FEDERAL TAX LAW BARS NON-PROFIT INSURANCE COMPANIES

Pasadena Sub Rosa ^ | September 26, 2009 | Wayne Lusvardi

[WayneLusvardi]

SLOGAN: "PEOPLE BEFORE PROFIT"

Stuart Butler - The Washington Times

Excerpt

Today's tax law bars member-owned mutual insurance companies, like Mutual of Omaha, from functioning as a nonprofit health insurance company. If Congress changed that we would at last see mutual insurers teaming up with organizations to offer private co-op health insurance as an alternative.

Link:

http://washingtontimes.com/news/2009/sep/24/coop-detat-an-acronym-does-not-a-co-op-make/

[johnandrhonda]

So is there also a Federal law that says they can’t intentionally limit their profit, to say $100 per year?

[proxy_user]

If they did that, they couldn’t get capital and would quickly go out of business.

[Mike Darancette]

I thought that non-profits could proide Medicare Advantage?

[muawiyah]

You are confounding "insurance company" with "medical care program". They call groups like Kaiser-Permanente "insurance" since they share risk.

The prohibition is against mutual life insurance companies from also underwriting healthcare operations.