Did Obama really pull this off?
I patiently await the support of fake debt-worriers like the Republican Party and conservative Democrats.
They recognize how much money this will save the country right? Surely they wouldn't put lobbyists' causes (health care profits) above that most holy of political talking points, The Evil Debt.
December 04, 2011 09:00 AM
Health Insurers Now Have To Take Their Medicine
Aaaaand, the fuse has been lit. Insurers are not happy. Not even a little bit. What they feared most about the Affordable Care Act -- more than insuring people with pre-existing conditions, more than leaving children on their parents' policies until age 26, more than having to lift lifetime caps, more than any of those things -- was the limited Medical Loss Ratio (MLR).
The PPACA limits the "padding" between actual claims paid and premium collections to 15% for large groups and 20% for individuals and small groups. Any excess the insurer has must be refunded to insureds by the end of the year for which the MLR is determined. Everyone scoffed at the time over these limits, figuring the regulations would be broad and wide enough for insurers to run through the loopholes.
Ungar's logic at the end is a little bit wrong. The current MLR, just for perspective, is about 40-45%. That means for every dollar paid toward health coverage, only 60 cents or so goes to actual health costs. The rest is considered overhead -- agents' commissions, big CEO salaries, and of course, that shareholder profit that benefits those with the money to actually buy shares in these companies. Medicare, on the other hand, has a very low overhead attached to it -- about 7-8%, because it is in the business of providing medical benefits, and not making a profit or paying CEOs handsome salaries.
The only reason for insurers' efforts to deny benefits was simply to boost up the bottom line, and in many cases, the only reason for big premium hikes was also to boost that bottom line and the profits distributed to shareholders. Now insurers will find themselves in the business of actually paying for medical benefits. The regulations, by the way, do not allow them to include agents' commissions in their "medical expense" column.