Well, now the whiny liars have upped the ante, claiming that they lost a bunch of money in the first three months of 2010, mostly thanks to the extra money they had to reserve against the losses they anticipate under the new rates. It will be interesting to see whether we get another War on Accounting, where Deval Patrick accuses the state's biggest insurers of the dastardly use of Generally Accepted Accounting Principles in order to embarrass his awesome government program.
And indeed, it's not impossible that there's a strategic element to this; there's always discretion in how companies reserve for losses. There is also always the possibility of accounting error. But those possibilities are not unlimited, because financials have to be signed off on by auditors who are keenly alive to the possibility of ending up on the wrong side of a lawsuit if they wink at obviously misleading representations. And four different companies probably didn't all make the same accounting error.
There's a depressing possibility, even a likelihood, that this is our future. It's hard to simultaneously expand demand, while lowering the incentives for supply (i.e. Medicare reimbursements), without having some pretty dramatic mismatches between the two. There's an old adage common in restaurants and engineering that goes "Good. Fast. Cheap. Pick Two." Change that middle word to "Universal" and you've got a pretty good summation of the problem that Massachusetts now faces--and that the rest of us soon will.
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