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Philadelphia Inquirer article gives a short history of the Penn Treaty "rehab" debacle and where it stands now...
Seven years later, Penn Treaty is still "in rehabilitation." But the deficit has grown: The state's current actuarial estimate is $4 billion. Losses grew as customers aged and actuaries recorded costs that might have passed quietly to reinsurance - a sort of insurer underworld of risk-swapping - if Penn Treaty had been liquidated when it was first taken over.
At that size, Penn Treaty would be the biggest health-insurance company failure in industry history, according to data from the National Organization of Life and Health Guaranty Associations.
Penn Treaty's loss will be covered by solvent health insurance companies, and passed on to their owners and policyholders, when a state plan to liquidate Penn Treaty is finally approved by Commonwealth Court. A Nov. 9 hearing is set before Leavitt.
Guaranty groups such as Pennsylvania Life & Health Guaranty Association pay costs from failures such as Penn Treaty's by assessing successful insurers a surcharge on their policies in states where the failed firms had customers.
Penn Treaty and its affiliates are so broke that their unpaid obligations for Pennsylvania are expected to top $500 million, "close to or at the 2 percent cap" for annual surcharges on Pennsylvania health-insurance policy premiums, said Sean McKenna, spokesman for the national life and health guaranty group.
Pa. braces for largest health insurance failure in U.S. history
Seven years later, Penn Treaty is still "in rehabilitation." But the deficit has grown: The state's current actuarial estimate is $4 billion. Losses grew as customers aged and actuaries recorded costs that might have passed quietly to reinsurance - a sort of insurer underworld of risk-swapping - if Penn Treaty had been liquidated when it was first taken over.
At that size, Penn Treaty would be the biggest health-insurance company failure in industry history, according to data from the National Organization of Life and Health Guaranty Associations.
Penn Treaty's loss will be covered by solvent health insurance companies, and passed on to their owners and policyholders, when a state plan to liquidate Penn Treaty is finally approved by Commonwealth Court. A Nov. 9 hearing is set before Leavitt.
Guaranty groups such as Pennsylvania Life & Health Guaranty Association pay costs from failures such as Penn Treaty's by assessing successful insurers a surcharge on their policies in states where the failed firms had customers.
Penn Treaty and its affiliates are so broke that their unpaid obligations for Pennsylvania are expected to top $500 million, "close to or at the 2 percent cap" for annual surcharges on Pennsylvania health-insurance policy premiums, said Sean McKenna, spokesman for the national life and health guaranty group.
Pa. braces for largest health insurance failure in U.S. history