Low interest rates are killing health care insurance firms

Big health-care insurance firms are struggling to find a profit in this low-interest-rate environment, which is a cause for concern for opponents of the doctor-assisted suicide movement that is gaining momentum in the US, including New Jersey.

It is a tough market in general for insurance underwriters, which are facing escalating health-care costs.

Critics say some insurers would be satisfied to see many insured patients swiftly end their lives — that would help them save on rising industry costs that can no longer be offset by investment income.

Patrick Brannigan, executive director of the New Jersey Catholic Conference, told The Post that many oppose physician-assisted suicide because it is a direct threat to anyone viewed as a significant cost liability to a health-care provider.

A troubled health-care system and legally assisted suicide, when combined, are a “deadly mix,” according to Marilyn Golden, senior policy analyst of the Disability Rights Education & Defense Fund. Golden, a disability rights activist, warns that as soon as assisted suicide is legal, “it immediately becomes the cheapest treatment.”

“Direct coercion is not even necessary,” Golden, said, “because insurers deny, or even merely delay, approval of someone’s expensive life-sustaining treatment — they will be steered toward hastening their death.” There is already some evidence out of Oregon, the first state to legalize assisted suicide, to support this view, she added.

Health insurers seemingly refused to pay for the treatments recommended by doctors for two cancer patients there.

Instead, the insurers offered to pay for alternative “treatments,” which included assisted suicide, according to Golden.

This broken, profit-driven health-care system, as some call it, is anathema to many opponents of assisted suicide, which is now permitted in five states, with a renewed push in the Tri-State area recently.

The so-called “Aid in Dying” bill that would allow terminally ill patients to be prescribed medication to end their lives just passed the New Jersey Assembly on Thursday, but it hasn’t been posted for a vote in the state Senate yet.

Analyst say the low investment returns eked out by insurers may be behind this thinking on insurers’ role in assisted suicide. US health insurers have made money through the years by pricing their products appropriately, based on certain risk parameters, and through investment income of the reserves they must hold — as required by law — in anticipation of paying claims, according to Mike Fitzgerald, a senior analyst following the industry at Celent.

“Because of the low interest yields on government bonds, which regulators mandate they hold in significant amounts in order to reduce the investment risk, insurers can no longer count on this as a source of income,” according to Fitzgerald. “Thus, the pressure is on to improve their core operations and to grow.”

The insurers are under severe cost pressure, which can be offset either through hiking prices and premiums, or by reducing operational spending, Fitzgerald said.

US health-care spending already accounts for some 18 percent of GDP, or nearly $2.8 trillion in 2013.

But US insurance companies reject the claims.

“We haven’t taken a position on the ‘assisted-suicide’ provisions, nor has AHIP taken a role at the state or federal level on these bills,” Clare Krusing, a spokeswoman for America’s Health Insurance Plans (AHIP), the health insurance industry trade group based in Washington, told The Post.

Go to Source