Yesterday, a House committee found that the Pentagon has been effectively writing blank checks to insurance companies providing coverage for civilian employees in Iraq and Afghanistan. Apparently, the Pentagon allows its contractors to negotiate their own insurance contracts, unlike the State Department, the US Agency for International Development and the Army Corps of Engineers, who have all selected a single insurance carrier to provide the insurance at fixed rates. The Boston Globe reports that KBR Inc., one of the largest defense contractors in Iraq, paid the insurance giant AIG $284 million for medical and disability coverage under the Defense Base Act, a reference to the federal law mandating the insurance. Because of the way KBR’s contract is structured, this premium, along with an $8 million markup for KBR, gets billed to taxpayers. All told, the insurance companies have collected nearly $600 million in excessive profits over the past five years, according to the House Oversight and Government Reform Committee’s report. Full Article »