Consumer group: Insurers kept surplus while hiking premiums

This isn't normal How much do you think this is contributing to our economic woes overall? Coupled with the records about of cash the for-profits are stockpiling. The picture begins to broaden.

Non-profit Blue Cross and Blue Shield health plans stockpiled billions of dollars during the past decade, yet continued to hit consumers with double-digit premium increases, Consumers Union found in an analysis of 10 of the plans' finances.

Insurers must keep surplus money to ensure they can pay policyholders' medical bills if unexpected market conditions develop. Yet seven of the plans examined held more than three times the amount regulators consider the minimum needed to do that, according to a report being released today by the non-profit consumer group.

[Source]

This is not that hard to understand. Insurance companies make money off of gambling - the stock market etc. Since there is zero money to be made there, and since they are obliged to continue to abide by their contracts with the insured, the are having to keep cash to pay claims directly from money collected instead of paying via profits from gambling. The fact that they claim to be "non profit" has no bearing. The insurance companies are all tied together, as the debts rise from gambling misfortune, they'll have to operate just like the rest of us.

Well, of course. Within reason though? In balance? And they're non-profit? How's that work? Does the money they make on our money then someone, at any point, go back to paying claims? Or reducing costs? Seems like their tables are off or something. Or they're just hoarding cash like the Fortune 500 are.

[edit on 7/28/2010 by ~Lucidity]