Healthcare Group Is Not Something To Model

Published by the Tucson Weekly, Mailbag, 03/12/2009:

After reaching a total deficit of more than $23 million by 2007 (according to the Arizona Office of the Auditor General), Healthcare Group of Arizona had to take radical steps, like stopping acceptance of new subscribers and reducing promised benefits to existing clients. When these types of actions are taken by private insurers, it is seen as a colossal failure and a cautionary tale, yet somehow, the Tucson Weekly‘s reporter still finds the organization laudable.

The organization’s mission is indeed very honorable, but no entity can survive when they ignore for so long the basic premise that your revenues must meet or exceed your expenses. The tragedy is that the failure of this program–due to the assumption of management and others in state government that they could simply continue to come to the Legislature year after year with their hands out to cover any shortfall in income–left thousands without a care option or in a plan with far fewer benefits than they were promised.

We need health-care reforms built on solid financial foundations, not just good intentions. The history of Healthcare Group should be taken as a warning, not as a model.

Taylor Davidson, Broker, Insurance Division, The Ruboyianes Company

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