FOUL PLAY
Insurance company mistreatment
Every year, health insurance companies squirrel away billions of dollars in surplus. But can all that money really be just a cushion?
In 2008, Premera Blue Cross, a Washington-based nonprofit health insurance company, funneled surpluses to a failing for-profit subsidiary in Arizona—while hiking rates for customers in Washington state. According to the Seattle Post-Intelligencer:
“Statements filed with the Washington State Insurance Commissioner's office indicate Premera transferred $49 million to the struggling LifeWise Health Plan of Arizona between 2004 and 2007. Although the transfers aren't illegal, they've raised concerns that the nonprofit company is raising rates for Washington residents to subsidize an out-of-state for-profit venture… Premera's assistance to LifeWise comes as individual health insurance holders in Washington have seen yearly double-digit increases in rates and the state's main individual health insurance providers (Premera, Group Health and Regence) have amassed surpluses totaling $1.4 billion in excess of the amount required to cover claims.”
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