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Kil
Evil Skeptic
USA
13477 Posts |
 Posted - 12/02/2011 : 20:33:52
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This from Rick Ungar, a Forbes contributor:
The Bomb Buried In Obamacare Explodes Today-Hallelujah!
From the article:
...That would be the provision of the law, called the medical loss ratio, that 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.
This is the true ‘bomb’ contained in Obamacare and the one item that will have more impact on the future of how medical care is paid for in this country than anything we’ve seen in quite some time. Indeed, it is this aspect of the law that represents the true ‘death panel’ found in Obamacare—but not one that is going to lead to the death of American consumers. Rather, the medical loss ration will, ultimately, lead to the death of large parts of the private, for-profit health insurance industry.
Why? Because there is absolutely no way for-profit health insurers are going to be able to learn how to get by and still make a profit while being forced to spend at least 80 percent of their receipts providing their customers with the coverage for which they paid. If they could, we likely would never have seen the extraordinary efforts made by these companies to avoid paying benefits to their customers at the very moment they need it the most.
Today, that bomb goes off... |
Snip
...So, can private health insurance companies manage to make a profit when they actually have to spend premium receipts taking care of their customers’ health needs as promised?
Not a chance-and they know it. Indeed, we are already seeing the parent companies who own these insurance operations fleeing into other types of investments. They know what we should all know – we are now on an inescapable path to a single-payer system for most Americans and thank goodness for it.
Whether you are a believer in the benefits of single-payer health coverage or an opponent, mark this day down on your calendar because this is the day seismic shifts in our health care system finally get under way.
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... |
I sure hope he's right! Maybe this is why, even though there is a public mandate, which means more costumers, insurance companies are against the new health care law.
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Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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chefcrsh
Skeptic Friend
Hong Kong
380 Posts |
Posted - 12/03/2011 : 01:40:17 [Permalink]
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WARNING THIS MAY OR MAY NOT BE AN EXPERIMENT
I can't wait until my sister and all her health care professional colleagues are forced into subsistence wage in order to provide the "right" of health care to every one. Those greedy doctors and nurses how dare they profit from other peoples illnesses... |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 12/03/2011 : 02:23:33 [Permalink]
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Originally posted by chefcrsh
WARNING THIS MAY OR MAY NOT BE AN EXPERIMENT
I can't wait until my sister and all her health care professional colleagues are forced into subsistence wage in order to provide the "right" of health care to every one. Those greedy doctors and nurses how dare they profit from other peoples illnesses...
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If 80 to 85% of the premiums paid to heath insurance companies go to actual healthcare, how do you figure that your sister and her health care professional colleagues will be paid less? |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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chefcrsh
Skeptic Friend
Hong Kong
380 Posts |
Posted - 12/03/2011 : 04:25:35 [Permalink]
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Well my comment on my sisters situation is a flippant reponse to the tired rhetoric (including stated by her) that no one should profit from other peoples illness. To exclude only certain profit makers is arbitrary (and probably capricious) if we we start excluding all profit, either we will need to enslave most health care workers (including my sister who I assure you, while she is a wonderful and gving women is not gonna give up her lfe of luxury to care for sick kids), or do without their services
As to the 80 or 85% If it is true (I am led to believe maybe not so much) I would be willing to bet either premiums will raise to the point that the insurance companies can still make big profits from it, or else they will stop offering health insurance, at least the kinds that are dealt with in this policy. I think even through subversion one can not legisalte away the profit motive. |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 12/03/2011 : 10:40:37 [Permalink]
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Originally posted by chefcrsh
Well my comment on my sisters situation is a flippant reponse to the tired rhetoric (including stated by her) that no one should profit from other peoples illness. To exclude only certain profit makers is arbitrary (and probably capricious) if we we start excluding all profit, either we will need to enslave most health care workers (including my sister who I assure you, while she is a wonderful and gving women is not gonna give up her lfe of luxury to care for sick kids), or do without their services |
There are plenty of not for profit companies in this country that provide important services. My sister works for the DWP, a non-profit utility that has both lower rates than Edison does and is rated higher in reliability while at the same time taking in enough to subsidize low income households without running in the red. In fact, the city of Los Angeles often borrows money from them. Credit unions are also non profits, and lately people are moving their money over to them in droves because they get a better deal, with less fees and hassle. If a health insurance company can compete competitively with a non profit they will still exist. But this new rule will probably push some to either become non-profit or get out of the business. Non-profits will almost certainly fill the niche. And remember, people who work for non-profits get pay checks too.
Chef:
As to the 80 or 85% If it is true (I am led to believe maybe not so much) I would be willing to bet either premiums will raise to the point that the insurance companies can still make big profits from it, or else they will stop offering health insurance, at least the kinds that are dealt with in this policy. I think even through subversion one can not legisalte away the profit motive.
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I doubt that the premiums will be raised to compensate because they will lose customers. The rates are already very high. High to the point that many of us cannot afford to be insured. And remember, there will be a public mandate to help even out and even lower the costs. As for those who will stop offering health insurance, fine. Let them go. I think we have seen enough of their cherry picking and denying benefits to people who have paid regularly and to doctors and, well, wherever they can boost profits. I don't care if they go. They don't serve me. Telling me that I would have to pay 1200 a month just to get a policy with a 5000 dollar deductible that wont cover pre-existing conditions is so far out of my reach, what the hell do I need them for? They ARE the broken system. |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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bngbuck
SFN Addict
USA
2437 Posts |
Posted - 12/04/2011 : 01:42:33 [Permalink]
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Crsh
| I would be willing to bet either premiums will raise to the point that the insurance companies can still make big profits from it,....etc. |
Kil's response to this absurd half of an either/or statement:| I doubt that the premiums will be raised to compensate because they will lose customers. The rates are already very high. High to the point that many of us cannot afford to be insured. |
Absolutely spot-on! Apparently Chef has become so fat on his own cooking that he thinks that $1000 a month for health insurance is an insignificant expense. For-obscene-profit health insurance companies will indeed fold by the hundreds if they increase the exorbitant rates they currently charge to provide a decent degree of health coverage and the simple ability to survive to folks of average incomes. And the inevitable final result will be the emergence of single-payer government-provided health care for most of the 99%.
At the risk of causing Chf to suffer terminal nausea, I will state that I am extremely familiar with the cost of health insurance today. By most common standards (restaurant owners excepted), I enjoy a pretty attractive annual take-home income. - easily into six figures. But I am also paying, (as a dependent on my wife's good group policy) over $20000 a year pre-tax dollars in premiums for our coverage. Imagine what that would be if we didn't have a group policy!
This year, my 83rd (you may vomit here, Chuf) my medical expenses alone ran over $200,000. Blue Cross Regence lost at least $160,000 just on me - one single dependent on a high-end group policy. As the post-baby boomers age (emesis here, chef), damn few "private enterprise" health insurance companies will stay in the business of losing money!
None, actually! Maybe a few super-Cadillac high priced insurors for those that think nothing of paying five-figure and up annual premiums. And FEHBP for Congress, of course! Also paid by the taxpayers. But no private insurance, even group, will be able to pay the ever-rising costs of good medical care and make huge profits for executives and stockholders. The cost of the premiums will become prohibitive!
In 2011, Blue Cross Regence didn't get much from my $22600 premium to pay their fat-cat multimillionaire CEO's. And that's just fine with me!
Government funded single-payer is logically the only way that folks of low to medium income will be able to obtain health insurance in the near future. There is no way possible to allow fat profits to stockholders and obscene salaries to administrators and CEO's of for-profit health insurance companies.
So, as a process of natural selection, single-payer government insurance supported by good old taxpayer dollars, much of which will be coming from rich guys like Chef, and even well-off guys like me - paying 30%, and up, income tax rates. That awful Obamacare will be paying the survival bills for old (urp!)geezers like me. And that is only right and proper and the only way that health insurance can work in the long run. Either the government using taxpayer dollars has to pay for it, or it cannot exist except for the very wealthy!
As for me, I have a comfortable income, but I am far from being really wealthy. However, I am more than willing to pay higher than my current 30%+ income tax rate in order to contribute my fair share to Medicare, Medicaid, and especially "Obamacare" - in other words free public health care for all.I think even through subversion one can not legisalte(sic) away the profit motive.
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No need for subversion or legislation; the inexorable working of the marketplace sure as hell can and will reduce gross income to insurors causing premium prices to become ridiculous - and totally eliminate any chance for profit. And in this case where the product is healthcare, and ultimately life itself - profit shouldn't even be part of the equation!
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Valiant Dancer
Forum Goalie
USA
4826 Posts |
Posted - 12/04/2011 : 12:41:03 [Permalink]
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Originally posted by Kil
Originally posted by chefcrsh
Well my comment on my sisters situation is a flippant reponse to the tired rhetoric (including stated by her) that no one should profit from other peoples illness. To exclude only certain profit makers is arbitrary (and probably capricious) if we we start excluding all profit, either we will need to enslave most health care workers (including my sister who I assure you, while she is a wonderful and gving women is not gonna give up her lfe of luxury to care for sick kids), or do without their services |
There are plenty of not for profit companies in this country that provide important services. My sister works for the DWP, a non-profit utility that has both lower rates than Edison does and is rated higher in reliability while at the same time taking in enough to subsidize low income households without running in the red. In fact, the city of Los Angeles often borrows money from them. Credit unions are also non profits, and lately people are moving their money over to them in droves because they get a better deal, with less fees and hassle. If a health insurance company can compete competitively with a non profit they will still exist. But this new rule will probably push some to either become non-profit or get out of the business. Non-profits will almost certainly fill the niche. And remember, people who work for non-profits get pay checks too.
Chef:
As to the 80 or 85% If it is true (I am led to believe maybe not so much) I would be willing to bet either premiums will raise to the point that the insurance companies can still make big profits from it, or else they will stop offering health insurance, at least the kinds that are dealt with in this policy. I think even through subversion one can not legisalte away the profit motive.
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I doubt that the premiums will be raised to compensate because they will lose customers. The rates are already very high. High to the point that many of us cannot afford to be insured. And remember, there will be a public mandate to help even out and even lower the costs. As for those who will stop offering health insurance, fine. Let them go. I think we have seen enough of their cherry picking and denying benefits to people who have paid regularly and to doctors and, well, wherever they can boost profits. I don't care if they go. They don't serve me. Telling me that I would have to pay 1200 a month just to get a policy with a 5000 dollar deductible that wont cover pre-existing conditions is so far out of my reach, what the hell do I need them for? They ARE the broken system.
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Except that non profits don't pay taxes.
That is, however, until AHA came along. The non profit health insurers now have to pay taxes. They are in the same boat as for profit insurers.
The MLR was typically averaging 80% as it was before this legislation. The way it came out to that allowed groups whose members were not sick very much to pay just as those groups whose members were very sick. The savings from one was passed on to pay for the care of the other.
The legislation changes that by going down to the employer group level. If large group A has a MLR of 75% and large group B has a MLR of 95%, the insurance companies have to refund 10% of the premiums gathered from group A to the group. They take a loss on group B because their overhead (paying people to process the claims, get new business, change the system to comply with the whim of Medicare and Medicaid) is larger than what is not spent. The business takes a net loss.
Some FEHBP contracts are held by my company. (Mail handlers) They are not that profitable. The government mandates a pricer for services (increasing the system's complexity by adding an additional real-time interface) and has a MLR near 90%. |
Cthulhu/Asmodeus when you're tired of voting for the lesser of two evils
Brother Cutlass of Reasoned Discussion |
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chefcrsh
Skeptic Friend
Hong Kong
380 Posts |
Posted - 12/04/2011 : 22:10:48 [Permalink]
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Quite right, from what I have read, nearly all large scale and group healthcare insurers were already meeting the targets, the problem is with individual plans, for people like Kil, or my contractor brother. These people get policies through individual brokers (like my nephew) and both because they are small scale and pot luck, and in order to meet the network of fees for the POS chain of these individual policies, only about half of them currently can meet the target. What is likely to occur is less brokers and less options for individual insurance.
This shows the result for last year.
http://www.insurancejournal.com/news/national/2011/12/01/225685.htm
This is an interesting opinion piece that says that rates for individuals and small groups are likely to increase by 50%, but that it will force people to consider direct primary care systems, that may be true. But the HMO's of the eighties were a similar invention and they were largely disliked by the users, as well as the staff (though good costs saving alternative for employers for a time). We have similar outpatient networks here, and they share a lot of the negative aspects that I remember from HMO's.
http://www.kevinmd.com/blog/2011/04/direct-primary-care-medical-loss-ratio-impact-health-insurers.html
In any case what are people to do if they must now have insurance and the insurance companies must meet targets while remaining profitable? Rock and a hard place for sure. We shall of course see what fruit is born. I doubt single payer. |
| Edited by - chefcrsh on 12/04/2011 22:27:11 |
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Is the Affordable Care Act a sell out?
