Managed Care Matters

The national conference of insurance agents' annual legislative get together featured a panel comprised of CEOs and top execs at some of the nation's leading property and casualty insurers.

The gentlemen discussed terrorism reinsurance and the need for a federal backstop, contingent commissions, state reinsuramce pools, and state v federal regulation. All interesting topics, but I'm most worried about something that doesn't seem to have hit their radar.

Health care costs.

Yes, these guys are P&C insurers - they insure buildings, liability, the environment, cars, houses, businesses, boats and many other things. No, none of them are health plans per se. But they all are facing double-digit increases in the medical expense portion of their claims dollar, have been for years, and don't seem to be paying attention.

In workers comp, over half of the claims dollar goes to medical care; for the largest insurers that's about $1.5 billion annually. Auto insurers also pay a lot of medical expenses, as do medical malpractice carriers and liability insurers.

Yet the top execs don't appear to give medical inflation and health care costs the same attention they give to TRIA, reinsurance pools, or state v. federal regulation.

Maybe that's why their health care costs are going up so fast.