User:Joelglee/sandbox

In addition to the excess administrative burden attributable to the multi-payer health insurance system in the United States, a number of observers point to the reserve funds held by private health insurers in the United States as excessive. Under a government run single payer system, these loss reserves are unnecessary. reserves are a prudent hedge against unanticipated or unpredictable costs of providing health care coverage to diverse populations. These reserves are regulated in most states by insurance commissioners who typically set minimum reserve requirements as part of a rate review process. For the largest insurers, these reserves have grown to represent significant holdings. State insurance commissioners have continued to approve rate hikes in their states that include additional contributions to these loss reserves. In practice there is no method suggested for setting an upper limit relative to risk for these reserves by the National Association of Insurance Commissioners (NAIC). The largest health insurers invest these reserves. The yield on the reserves can represent a significant income source for the insurance company. These reserves, to the extent that they exceed reasonable risk protection contribute to the rising and persistently high health care costs in the US. The Consumers Union in a 2010 report assessing the reserves of ten Blue Cross and Blue Shield plans found the average reserves were 4.25 times the NAIC required minimum. Three of the plans had reserves more than 5 times the required amount. The reserves can also represent a significant barrier to entry for any company proposing a new health insurance plan. As the health insurance industry consolidates, these barriers to entry for a start-up health insurer can reduce competition. It is within the realm of possibility that state insurance commissioners could argue that these reserves represent excess premiums charged to rate payers. At the establishment of a nationwide single payer system these reserves could be claimed by the states to reimburse rate payers or be provided to a national reserve fund if the single payer system is established as a separate trust fund in the same fashion that Medicare and Social Security are organized. THIS LINE -->