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It will just everyone's bracing themselves for the U financial hit that comes along with this fiscal -- some people in California.
Are about to get sucker punched by higher health care costs to.
Blue shield of California says they'll be reaching premiums by as much as twenty per -- As a result of the increase costs associated with obamacare but here's the kicker.
If that's not our ready blue shield of California has three point nine billion dollars of cash already on hand.
As nearly three times more.
As they're required to have so should they even -- allowed to Jack up their premiums this much and -- other insurers -- to follow suit.
Here to help me sort through.
The Stanley hot Feld former president and CEO of and Entegris health and author of the book political malpractice thanks for joining us -- there.
Thank you -- -- So I guess my question here is blue shield says that they want to raise rates by an average of 12% in some cases they'll be I've raised by as much as 20%.
Could you call -- the unintended consequences of Obama care.
Well it was certainly predictable.
When you begin to add things which are.
Favorable to consumers.
But perhaps very expensive insurance companies you could inspected the insurance these companies to cover their -- Preexisting conditions for -- is a very favorable consumer item.
But it's like calling -- homeowners policy and ask him after the your house is being burned can I get coverage.
So we've -- the insurance companies to do things which are essentially -- profitable so I think what we're seeing here is companies begin to cover their bets.
Serious say it was predictable but I -- that one argument is gonna be obvious the blue shield is a nonprofit organization.
They've got as we said three point nine billion dollars in cash on hand I think the minimum is something like 218.
So they're well above the minimum threshold as far as what they're required to have on hand.
Are they allowed to do this should they be allowed there raised there -- premiums by this much.
Well what we don't know is what went into their calculations.
Obviously they're trying to anticipate the normal rise in medical cost inflation.
Which is been going up astronomically for the last fifty years twice over regular rate.
Of inflation they're trying to anticipate all the new requirements under Obama care.
And I think particularly this may be a one time effort.
I think insurance companies may look at the present time and say we better get all the premium increase that we can get now.
Because we're gonna be under from real restrictions later on.
This is not welcome news is as we do face the fiscal -- here in a lot of folks -- Face potentially higher taxes in the new year now higher health care costs.
But you are making the indeed the reasoning behind this very simple and that is that their costs are going -- they're expecting an influx.
Of new patients to be coming in.
That leads -- -- the question do we expect others to follow.
In their footsteps.
I think it's quite possible.
What happens to blue shield -- beat up they get in the public media what -- insurance companies will do but we've already seen.
Employers without insurance that are self insured.
Like Wal-Mart begin to do this everybody sort of covering their bet now not knowing the impact of the new requirements on the affordable care.
So safe to say in the new year we could all face higher health care costs is that reasonable.
I think it's very predictable that you should expect your premiums to go up -- as people try to respond to the unknowns.
Thank you sorry add that civil -- of costs going up in the new year thank you so much Stanley -- Feldman -- thank you senator.