by MaxHerr » Wed Dec 19, 2012 02:57 pm
[Dec 5, 2012]
Those of us who understand the insurance industry (and the rules of the game they have created, and by which all of us must play) knew that there was NO WAY Obamacare would lower the cost of health insurance and/or health care in America.
The only immediate effect of the imposition of the "MLR" requirement was the drastic reduction in commissions paid to agents, reductions which averaged about 45%-55% in the rates paid compared to previous years (from 20% or 25% down to about 12% with most of the carriers I represent). Those losses have been replaced by bonuses to agents who sell 10 or 20 or 50 new policies. They don't show up as "administrative costs" but do find their way into the "overhead" figures.
Obamacare will ultimately eliminate personal health insurance as we know it. We will eventually end up with a "Medicare-style" single-payer plan that the US has no ability to fund -- Medicare itself already has a $106 TRILLION unfunded shortfall. But what the heck, it's only money.
SACRAMENTO - Commissioner Dave Jones pointed to a new study released by the Commonwealth Fund to demonstrate the benefits and shortcomings of the Medical Loss Ratio (MLR) law in states without the authority to prevent excessive health insurance premium increases.
The Commonwealth Fund study shows that in California's individual market, health insurers lowered their administrative costs by an average of $14 per member in 2011, but increased their profits by $88 per member during the same time. This resulted in an average increase in overhead costs per insured (in the individual market) of $74.
Those of us who understand the insurance industry (and the rules of the game they have created, and by which all of us must play) knew that there was NO WAY Obamacare would lower the cost of health insurance and/or health care in America.
The only immediate effect of the imposition of the "MLR" requirement was the drastic reduction in commissions paid to agents, reductions which averaged about 45%-55% in the rates paid compared to previous years (from 20% or 25% down to about 12% with most of the carriers I represent). Those losses have been replaced by bonuses to agents who sell 10 or 20 or 50 new policies. They don't show up as "administrative costs" but do find their way into the "overhead" figures.
Obamacare will ultimately eliminate personal health insurance as we know it. We will eventually end up with a "Medicare-style" single-payer plan that the US has no ability to fund -- Medicare itself already has a $106 TRILLION unfunded shortfall. But what the heck, it's only money.
Posted: Thu Dec 20, 2012 02:03 pm Post Subject:
From the same article:
"At the direction of Insurance Commissioner Jones, the Department of Insurance is in the process of auditing the major health insurers in California to verify compliance with the state and federal Medical Loss Ratio laws"
""In California, my department will continue oversight of the MLR rebates by health insurers to make sure policyholders are receiving the appropriate health insurance premium rebate," Commissioner Jones added. "However, policyholders still lack adequate consumer protection from steep rate hikes, because I do not have the authority to reject excessive rate increases.""
So under the current system health carriers have increased their premiums and the DOI states that they have no power to control these rate increases. I'm not sure why you are saying that these rate increases are somehow related to Obamacare. Actually, that are in _not way_ related and are in fact part of the _current_ system.
Per Obamacare:
"Obamacare establishes a federal premium rate review process. Under the current proposed regulation any health insurance rate increase of 10% or more for individual or small group plans is subject to review. If the federal government deems a state’s insurance rate review program to be adequate, the state will perform a review to determine if the increase is “unreasonable.” If a state has no rate review program or its program is deemed to be “inadequate,” the Department of Health and Human Services (HHS) will conduct the review instead. While some states have the power to reject insurance rate hikes, the federal government does not have this power even if it deems a rate to be “unreasonable."
Insurance companies with plans with rates deemed to be "unreasonable" will be required to post a justification for the unreasonable rate increase on their website.
Obamacare also authorizes up to $250 million dollars in grants for states. Cycle I of this program gives grants to states that improve their rate review process. Cycle II of this grant will be made available to states that cooperate in the federal “unreasonable” rate increase review process. It, however, has not been released.
HHS has indicated that it will review premium increases even in states where no process exists and even if no federal grant money has been accepted. This is contrary to the text of Obamacare which says that the Secretary shall act “in conjunction with the states.”"
Posted: Thu Dec 20, 2012 06:04 pm Post Subject:
Actually, that are in _not way_ related and are in fact part of the _current_ system.
That's only patially correct. Come 1-1-2014, when the full force of Obamacare will be felt, that will set the benchmark for rate increases. California has already adopted unisex rates for health insurance (effective in 2012, and causing everyone to pay more, on average), and by 1-1-2014, insurers will no longer be able to charge substandard rates for folks who should pay more due to their health status.
So what is happening today is that insurance companies are preparing for the axe to fall in 2014 and raising rates today to be in position for that eventuality. We can expect to see another round of double-digit rate increases before the end of 2013.
It may not be a direct effect of Obamacare today, but Obamacare is entirely to blame. And when Obama himself stands in front of the TV cameras and radio mics and says, "It will be free . . . your health insurance company will pay for it" he demonstrates his complete ignorance of the economics of insurance. Whatever someone thinks is free is paid for by insurance premiums. If there were no copays or coinsurance connected to our health insurance, the cost would be astronomically higher than what it already is for many.
On health care, as he is on capitalism, Obama is a fool, and millions of others who believe what he has to say have succumbed to the same delusions of grandeur that imperil our nation. He has four years remaining to completely wreck our economy, and he's going to work overtime to do so.
I have never desired to be a ward of the federal government. But when, in several years, our only access to health care will be through a single-payer system because insurance companies cannot make a profit, we might as well just stop working, kind of like the people in Greece. Just hold out your hand for whatever the government is willing to toss in your general direction.
In the former Soviet Union, those "tossings" ended up being toiler paper and brassieres for some folks. Can't eat either one. Could trade the brassieres for bread, if the baker had a wife or girlfriend the right size. At least toilet paper became too valuable to trade -- it was worth more than the ruble, which became useful for personal hygiene.
Posted: Sun Jan 13, 2013 02:14 am Post Subject:
Right on Max! Someone says the truth!
Posted: Sun Jan 13, 2013 03:22 am Post Subject:
I try to do my best. Thanks!
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