Maureen Groppe, writing for the Indy Star, reports that Indiana is lobbying to waive new federal “medical loss” requirements. The law currently in place would require insurers to spend 80% of premium dollars on actually paying for health care instead of on other things like “profits, marketing, salaries and other administrative costs.” (The fact that the insurance industry denotes money used to pay for medical care as “medical loss” is telling.) From Maureen Groppe’s article:
If the federal government approves the state’s request to waive that new rule included in the 2010 health-care overhaul, some Hoosiers won’t get the refunds required from insurers who spend less than 80 cents of every $1 collected in premiums on medical care.
If the rule had been in place last year, Hoosiers who buy plans on their own would have received almost $24 million in rebates, according to estimates the state included in its waiver application.
Consumer Watchdog suggests that the application is based on Indiana politicians’ opposition to the healthcare reform law. The article does not really explain Indiana’s stated rationale for wanting the change. Anthem states that it will be in compliance with the law (it’s apparently at a 78% medical loss ratio, currently) but supports the state’s petition because it wants to preserve competition in the market.
Excuse me if I’m a bit skeptical about Anthem wanting a marketplace teeming with viable competitors. Certainly competition is anemic at best, currently. And, if Indiana political types want to take a stand against healthcare reform, this strikes me as a tin-eared place to do it. It’s hard to stand against the notion that most premium dollars should be spent on actual medical care instead of, say, executive compensation. Certainly, that’s not likely to be a position that resonates with the masses.
Apparently, enough Indiana legislators have voted themselves enough healthcare benefits to be able to take a philosophical stand not afforded to most of the rest of us.
After Anthem raised our premiums 26% two years ago, and another 26% last year, they raised them another $900 this year. The letter enclosed with the bill explained that they have to charge more now because they are required to provide free birth control. The new “free birth control” will save us $15/month. Also, the “free” birth control isn’t available until January. So we’re pre-paying $900 for a $180 benefit. Anthem makes excuses, but it’s all to enrich shareholders.
“Dear valued customer: Because of the cost of complying with President Obama’s communist health care law, we are required to raise your premiums 20%. Please ignore the fact that we’ve been raising your premiums by similar amounts for the last twenty years. Sincerely, Your Health Insurance Company.”
What is so special about 80%? The regulation makes absolutely no sense. Why isn’t it 81%? Or 81.5%? Or 81.56254321%
It’s a bullshit regulation, and on that basis alone should be resisted.
Health care premium increased over the last decade have been some of the lowest on record, so you’re just wrong on the face of it, Doug.
They’re still twice the rate of inflation, and I’m not saying that they’re not excessive, but, again, point of fact, they have not been 20% per year.
Looks like 8 – 14% per year between 2000 – 2007. Meanwhile, inflation and worker compensation has been somewhere between flat and 4%.
Why 80%? You have to pick a number so that 78% doesn’t become 73% doesn’t become 65%.
Or, even better, you should have an open enrollment Medicare option and then let private insurers do whatever they want, so long as they’re precluded from cherry-picking the young, healthy population then dumping them when they get expensive.
Maybe we’re comparing apples and oranges. I took the data here and graphed it (I could google docs it if foks are really interested.)
So this is private sector health insurance premiums. There was a large increase in ’01-02 of 14%, and then declining increases every year since then. In ’09 the increase was just 3% for individuals.
Then you get to this year and BAM! 8% increase in premiums in anticipation of Obamacare.
It wasn’t real clear to me exactly what you were referring to in the document you linked to. What graph, and does it only refer to private health insurance, or does it comingle Medicare and Medicaid?
Figure 8 on the linked Kaiser Foundation document. Looks like it’s taking premiums for a family of four to purchase employer-sponsored private health insurance.
It’s the exact same data I linked to, except that your graph only goes to 2006, mine goes to 2009 (and 2010 was under 3% as well).
So you’re arguing old data, my friend.
I would love to know where to get those 8% increases that are being quoted. When mine went up 26% the second time, I complained. The customer service guy said the increase was because they’re paying doctors more now. Which was a lie.
I think the medical loss ratio should be 92%. It’s often said that business can do things more efficiently than government. So at the least, hold them to the same medical loss ratio as medicare so they can prove it.
T, aren’t you a doctor? You know damn well that Medicare pays any old thing that you doctors put through. The level of fraud is outrageous, it can’t even be measured.
That “medical loss” (boy, that’s a neutral term, isn’t it?) is for managing care. Making sure that claims aren’t fraudulent is a big part of that.
My understanding is that “medical loss” is an industry term, for what it’s worth.