Say what you want about health care reform. But don't tell me that the insurance industry isn't corrupt to the core.

1.
Back on June 15, our health insurance company (I'll leave it unnamed here) sent us a letter. In this letter, the company told us that our premium is going to increase, effective in August.

Here's what the company said about the increase:

We are working hard to provide our customers with quality insurance at an affordable cost. In spite of our efforts, medical costs continue to go up due to increased use and higher charges for health care products and services. New technology and procedures often improve the quality of care but also contribute to rising costs. Periodically, we have to adjust payment rates to compensate for the rising costs of health care.

These payment adjustments are not based on your individual claim costs. They are based on the combined costs of all company policyholders who have your same plan. Everyone covered by this plan in your state is receiving a rate adjustment.

So that we're clear about the scale of this increase: the company is raising rates twenty-four percent.

You read that right. Twenty-four percent.

2.
On July 5, not even three weeks later, the company sent us another letter. Here's what it said in this new letter:

This letter is to inform you that you will receive a refund of a portion of your health insurance premiums. This refund is required by the Affordable Care Act--the health reform law.

The Affordable Care Act requires [this insurance company] to issue a refund to you if [this company] does not spend at least 80 percent of the premiums it receives on health care services, such as doctors and hospital bills, and activities to improve health care quality, such as efforts to improve patient safety. . . .

The Medical Loss Ratio rule is calculated on a State-by-State basis. In your State, [this company] did not meet the Medical Loss Ratio standard. In 2011, [this company] spent only 72.5% of a total of $291,552,395.00 in premium dollars on health care and activities to improve health care quality. Since it missed the target in your State by 7.5% of premiums it received, [this company] must refund 7.5% of your health insurance premiums.

3.
To get this in perspective, let's look at a few numbers:

    $291,552,395.00 Premiums collected
   x          0.275 Percentage of premiums not used for health care (27.5%)
    ---------------
    $ 80,176,908.62 Dollar value of premiums not used for health care

And:

    $291,552,395.00 Premiums collected
   x           0.24 Percentage increase (24%)
    ---------------
    $ 69,972,574.80 Dollar value of increase

4.
So, on June 15, the insurance company says that it imposed this 24% increase on policyholders in Florida because "we have to adjust payment rates to compensate for the rising costs of health care." This, even though it collected premiums far in excess of the so-called "Medical Loss Ratio" standard.

5.
Or, as I understand it, we might phrase it this way:

The insurance company collected roughly $80,000,000 (yes, that's eighty million dollars) in premiums from its customers that it did not use for health care.

However, because the company did not collect enough money to pay for health care, it raised premiums so that it can collect nearly another $70,000,000 (yes, that's seventy million dollars).

6.
Now, I know that insurance companies have to pay salaries.

But clearly, something is amiss here.

7.
By "amiss," I mean "evil."