OK, I missed this in the health care debate.

[ObamaCare] requires health insurance companies to spend 80% of the consumers’ premium dollars they collect—85% for large group insurers—on actual medical care rather than overhead, marketing expenses and profit. Failure on the part of insurers to meet this requirement will result in the insurers having to send their customers a rebate check representing the amount in which they underspend on actual medical care.

That's a huge game changer. I retract my previous dissing of Obama, saying he caved to the insurance companies. The Forbes article says that this will likely lead to private insurers getting out of the business. More here:

http://www.forbes.com/sites/rickungar/2011/12/02/the-bomb-buried-in-obamacare-explodes-today-halleluja/

Why do you want private insurers to get out of the business?

From the article:

If you thought that the Obama Administration chickened out on pushing the nation in the direction of universal health care for everyone, today is the day you begin to understand that the reality is quite the contrary.

That was me, but I'm learning.

If you believe that the end of private, for-profit health insurance is some type of nefarious step towards a socialist society, then you might want to attend church this Sunday to mourn the loss of health insurers being able to worm out of covering the bills of a cancer patient because she forgot to write down on her application that she had skin acne for three months when she was a teenager.

Steve?

Of course, those of you who fear the inevitable arrival of universal health care really shouldn't be too fretful. There will always be a for-profit health insurance industry for those who want to pay for it. The only difference will be that those who cannot afford private coverage will also have an opportunity to get their families the medical care that they need

Everyone wins-except the for-profit health insurers.

I can live with that.

Me too.

geojanes wrote:That's a huge game changer. I retract my previous dissing of Obama, saying he caved to the insurance companies. The Forbes article says that this will likely lead to private insurers getting out of the business.

I am not sure this is all that accurate. I vaguely remember discussing this on the old boards when the bill was originally passed. If I am remembering correctly, insurance companies already spend about 80% of premium dollar on medical costs.

I will see if I can find the articles again. Unfortunately, I don't think it will be tonight. My laptop is running like molasses uphill in February.

edit--
I found this article from Dec, 2009 that shows medical loss ratio in PA. From the article

At the largest for-profit insurance companies nationwide, an average of only 81 percent of our premiums go to health care. The percentages for the largest Pennsylvania for-profit insurers, Cigna and Aetna, are 81.5 percent and 81.9 percent. For the two largest nonprofit insurance companies in Pennsylvania, Highmark Blue Cross Blue Shield and Independence Blue Cross, they are 87.9 percent and 88.3 percent.

I will look for more tomorrow when my laptop isn't actiong up as much.

Yeah, not mine.

Last year Aetna had 35B in revenues 25B in cost of revenues, and 2.6B net. This gives us a gross of about 28% and a net of about 5.3%. Not Microsoft or Harvard College kind of profit numbers but a lot higher than the 15% gross they will be limited to. (That is if I'm translating this "cost of care" definition correctly into a company's financial statement. I'm not sure exactly what it means, but I assume it translates into cost of revenue for health insurance companies, but I could be wrong.)

Well, according to this site, Aetna's medical loss ratio in 2008 was 81.5%

This article from Dec 1, 2011 says most major insurance companies already meet the new medical loss ratio.

This article from July, 2010 says Aetna's medical loss ratio was approx. 81%

This article has a chart that compares the quarterly Medical loss ratio of United Health, Aetna, Wellpoint, Humana, and Coventry between March, 2007 and Sept, 2009. Most of them exceed the 80% threshold.

I think this is enough to show that the author of the Forbes article was wrong that the new MLR requirement will be the end of private insurance companies and that the percentage picked is one insurance companies regularly meet on their own.

archduke there will be some impact from this law. From your own source:

At the largest for-profit insurance companies nationwide, an average of only 81 percent of our premiums go to health care.

You don't get to an average of 81% without a range that would infer some are below 80% and some above the average...
It seems to me that health insurance is a fairly low risk business that as a consequence of its low risk can be assocated with low returns and still be attractive to investors seeking that profile.. Which would mean that the law would ratchet a little more efficiency out of the private insurance industry.That is if you see beareaucratic overhead and profit as inefficiency when defining a return on the health dollar invested..
Perhaps only an incremental improvement will occur, but an imporovement nonetheless. Certainly not the game changer that the origianl author suggests..
What it may set the table for is continual tightening of those restictions to ever smaller margins in order to continue to force the industry towards greater efficiencies, but that would be quite a battle.

Did you look at the chart in the article on the 4th link. It covered 9 quarters of the 5 largest for-profit insurance companies in the countery. Within those 45 quarters, only 4 times was the MLR less then 80%. Of those four quarters, only one of them was under by more then 1% (Coventry by 1.1% in 09/2007). The other three were under by less then 1%.

It would seem to me that smaller health insurance comanies will be the most challenged by this law. If you have a smaller revenue base, it is is harder to reduce your administrative costs as a % of revenue. You still need accountants and lawyers and HR execs. You still need policies and procedure and you have to comply with the tremendous amount of national and state regulation in this area. To what extent is this rule a mechanism to protect large insurance companies at the expense of smaller insurance companies?

Archduke, I did. And I suppose the industry average is arrived at by including smaller operators who don't have the same performance?
Plus, I note now that rockefeller has introduced an amendment to get the level to 90? So perhaps the intent is to get the regulation in place at a level that will not effect many players, but then to ratchett up the levels to squeeze efficiency?

What all the analysis linked by both of does is paint a pretty good picture of the efficiencies of the American socialized medical programs.. That is if you see efficiency as actually paying for medical care versus paying for beauracracy with medical premiums or taxes.

geojanes wrote:OK, I missed this in the health care debate.

[ObamaCare] requires health insurance companies to spend 80% of the consumers’ premium dollars they collect—85% for large group insurers—on actual medical care rather than overhead, marketing expenses and profit. Failure on the part of insurers to meet this requirement will result in the insurers having to send their customers a rebate check representing the amount in which they underspend on actual medical care.

That's a huge game changer. I retract my previous dissing of Obama, saying he caved to the insurance companies. The Forbes article says that this will likely lead to private insurers getting out of the business. More here:

http://www.forbes.com/sites/rickungar/2011/12/02/the-bomb-buried-in-obamacare-explodes-today-halleluja/

Hmm, so . . . Obama promoted a socialist medical program? What a shock!

The man . . . Ungar (author of the Forbes piece and resident of the People's Enclave of Santa Monica) may also be found at . . . Mother Jones

So, a socialist approves of a socialist and geojanes, that "independent" voice, approves of both. I am very surprised.

rickyp wrote:You don't get to an average of 81% without a range that would infer some are below 80% and some above the average...
It seems to me that health insurance is a fairly low risk business that as a consequence of its low risk can be assocated with low returns and still be attractive to investors seeking that profile.. Which would mean that the law would ratchet a little more efficiency out of the private insurance industry.That is if you see beareaucratic overhead and profit as inefficiency when defining a return on the health dollar invested..
Perhaps only an incremental improvement will occur, but an imporovement nonetheless. Certainly not the game changer that the origianl author suggests.

I think you are possibly correct. I think the bill included a number that the majority of companies already reach so there would be no opposition from the companies but with the intentions of raising the level at another time. Probably as an amendment to an totally unrelated bill to try and hide it. The problem is I don't think it will suceed. Believe me, these companies review every single piece of legislation to make sure something like that doesn't happen. If the number is something the Insurance companies oppose they will kill the bill.

Why shouldn't we have more government involvement? After all, look at a country like Sweden. They have it together!

A man from Nyköping in eastern Sweden has been denied a power wheelchair despite having had both of his legs amputated as the local health authority remained "uncertain if the impairment was permanent".

The headline is somewhat inaccurate. Reading the article they did offer an electric wheelchair, just not one that was self-operated.

The system clearly is imperfect, but do Americans with missing legs get electric wheelchairs as a matter of course?

Doctor Fate wrote:Why shouldn't we have more government involvement? After all, look at a country like Sweden. They have it together!

A man from Nyköping in eastern Sweden has been denied a power wheelchair despite having had both of his legs amputated as the local health authority remained "uncertain if the impairment was permanent".

Sounds exactly like something my insurance company would say. They always deny the first claim as a matter of course, hoping you won't call them up to complain. When you call and complain they normally fix it, but how many people don't call, and who can spend the hour it takes sorting it out. No need to look to Sweden for completely messed up health care. We do well enough on our own.