August 7, 2010 at 7:21 pm in INFORUM
Medical inflation cited as cause
Medical inflation, after calming down somewhat last year, is stirring once again in North Dakota at a yearly rate of 8.8 percent.
Tags: BCBS, blue cross blue shield, Health Care, medical inflation, news, North Dakota 65 Comments »
For individuals, a 12.2 percent rate increase took effect May 1st. Now three months later the Blues want another 9% increase. Whats next, a raise every month? The Blues just have everyone singing the Blues nowadays.
I wonder if they are still going to exotic countries for there meetings? After these increases they sure can afford to.
Well-loved. Like or Dislike: 45 13
Christmas must be coming. Time to collect the money for the yearly bonuses for the upper management and the sales force of this Non-Profit.
Bonuses, what better way to make sure they remain Non-Profits now that their yearly, two week, all expense paid vacations have been curtailed?
Well-loved. Like or Dislike: 41 8
This is a good reason why people should get health insurance directly and not through work. Then instead of complaining, people could take their money and go elsewheres. Also some anti-monopoly limit on market share to guarantee competition. My dentist has said his agreement with BCBS not only is for lower costs to BCBS patients but that these lower costs cannot be offered to any other healthcare provider (NOTE: That is hearsay, but what I was told).
Hot debate. What do you think? 18 14
I didn’t know BCBS offered dental ins.
When I had the ‘Gold Plan’, I still had Delta Dental for dental insurance. Wonder when that happened?
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Quick Google search shows BCBS of ND offers dental insurance. I also had Delta Dental and now have someone else, all without changing employers.
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Hidden due to low comment rating. Click here to see.
Make state employees start to share part of the burden of their cost of health insurance to them and their families. Highly paid 9 month working teachers and state employees get health insurance and retirement benefits paid for by the taxpayers. We need legislators to grow a pair and stand up to the thugs that run their unions to say enough is enough. If employees started paying for their share of the premiums, they may think twice about running to the ER or doctor for every sniffle.
Poorly-rated. Like or Dislike: 32 45
What makes insurance executives any different than any other executives? Who do you propose should run these companies that are responsible for paying out hundreds of millions in claims each year?
You defend teachers, which is fine, but then you talk about placing the blame “where it belongs” and the best you can come up with is executives? You are every bit as ignorant as the people blaming teachers.
Poorly-rated. Like or Dislike: 10 20
I propose a single payer system. That way only one payer has to process claims. Therefore we wouldn’t need ANY insurance companies with all the wasted health care dollars they use. Thus, only one set up executives that we the people could control.
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Pete – I blame insurance executives because the offer no added value to the health care in our country, but yet they feel entitled to millions upon millions of dollars in annual bonuses. For profit insurance companies erode the health care system by undercutting payments to the health providers. This in turn increases the cost on the uninsured, or the individual health insurance purchaser. In addition to this they turn around and raise premiums on their own customers. There is a difference between the file clerk at BCBS/Noridian working through mountains of paperwork getting paid $9.00/hr and the insurance exec that robs with both hands to fill his pockets.
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Sorry, reply is above (or below, depending on where this ends up). Your original post is missing and my response posted in the wrong place, evidently there are some bugs going on.
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Perhaps you can provide documentation on that “millions and millions of dollars of annual bonuses” thing. I doubt you’ll find what you’re looking for. What drives costs up are people who don’t take care of themselves or bother to learn about health, big companies like Sanford spending millions on sponsorships, and the cost of the health care itself.
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Alan, you can get firm documentation by calling BCBS of any state and requesting a detailed annual report, but here are some news stories from the recent years.
It happens everywhere from what I can tell. Bonuses alone are in the multi-million dollar range. Also, there have been cases of some BCBS operators stockpiling billions of dollars in total. Some states have maximums on what they can carry over from year to year, others don’t.
I do realize that there is a lot more to this issue than executive pay, and there isn’t a cut and dry solution for every issue with the system. I think executive pay and bonuses are a big issue. These bonuses are based on the revenue of the insurance company. When an executive is negotiating pay rates with a hospital, that bonus is directly on the line. They negotiate down what they will pay to the hospital for a wide range of services, and in exchange, the hospital, trying to meet it’s operating costs, has to raise the rates for patients that are either with other insurers or uninsured. Also, when policy is being written for what an insurance policy will and will not cover, that bonus is on the line again. Suddenly there are only certain medications and services that are covered.
This is only the tip of a very big iceberg, but rate changes are where the most people are affected in the most obvious way. Pharmaceutical companies, pharmacies, retail corporations (Wal-Mart, Target, etc.) and heath care providers are also part of the issue. Each one working to lower their costs, negotiating prices, sometimes to a point where profit on some services and products is minimal and then in return they raise prices on other services or products or other patients in order to maintain or grow their profit level.
I don’t have an answer to this problem. I only started to comment on this article when Liberty and Kevin decided to drag teachers into the argument (no idea where my first post went by the way). Teachers are policy holders just like anyone else with a BCBS policy. The fact that they are working jobs that are funded through taxes has nothing to do with health insurance rates. Most employers offer insurance to their employees. Why should teachers be denied that?
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North Dakota teachers are “highly paid”?
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Six figure total compensation for two married teachers sounds high to normal people.
Hot debate. What do you think? 26 27
Funny how recently Sanford has announced a partnership to spend millions on a fitness center and over $300 million on a new hospital (just a few years after spending millions refurbishing their current one). Sanford gets accolades for spending this money and BCBSND, who ends up having to charge their policyholders for this spending, get rasberries.
This media and public stupidity is the reason no effective health care reform will ever happen.
I do get a kick out of the person complaining that reimbursement rates are too low. Just last week someone else was complaining that insurance companies do nothing to hold down costs.
Well-loved. Like or Dislike: 37 10
apples and oranges
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So there cost went op 5.5% and they asked for 13% Good deal for them if they can get it. The still ended up getting a larger increase than what their cost went up.
Hot debate. What do you think? 20 10
You are looking at a single year. If you look at the past 5 years you will find that premium rates have not gone up as fast as actual costs paid out. There was almost a full two year period where premiums didn’t go up at all due to Adam Hamm’s political grandstanding, combined with a premium refund prior to that, and the fact that Hamm never grants the full amount asked for.
Poorly-rated. Like or Dislike: 16 37
You didn’t answer my question. Without executives who would be running the companies? Of course they add value, they are running the companies for crying out loud.
People like you seem to get hung up on executive pay because you can’t comprehend why some people get paid what they do. But people with the ability to run large corporations don’t work for cheap so if you want competent and stable leadership you need to pay the market rates. Even then, the pay of these executives only amounts to a fraction of a percent of premium rates.
Oh, and by the way, this is The Forum, based in North Dakota. BCBSND is non-profit.
Poorly-rated. Like or Dislike: 13 30
@ Pete and Jeremiah…Executive pay is usually a fairly marginal percentage of overall operating budgets. Also, knowing a few people in upper level management positions, it’s not as glamorous and easy as you think it is. I won’t go into details, but trust me. However, I do believe executive pay in the US is out of control being they make many, many, many, times more than your average worker (an amount that is higher than any time in the past). But I don’t think we’re going to change that overnight. It takes a while to change something that’s now entrenched in the “culture.” Non-profit really is a misleading term. Basically what it means is that any “profit” from a particular year will only be used within the organization…not paid to shareholders (this is a basic description but close enough without specifics). What can this “profit” be used for? Pretty much anything as long as it “stays in the company”, so to speak. Please correct me if I’m wrong. The problem is that our entire country is based on spending. How many of us have a boat, jet ski, or snowmobile we took a loan out for? A car we took a loan out for? A house we’re paying double for because we pay it off over 30 years? We all enjoy the spending and in order to bring us back down to Earth we will ALL need to take a pretty significant hit in our standard of living (just my opinion). Find me a person who will be first in line to have a lower standard of living and I’ll give you the keys to everything I own (not really, but you get what I’m saying). Yes, we probably do need to cut back on various government spending, but who wants to get cut first? Those of you in the military? Those of you receiving subsidies? Those of you getting tax breaks that were enacted in the last 10 years? Easier said than done. But, in my view, the economy will take care of its self no matter how long we try to delay the inevitable. If it isn’t as bad as some say we won’t be worrying about it in a few years. If it is as bad as some say it won’t matter how much we squabble and try to “Band-Aid” it because I doubt many are willing to make the necessary reduction in standard of living to fix it.
Well-loved. Like or Dislike: 19 3
Yup..it’s those evil insurance companies. Meanwhile, under the new health care plan, your employer must now add your medical insurance coverage to your W2. That’s right, now you get to pay taxes on your previously untaxed coverage. Furthermore, flex accounts will no longer be used for non -prescription medications, sorry diabetics, your insulin is now taxable. If you have a special needs child the flex caps at $2500, as of now there is no cap, so you better hope your sons 10K wheelchair doesn’t break down. I’m sure glad were making those evil rich pay their fair share.
Hot debate. What do you think? 19 17
Viking, you don’t pay tax on it. It is just listed on them for record keeping.
And the flex accounts fall under the “cadillac” category. It is fair that people who don’t have a flex account have to pay tax on the money they use for contact lens cleaner, bandaids and aspirin while those that do…don’t?
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Sorry Christy, On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,
as modified by sec. 10901) Sec.9002 “requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”
There are over 20 new taxes that go into effect dealing with just health care. As far as “fairness”. The worst thing a government can ever do is try and regulate fairness. For instance the top 5% pay 90% of the taxes so is this fair? I don’t consider insulin and handicapped children’s needs, “Cadillac” by any stretch of the imagination. The example I used of the child in the 10K wheelchair was a real one, and now this mother is frantically trying to figure out how to pay for the care this child receives on their fixed income. I don’t want to sound like a pestemist all the time when it comes to our government, but I have lived long enough to see that government intervention always leads to increased costs, military and post office for example, and a decrease in services, Medicare/Cade and Soc. Sec. This was a bad bill that should never have been passed and is still opposed by the majority of Americans. One more fairness example. This bill was written to cover the 30 million uninsured, now the other 280 million of us have to suffer with it.
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Christy is correct. It’s only on the W2 for record keeping. It is not taxed.
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Few things to note Jeremiah: Most of your articles don’t apply to BCBS of ND. In the one that does, the company did meet performance expectations, and the executive pay was not out of line.
Perhaps most significant of all, Hamm negleted to mention that these “employee bonuses” are not really bonuses at all. It is called Pay at Risk. What Noridian does is take the fair market value of compensation, subtract a percentage of that from all employee salaries, and only give that percentage back to the employees if the company meets performance standards. Trust me, employees would love to get rid of this “bonus” and get paid fair market value for their services up front.
But you see, that’s how many of these articles are slanted. A lot of incomplete and/or misleading information.
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What the heck? Why do my replies to Jeremiah keep ending up above? This is getting difficult to discuss with posts going every which where.
To summarize your articles are either missing important information or don’t apply to BCBSND at all. See my 8/12 8:33 reply above for details.
One more note, the uninsured generally drive up costs for the insured as they often are unable to actually pay for their services.
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Nothing is posting where it should. I give up, I think my point is made anyway.
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So, where is BCBSND in that list there, Jeremiah? Perhaps you should check North Dakota records…not seeing millions on millions there.
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Did you look at any of the stories that I linked to? The very first one on the list is about BCBSND. Here is the link again. http://abcnews.go.com/Business/wireStory?id=8521707
Here is an excerpt from the article, pertaining to last years audit of BCBSND:
“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.”
I would call that millions and millions.
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That $15 Million was not for bonuses, it was for Pay at Risk and involved all employees. See above for description. It was not assured.
Like any large company, BCBSND makes investments to stabilize its finances. The hotel investment made money.
And even with the reward trips, BCBSND’s marketing costs were well within reasonable limits and a more cost effective way to retain good marketing talent than higher salaries.
And now you know the rest of the story.
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Pay At Risk is a joke. It comes down to an unearned bonus. There was not ONE person who go their salaries adjusted down when Pay At Risk was implemented. Where would all those overpaid marketing people go if they didn’t get a raise? Let them leave if they want. Plenty to fill those shoes.
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Actually before Pay at Risk it was called Performance Incentive Plan. What happened before that I don’t know, but I do know that today’s salaries are adjusted by doing regional comparisons, then taking away a percentage that is only paid if the company meets performance goals.
Call it a bonus if it makes you feel better, but it is ONLY earned if the company maintains its standards, which are quite high by the way.
As for the marketing folks, if you are such an expert on what people are worth why don’t you tell us exactly what they should be earning? And Please be sure to back up your figures with actual data.
Poorly-rated. Like or Dislike: 3 13
Keep telling everyone here that those salaries are adjusted down by the pay at risk program. They are not. Pay At Risk is an unearned bonus no matter how you try to spin it. Take away the Pay At Risk program and see how many executives leave. None. Where would they go? Where would they make that kind of money for the little work they do? Also, the problem is that you are comparing Noridian salaries to regional companies that actually create products or add value to a product. Insurance companies add no value to health care. Itâ€™s all wasted health care dollars. So as far those marketing folks, they are overpaid by as much as they make. We wouldnâ€™t need them in a single payer system.
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plaifl, my assertion about Pay at Risk is backed up with actual salary surveys done by independant companies. All you have is your personal insistance that it is and added bonus and that pay cuts don’t result in any turnover or difficulty in filling positions. Obviously you don’t know a whole lot about running a business, huh?
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And as far as your claim that insurance adds no value and isn’t a product, well, unlike car insurance, you are currently under no obligation to purchase health insurance if you don’t think it’s a worthwhile product. Yet.
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In a single payer system, all those insurance companies wouldn’t be needed. And insurance companies add no value to health care. Period.
I do know something about running a business. And in business you try to eliminate overhead and waste. That’s why I’m suggesting to get rid of the overhead(waste) caused by all those insurance companies and give me a single voice to negotiate better health care prices.
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Well, I guess we will be finding out for sure. Now that under the new health care law there can be competition in the state, if BCBSND’s costs are as reasonable as you say, no problem, but if someone can beat them….
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There’s competition now. You just don’t hear much about them because The Forum doesn’t publicize their rate increases like they do for BCBSND.
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There hasnâ€™t been competition in health care since we paid for health care with chickens. Competition must be at the Provider level to do any good anyway. Assume all the providers in ND say they are going to charge $110.00 for a doctor visit. Then it doesnâ€™t matter how many insurance companies try to compete, they all have to pay out $110.00. Plus then the insurance companies have to add their 10-25% administrative costs.
Providers will never compete. The only competition is on services that are NOT covered by insurance such as LASIK and plastic surgery. Therefore, if provider wonâ€™t compete, then the only thing that will work is a single payer system that would allow us to negotiate better health care prices and get rid of all those wasted insurance company dollars at the same time.
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BCBSND administrative costs are under 8%. Even the politically grandstanding Adam Hamm agrees to that.
The problem now is that providers compete on an amenities and services level, not on costs. I do agree that making them compete on costs is a good idea. However a single payer system is still going to pay every provider the same so there’s still no competition on prices.
The only way to force providers to compete on price would be to make the consumers pay more of those costs directly. There are policies out there like that but they aren’t very popular.
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Providers will never compete so the only way to negotiate better health care prices is through a single payer negotiation process.
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And yet somebody else on this very page is complaining that the rates insurers negotiate now are not enough to cover provider expenses. Hmmm.
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Some providers will always complain about not getting paid enough. Even if it’s a lie. They pay their medical cartels’ lobbyists to lie for them. They complain all the way home while driving their Escalades to their million dollars mansions. BTW â€“ even the providersâ€™ expenses would go down if they only had to deal with a single payer instead of hundreds of insurance companies. Hmmmm.
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So now claims of underpayment are a lie. And anybody supporting private enterprise must be lying as well. And part of a cartel. Nice touch.
That’s in contrast, I suppose, to the people pushing the reform that passed and now they don’t know what it actually is or how to implement it. Not to mention the original costs they swore by have now skyrocketed.
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Why do the Medical Cartels’ (including Noridian) have lobbyists? Answer: Money. Why do the Medical Cartelsâ€™ lobby against a single payer system? Answer: Money. The Medical Cartelsâ€™ know that in a single payer system that single payer could negotiate better health care prices and eliminate insurance companies. Iâ€™ll bet you pay into your Noridian PAC just to protect your job. Not for what would be best for the country. Still you don’t post a solution. Why?
Competition at the provider level will not do much, if any good. For one, providers very, very rarely ever get paid the actual amount they are charging. Every insurance company has what they call a profile or allowed amount for every service and any amount over that profile is taken as a provider discount. For example an office visit with a doctor is billed for $110 but the insurance company’s profile amount is only $70, the provider has to discount the additional $40 (as long as the provider is participating, meaning they have a contract with said insurance company). If you see a non-participating provider they could charge you for that amount, hence the reason you are advised to see participating providers. This is also where it DOES help to have insurance, if you have to have a $5000 procedure done and the insurance’s profile amount is $3000, you automatically save $2000 if they are participating, even if they apply the $3000 to your deductible or whatever your plan specifics are. If you didn’t have that crappy insurance you hate so much, you would be responsible for the whole $5000. Another reason provider competition will not help is because most members do not take the time to get to know their plan and what providers are considered in-network vs. out-of-network or participating vs. non-participating let alone that they should see Provider A because they are cheaper than Provider B. I’ve seen it many times, “I didn’t know they were out of network, why do I have to pay extra”, sorry buddy, you have to take responsibility for your healthcare too. Insurance companies and providers go through tons of contract negotiation to try and help patients out but a lot of them think it’s a system out of their control and they shouldn’t have to do anything. All they care about is what is coming out of their pocket, and how much money is being paid to the execs that spent $100,000+ on an education so that they could make a lot of money and enjoy the perks of taking all the heat the public has to throw at this hated industry. How much you make is generally a result of how much you spent – don’t hate the people that make a ton of money just because they spent a ton getting an MBA and you chose not to go that route.
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A single payer system is the only system that will allow us to negotiate better health care prices. Insurance is a complete waste of health care dollars. Thereâ€™s no value added to health care by insurance companies. None. BCBSNDâ€™s own Vonebbers, Tim Huckle, and Mark Tschider alone waste over $1,750,000.00 of subscriber dollars for no value added to health care. Itâ€™s all wasted.
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Pete – How many CEOs, Sr VPs, VPs, Assistant VPs, and Managers per capita does Noridian have now? Now multiply that by hundreds of insurance companies. All that money is wasted. There’s no value added to health care. None.
As I explained to you before, even in your utopia of a single payer system, private companies will be doing the claims processing just as they do Medicare and Medicaid. Most of the companies who currently do this type of work have executive salaries that make Noridian executive pay look like peanuts. Go ahead, look it up. It won’t go away.
And again, processing claims and providing coverage are services. By your logic there are very few jobs in the country that “add value”. Perhaps you’d like to tell us what you do for a living today, and then I can determine if you are adding any value to society of if the government should take over what you do.
It could go away. We’d only need one entity to process claims. And that entity’s salaries could be controlled by the government too. How many government Medicare employees make over $500,000.00 per year? None.
There are many many companies that add value in this country. Any manufacturer that creates a product adds value. Any company that maintains those products or improves those products adds value. Any construction worker adds value. Farmers add value because they create product. And Hospitals/Providers add value to health care (but thereâ€™s no controls in place that requires them to compete like other companies). Insurance companies add no value to health care. You can call it a â€œserviceâ€. But itâ€™s not a â€œserviceâ€ thatâ€™s needed in a single payer system. Itâ€™s all wasted health care dollars.
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Again, tell me what you do, and I’ll make the determination of whether or not it is of any value to society.
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Better yet, why don’t you tell me what you do. And shouldn’t you be doing it? Or is this what Noridian executives do?
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Sorry, but if you are not going to open up your career to the same type of scrutiny that you give others, I’ll just assume that the government can do your job better and for less money and that you personally provide no value to society. Not much else to discuss I guess.
Sorry, but you haven’t discussed any solution up to this point. You’ve given no solution to health care prices and your company adds no value to health care. It’s all overhead.
I’m retired. I used to work at an insurance company (actually worked). That’s how I know about the waste. Every single day I wished that the government would implement a single payer system to eliminate the waste. I would have gladly given up my job for the benefit of the entire country. In a second.
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So in other words you took full advantage of a system you consider wasteful and useless for your own personal benefit. Kind of like the executives you like to complain about. Yet you want us to believe you would have loved to give it up for the good of the country.
You are entitled to your opinion, I’ll leave it at that.
Yes, I had a job at an insurance company. But I actually worked unlike a whole lot of your overpaid executives (taking advantage of the system). I never ever gave any money to the PAC since it’s not what I believed in. And yes I would have quit in a second if a single payer system would have been implemented. No problem. Not my opinion but fact. What about you? How much do you make posting on the internet all day? How much retirement money will you get? Golden parachute?
I see. You were apparently the only person who actually did any work, so that means you weren’t taking advantage of a wasteful system. The fact that they paid your salary is meaningless.
I also don’t give any money to any political group. Nor am I an executive, nor do I get paid to make postings, nor do I have any kind of golden parachute contract. Nice try though.
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I didn’t say I was the only worker. There were plenty of real workers at the insurance company I worked for. I realize now that I was a worker working for a company that didn’t add any value to health care and that bothered me. Yes, they paid my salary and that was pretty much meaningless. Of course you don’t get paid for posting. However, you’re getting paid while you post and you should be working.
And there you have it…do you use your Medicare, of which you are not paying the entire cost of your care? BTW, if you calculate how much you paid into Medicare, you’ll see that you will have a lot more spent on your care than you put in as taxes. As for Social Security, how soon will you exceed the amount you and your company contributed? Why should we believe you “worked” when you worked? You say you saw a lot of waste; why didn’t you do something about it? That’s what’s so interesting. So many people say executives or managers contribute nothing to the operations of companies (not just insurance companies). If you don’t have someone qualified running the place, you end up with no company, no jobs, no insurance, no Social Security, no Medicare. But that’s all right, isn’t it. As long as you can stick it to people who apparently managed to succeed with their talents. I see it every day, people complaining life isn’t fair because they can’t get ahead. Most of the time it’s because they don’t try, and want something for nothing or something that someone else is paying for, without taking some responsibility upon themselves.
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I’m retired but not eligible for SS/Medicare yet. But when I am I sure will be glad. I saw a whole lot of waste, but I won’t say names. Pete, however, is a prime example of the waste that goes on. Not his real name however.
I don’t want something for nothing. I want something for the best possible price and the least overhead. Is that too much to ask for?
Alan – I didn’t see a solution in your post. Could you post a solution?
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You make a lot of assumptions with your accusations, don’t you plaifl?
I haven’t assumed that you haven’t posted a solution. You never have.
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The best system is one where the patient pays for his own care.
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I think Pete sounds like a NDBCBS executive trying to justify his big fat bonus.
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