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via The Medical Quack: Health-Care Overhaul May Cost $1.5 Trillion Dollars – Who’s Going to Pay?

Interesting that this is estimated to be about the same amount of money that is (or was) in health insurance company reserves, roughly totaled. Others now are finally asking the same question I posed back in late 2008, where’s the reserves? AIG was not a beginner with fraud with reserves as court cases go back to 2003 and 2005 with not maintaining an adequate amount of money, relating to greed, individual greed, investments, etc.

We all know the story on where AIG’s reserves were, nowhere to be found. Over the years, different state governments have also questioned the amounts of the “rainy day” funds kept. There are laws that require insurance companies to have reserves to keep them from going insolvent, but again where are they invested is one big question. This does pose a question though, how solid are the reserves of the health insurance companies, and are they in better standing than what happened with AIG? Are the reserves being audited?

With the current government overhaul of healthcare, it might not be a bad idea to call in some numbers and find out how healthy the reserves are from the companies selling health insurance so we have some up front business intelligence. If there are not online SEC audits, etc, in place, who knows we could have a potential make up for a ponzi like program in place. If we don’t ask questions, we won’t find out.

I recently had a reader state that this would be ultimate bottom line feed, to have to bail out a health insurance company in today’s economy.

According to what I understand*, this sort of thing cannot happen in India, because of the regulations imposed by the IRDA.

I’m no communist or socialist, but I strongly believe that health insurance ought to be under such mandatory regulations that protect the insured.  I also strongly believe that all medical insurance companies must be run as not-for-profit organizations. It should be a criminal offence to falsely deny coverage just to increase the profitability of the insurance company.

*If you know Tamil, please see my friend Narain’s excellent post related to this.

In case you’ve wondered, like many others, what one trillion dollars looks like, see this.