'm dealing
with tend to try to not only cut costs, but put the "idle" cash to work
making some money for the company.

--
pyotr filipivich
"With Age comes Wisdom. Although more often, Age travels alone."

In article , pyotr filipivich
says...

Maybe that's what your insurance company does, but the ones I'm dealing
with tend to try to not only cut costs, but put the "idle" cash to work
making some money for the company.

Define "putting to work" please.

In this case a casual inspection of the process reveals
the companies take the 'extra' money and invest it. If
the investments do well, they post extra profits and
everyone gets a bonus.

If the investments bomb then the companies say 'ooh,
we're "doing" poorly so we have to raise rates.'

IOW the 'making money for the company' paradigm means
heads they win, tails you lose.

The other issue is that for large companies, the outflow
*equals* the inflow. They rely on a steady stream of
premium dollars sure, but I'm certain that they pay out
at a steady rate as well.

Jim


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In article , pyotr filipivich
says...

So they should do what with cash excess to current needs? Leave it in
the desk drawer, or lock it away in the safe? Considering how most
premiums are paid by check, just deposit the checks and leave them there?

****, if they have that much extra loot in the place, they could just
reduce premiums and cure the present "healthcare crisis" that's
being talked so much about. THey'd be heroes!

Jim


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On 20 Aug 2004 12:55:35 -0700, jim rozen
wrote:

In article , pyotr filipivich
says...

So they should do what with cash excess to current needs? Leave it in
the desk drawer, or lock it away in the safe? Considering how most
premiums are paid by check, just deposit the checks and leave them there?

****, if they have that much extra loot in the place, they could just
reduce premiums and cure the present "healthcare crisis" that's
being talked so much about. THey'd be heroes!

Jim

So when Clinton had a tax revenue surplus..he should have refunded it
to the tax payers?

(though the surplus was only smoke and mirrors)

Gunner

"There is no difference between communism and socialism, except
in the means of achieving the same ultimate end: communism
proposes to enslave men by force, socialism - by vote. It is
merely the difference between murder and suicide."
- Ayn Rand, from "Foreign Policy Drains U.S. of Main
Weapons"

In article , jim rozen
wrote:

In article , pyotr filipivich
says...

Maybe that's what your insurance company does, but the ones I'm dealing
with tend to try to not only cut costs, but put the "idle" cash to work
making some money for the company.

Define "putting to work" please.

In this case a casual inspection of the process reveals
the companies take the 'extra' money and invest it. If
the investments do well, they post extra profits and
everyone gets a bonus.

If the investments bomb then the companies say 'ooh,
we're "doing" poorly so we have to raise rates.'

During the internet boom of 1996-2000, the insurance companies
participated in the stock market and made lots of money. Because they were
hauling in lots more cash than they were paying out, they started lowering
rates to steal customers. Naturally, the other insurance companies did the
same. When the market went bust, all that extra income disappeared and the
insurance companies started raising rates.

(This is only a partial explanation of recent insurance rate increases,
but it's a large part of the reason for the increases.)

--
Jedd Haas - Artist
http://www.gallerytungsten.com
http://www.epsno.com

On 20 Aug 2004 12:54:11 -0700, jim rozen wrote:
In article , pyotr filipivich
says...

Maybe that's what your insurance company does, but the ones I'm dealing
with tend to try to not only cut costs, but put the "idle" cash to work
making some money for the company.

Define "putting to work" please.

In this case a casual inspection of the process reveals
the companies take the 'extra' money and invest it. If
the investments do well, they post extra profits and
everyone gets a bonus.

If the investments bomb then the companies say 'ooh,
we're "doing" poorly so we have to raise rates.'

IOW the 'making money for the company' paradigm means
heads they win, tails you lose.

The other issue is that for large companies, the outflow
*equals* the inflow. They rely on a steady stream of
premium dollars sure, but I'm certain that they pay out
at a steady rate as well.

Premium income is steady, payouts aren't. Insurance acturaries
set rates so that over the long term, on average, premium income
equals settlement payments, but payouts are spikey. For example,
weather related claims due to snow or ice storms, hurricanes,
etc don't occur on a precise schedule. Some days, weeks, months,
or years, payouts may be large, other times they are smaller. The
company has to maintain reserves to cover the spikes. These
reseves are called "float".

Obviously, if income and payouts precisely balanced daily, an
insurance company wouldn't make any money, not even cover
overhead. They make their money the same way a bank does on
money deposited in a checking account, by putting the premium
money to work until they have to pay it out. They put the float
to work via short or long term loans, investments, etc.

This income from investing the float covers their operating costs,
provides their profits, and in the case of mutual companies some
is applied back toward reducing premiums, or directly paid back
to policy holders in the form of refund checks by charter and law.

Like banks, insurance companies tend to be conservative investors.
But even a conservative investor can be hurt if the stock market
crashes, or a real estate market boom goes bust. You can call it
gambling if you like, but it is the way any financial institution
operates.

Now insurance companies assume additional risks beyond those
of ordinary investors. Things like hurricane Andrew (a "storm of
the century") can strongly affect the size of the float. Premiums
are sized primarily by loss history, average cost of claims, etc,
but if a company's reserves fall below a certain level due to a
catastrophic event, they are obligated to raise rates to cover that
too. Otherwise, they wouldn't have the money to pay claims
during the next spike event.

On the flip side, during periods when losses are relatively low,
and investments are doing well, companies can lower their
premiums. Mutual companies are required to do this by charter
and law, other companies do it in response to competitive
pressure.

Medical treatment costs, automobile repair costs, home repair
costs, etc have skyrocketed over the last 30 years. Premiums
have generally risen in response. But through the 90s, investment
income was generally strong, so that compensated to some
extent for higher claim costs and served to keep premiums below
the levels they would otherwise have reached.

The economic crash after 911 wiped out a lot of those investment
gains, so we've recently been seeing sharply rising premium rates
because there is no longer enough investment income to subsidize
rates, and because the reserves have to be rebuilt to cover future
spike events.

Gary

On 18 Aug 2004 06:58:40 -0700, jim rozen wrote:
In article , Gunner says...

Depends on what :

"as insurers took a $15.5 billion capital loss on the sale of invested
assets."

It means the companies are gambling with the premium dollars.
They lost, we pay.

If they had won, they would not be kicking back to the policy
holders.

Not true for mutual companies. By charter and law, they are required
to kick back such gains to policyholders via either refund checks or
lowered premiums.

During the 90s, strong investment gains held down premiums which
would otherwise have increased much more than they did, because
of skyrocketing medical costs, auto repair costs, home repair costs,
etc.

After the 911 market crash, subsidies from investment gains are
no longer as strongly present, and premiums have risen sharply to
cover more of the actual costs of claims (and to rebuild reserves).

Gary

In article , Gary Coffman says...

Premium income is steady, payouts aren't.

Here I was restricting my discussion to health
insurance, whereas you are taking the broad
view. For my case, things are a good deal more
steady. For the overall picture of course you
are correct when all forms of insurance are
included.

The economic crash after 911 wiped out a lot of those investment
gains, so we've recently been seeing sharply rising premium rates
because there is no longer enough investment income to subsidize
rates, and because the reserves have to be rebuilt to cover future
spike events.

So the deal is, the insurance companies invest the money and
then give it back when you make a claim. Sounds to me like
a person could do exactly the same thing - invest their money
and then get the ROI on it, and use the principle for any
large hospital bills.

I guess what I'm saying is, if I want health insurance, I
go to an insurance company. If I want to invest, I go to
a broker.

Jim


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It being a dull day, I decide to respond to what jim rozen
foisted 20 Aug 2004 12:54:11 -0700 on
rec.crafts.metalworking , viz:
In article , pyotr filipivich
says...

Maybe that's what your insurance company does, but the ones I'm dealing
with tend to try to not only cut costs, but put the "idle" cash to work
making some money for the company.

Define "putting to work" please.

The usual ways that "money makes money". If you don't mind lazy money,
you put it in a passbook account at 1%. If you don't mind your money
doing something really crazy, you put it on Flying Sylvester to show in the
third.
Or you can put it to work in other ways, usually called "investing".
Short term commercial paper, treasury notes, stocks, commodity futures,
mutual funds, real estate, forex arbitrage, hedge funds, even CDs. The
ways that people "invest" money in expectation of making more money down
the road.
Of course, in the words of Will Rogers, the way to make money in the
Stock market is to buy a stock if it is going to go up. If it isn't, then
don't buy it. [Actually, the real way to make money on the street is to
provide the service. People buy, people sell, either way, you get a
commission.] Word of advice, do not invest in Nigerian Bank transfers, or
the Tappet Depreciation fund (they promise a fifty percent rate of return
in six months. What they don't tell you is that in six months, they'll
return half your money.)

This help?
--
pyotr filipivich
"With Age comes Wisdom. Although more often, Age travels alone."

It being a dull day, I decide to respond to what jim rozen
foisted 21 Aug 2004 11:46:33 -0700 on
rec.crafts.metalworking , viz:

So the deal is, the insurance companies invest the money and
then give it back when you make a claim. Sounds to me like
a person could do exactly the same thing - invest their money
and then get the ROI on it, and use the principle for any
large hospital bills.

Can you put that much money up?

The idea behind "insurance" is that the risk is spread out. If ten of
us kick in a hundred bucks to cover medical expenses, then collectively
"we" have a thousand dollars to pay the medical bill. But if two or more
of us claim that thousand dollars, the fund is going to be in deep
kim-chee.

So, can you write a check for 17,000 dollars to cover a "simple"
illness? If you can then you can self insure. But otherwise ... . (And
one problem with self-insuring is the age old one of "the money is just
sitting there ...")

I guess what I'm saying is, if I want health insurance, I
go to an insurance company. If I want to invest, I go to
a broker.

A good plan. Just remember, as the insurance company will have
"excess" cash on hand, sometimes on a day to day basis, sometimes on year
to year basis. Do you want them to just put it in the desk drawer? Little
chance of loss, but no chance of it growing.

--
pyotr filipivich
What is normal?
"Two sigmas either side of mu.
You bring the cow." drieux.

It being a dull day, I decide to respond to what Gary Coffman
foisted Sat, 21 Aug 2004 12:56:08 -0400 on
rec.crafts.metalworking , viz:

"as insurers took a $15.5 billion capital loss on the sale of invested
assets."

It means the companies are gambling with the premium dollars.
They lost, we pay.

If they had won, they would not be kicking back to the policy
holders.

Not true for mutual companies. By charter and law, they are required
to kick back such gains to policyholders via either refund checks or
lowered premiums.

During the 90s, strong investment gains held down premiums which
would otherwise have increased much more than they did, because
of skyrocketing medical costs, auto repair costs, home repair costs,
etc.

In 1999, the Episcopal Pension fund made an "additional" billion
dollars. That is, some shrewd investments in the market earned the fund a
billion more than was otherwise expected.

OOHS, the retirement fund for the Union did so well, it was able to
issue 13th and 14th month checks, up till 2001. But they face the fact
that there are more vested members not yet retired than working members.

oops.


tschus
pyotr



--
pyotr filipivich.
as an explaination for the decline in the US's tech edge, James
Niccol wrote "It used to be that the USA was pretty good at
producing stuff teenaged boys could lose a finger or two playing with."

In article , pyotr filipivich
says...

So, can you write a check for 17,000 dollars to cover a "simple"
illness?

Well let's see. A good rule would be 450 per month, that's the
number that started this discussion. Let's round off the numbers
and say *ten* months in a year. So at 9K per year, it would take
me four years to do this. But I've been working at my present
job for five times that length.

So yes, if my employer had simply given me the money, I'd have
enough to do that five times over.

Jim


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On 21 Aug 2004 11:46:33 -0700, jim rozen wrote:
So the deal is, the insurance companies invest the money and
then give it back when you make a claim. Sounds to me like
a person could do exactly the same thing - invest their money
and then get the ROI on it, and use the principle for any
large hospital bills.

I guess what I'm saying is, if I want health insurance, I
go to an insurance company. If I want to invest, I go to
a broker.

Yes you could put aside money yourself, if you're sure that
your investments will increase soon enough to cover any
hospital bills. With insurance, the company assumes the
risk that you *won't* have invested enough to cover a claim.
Your broker won't do that.

Gary

On 21 Aug 2004 22:54:03 -0700, jim rozen
wrote:

In article , pyotr filipivich
says...

So, can you write a check for 17,000 dollars to cover a "simple"
illness?

Well let's see. A good rule would be 450 per month, that's the
number that started this discussion. Let's round off the numbers
and say *ten* months in a year. So at 9K per year, it would take
me four years to do this. But I've been working at my present
job for five times that length.

So yes, if my employer had simply given me the money, I'd have
enough to do that five times over.

Jim

Who says two wrongs don't make a right?

What hasn't been mentioned is that insurance regulators require a
"reserve" before an insurance company can issue the first policy. That
means they must have the assets available to cover claims from day
one. They are risking their money on claims, not yours.

Okay, so I'm late, I missed the stafff meeting but jim rozen
wrote back 21 Aug 2004 22:54:03 -0700 on
rec.crafts.metalworking , and I'm just now getting caught up:
In article , pyotr filipivich
says...

So, can you write a check for 17,000 dollars to cover a "simple"
illness?

Well let's see. A good rule would be 450 per month, that's the
number that started this discussion. Let's round off the numbers
and say *ten* months in a year. So at 9K per year, it would take
me four years to do this. But I've been working at my present
job for five times that length.

So yes, if my employer had simply given me the money, I'd have
enough to do that five times over.

But would you have the money the first day? That's one of the "joys"
of insurance, day one of your coverage, you are covered. That's the bet
you're making, that before you can save enough to pay the bill, you're
going to need them to pay the bill. They're betting you won't, but ...
that's the nature of the game. As a rule, I don't bet against the house.


Jim


--
pyotr filipivich.
as an explaination for the decline in the US's tech edge, James
Niccol wrote "It used to be that the USA was pretty good at
producing stuff teenaged boys could lose a finger or two playing with."

In article , pyotr filipivich
says...

But would you have the money the first day?

Ah, you did not *ask* that question. So I did not answer it.
I only answered the one you did ask. The money works. Sure
it's a gamble, but don't forget, I had a factor of *five*
in there in my favor. I would not have to wait 20 years,
only four.

And there was enough left over to cover little stuff along
the way - not to mention whatever I've been putting in as
co-pays in the insurance I do have now.

It's not that far off.

Jim


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In article , Andy Asberry says...

What hasn't been mentioned is that insurance regulators require a
"reserve" before an insurance company can issue the first policy. That
means they must have the assets available to cover claims from day
one. They are risking their money on claims, not yours.

"Risk?" There's no risk. The size of the statistical
pool means that on average, they break even. Then they
figure in an automatic profit on top of it all.

I can see that maybe some other types of insurance carry
real risk - but health insurance? No way. Worst comes
to worst, they simply raise rates to recoup losses.

Jim


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