Principal Financial Drops Medical Insurance

One of the natural consequences of the recent medical insurance regulations that have been passed has been the fact that some insurance companies are getting out of the business. One of the biggest companies to do so has been the Principal Financial Group. The group has left the medical insurance industry altogether, and while they cite reasons other than the health care legislation there is plenty of speculation that the decision comes, at least in part, as a response to coming changes.

The issue has become something of a political football. One race for U.S. Congress in Iowa, for example, is becoming a microcosm of what’s happening all around the nation on a larger scale.

In the third congressional district in Iowa, the Republican candidate Brad Zaun is running ads suggesting that Principal Financial leaving the medical insurance field was because of changes in the healthcare bill that was passed this year. That bill was passed in part with the support of the current incumbent, Democrat congressman Leonard Boswell.

Zaun points out that Principal Financial, along with six other insurance companies in that state, have all removed themselves from the medical insurance industry.

A spokesperson from Principal Financial, however, claims that this isn’t the case. Susan Hauser, the spokesperson, claims that Zaun is politicizing the issue.

The issue isn’t completely cut and dried, however. Zaun claims that he’s spoken with other employees at Principal Financial, some of whom were actually involved in the decision to cut medical insurance from their portfolio of offerings, that claim the decision had much more to do with the legislation.

Further complicating the matter is the issue of political contributions. Principal Financial is currently one of the five biggest contributors to the re-election campaign of Congressman Boswell. Whether or not the company is possibly trying to put a positive spin on the situation for that reason isn’t clear.

Ultimately, this is just the first of what is likely to be a number of industry impacts that the new healthcare legislation has on the marketplace. Whether those changes turn out to be more positive or negative remains, of course, to be seen.