Are You Insured?

Taking the Seven train into the city this morning, I looked up at a billboard. It was touting healthcare that had been serving customers for 75 years (somehow they didn't put up the McDonald's "over x billion served" figures). Since I was standing, I was more or less eye-level with the fine print. It stated that the ad only referred to two plans, one an HMO, with something of a further disclaimer that Blue Cross and Blue Shield was (voila, not an insurance company but) an association of associated plans.

By now the train had left the green swath that Corona Park makes toward Flushing Bay, with the lithe vista of suspension bridges in the background, and was traveling over the tin and brick structures of Corona itself. I found myself wondering -- what is the legal advantage of taking a large corporation and fragmenting it over many smaller structures? Does it reduce liability? It didn't seem likely as, reported on "60 Minutes" some time ago, health insurance companies are only liable, in a lawsuit, for the amounts they would have been required to pay under the terms of the insurance. Does it help to hide the actual profits?

The buildings on the street caught my eye. We were approaching Woodside and there was a new condominium with a large "For Sale" banner. Every unit of a condominium would be insured -- required by the mortgage. In fact, every building, as far as the eye could see, was surely insured; some of the large apartment complexes were doubly insured -- the owner would have insured them against fire and other calamities and the renters would frequently have renters insurance. Inside each unit would be people who had insurance to cover their health and life. The cars driving on the street were required to be insured. The heavy machinery working on BQE had insurance, as did the workers. As far as my eye could see, I couldn't imagine a single item that was not insured -- businesses, highways, railroads, buildings, cars. More than Microsoft, insurance had entered every inch of the fabric of our lives.

So what was the point of this association of associations? Is it simply like saying "we are not a whole pizza pie, we are a collection of eight slices?" It's certainly an alternate way of looking at things. The train continued and I found myself staggered by the amount of money that must flow into insurance coffers. Connecticut General, for example, offers insurance "products" that include life, health and retirement; but they've built property and business casualty "slices" and "divested" them to places like Bermuda (where it would be my best guess, they are still owned by some of the parents or partners at CG). In fact, the wording on the website states that "The divestiture enables CIGNA to focus its resources on its global health, life and pension businesses." However, the very next sentence on their website is that "CIGNA launches TimesSquare Capital Management, Inc. as the company's independent, dedicated asset-management operation." I guess they don't want to get too focused.

The train had passed through the railyards of Long Island City and was sloping toward the dark interiors of the tunnel. I found myself wondering at the resistance that the insurance companies had shown to the new healthcare initiative. Oddly, I thought, if the majority of those getting coverage would be the 48 million uninsured we hear about everyday. If one of the provisions of the plan is that corporations will be required to provide insurance for their employees, there's not much competition for the insurance companies. Is it simply the unknown? The long dark tunnel from which we can no longer see the vista, no longer be quite certain where we are? Is it the fear that the tunnel may leak, may cause us to lose our time, lose our way? Or is it simply that the competition might force them to rein in their profits?

As long as no one can see the larger picture -- the large parent companies that sell the emperor's new protection products, in various pieces, from anything that might befall -- we will never see how much money is at stake, or even how much of it flows into the pockets of Congress. My guess is that if insurance covers everything as far as the eye can see, they've got Washington covered as well.