|
|
"A comprehensive, collaborative elections resource."
|
Forcing Insurers to Spend Enough on Health Care
|
|---|
| Parent(s) |
Issue
|
| Contributor | ArmyDem |
| Last Edited | ArmyDem Dec 22, 2009 07:45pm |
| Logged |
0
|
| Category | News |
| Media | Weekly News Magazine - TIME Magazine |
| News Date | Wednesday, December 23, 2009 01:00:00 AM UTC0:0 |
| Description | By Kate Pickert Tuesday, Dec. 22, 2009
Until Senate Majority Harry Reid decided to scrap a government-run insurance plan in order to get the 60 votes needed to pass health care reform legislation, Sen. Jay Rockefeller was one of the chamber's most ardent public option supporters. Without a public option, the West Virginia Democrat feared, insurers — fattened by billions of dollars in new government subsidies and a new requirement that most Americans purchase insurance — would run rampant, jacking up prices and padding profits and executive salaries. But Rockefeller and several other Democratic senators also had their eye on a different way to keep insurer profit margins within reason: setting strict minimums on what proportion of premiums must be spent on health care.
Insurance companies have a very technical term for this proportion — "medical loss ratio" (MLR) — and critics say the terminology itself illustrates the callousness of the health insurance business. Companies that sell coverage consider revenues that go to pay for medical costs "losses,"; minimizing these losses by dropping sick customers and cherry-picking healthy ones is one way insurers currently stay profitable. But thanks to a provision inserted into the Senate health care bill at the last minute, the federal government may soon require insurers to "lose" 80% of premiums collected in the large group market and 85% in the individual and small group market. Insurers who don't operate at or above these thresholds would have to send rebates to customers. (MLRs are generally higher in the large group market because selling and administering one policy for many people at once requires much less overhead than designing, marketing and carrying out policies on an individual basis.) |
| Share |
|
|
2¢
|
|
| Article | Read Full Article |
|
| Date |
Category |
Headline |
Article |
Contributor |
|
|
