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How strong will this 85% medical loss ratio cap on insurance companies be? [View All]

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andym Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-01-09 07:57 PM
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How strong will this 85% medical loss ratio cap on insurance companies be?
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Edited on Sun Nov-01-09 07:59 PM by andym
This looked interesting to me:
--based on the definition it seems that 85% will not be a welcome number for the insurers.


Sec. 102. Ensuring value and lower premiums. Amends the Public Health Service Act to require health
insurance issuers in the small and large group market to meet a medical loss ratio of not less than 85%, effective
for plan years beginning January 1, 2010. Directs the Secretary to require that plans in the individual market
also meet a medical loss ratio of not less than 85% so long as it does not destabilize the existing individual
market. If plans exceed that limit, rebates to enrollees are required . In determining the methodology for the
medical loss ratio, the Secretary is to design it to ensure adequate participation by issuers, competition in the
market, and value for consumers.

What are the loopholes? ("destabiilize the existing market?") How can it be made stronger?

Here is a definition of medical loss ratio from

"In health insurance, the fraction of revenue from a plan's premiums that goes to pay for medical services.

The portion of health plan revenue that does not cover administrative or marketing expenses, taxes and profits.

Viewed from different angles, a measure of the profitability of a health insurer, the quality of health care enjoyed by its customers, the competitiveness of pricing in the marketplace or the efficiency of its non-medical activities.

A number that traditionally ranges from 75 percent for the most profitable and efficient plans to more than 100 percent for money-losing plans.

For Aetna, a figure that increased last quarter from 74.6 to 79.4, causing a 20 percent plunge in its share price when it was announced.

According to analysts, the best indicator of a future turn in the health-insurance industry's profit cycle. "
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  -How strong will this 85% medical loss ratio cap on insurance companies be? andym  Nov-01-09 07:57 PM   #0 
  - The fact that they're allowed to use "medical loss"  Doctor_J   Nov-01-09 08:00 PM   #1 
  - Isn't that just standard terminology in health care? nt.  andym   Nov-01-09 08:02 PM   #2 
  - As matter of fact no. Not in CIVILIZED countries, anyway n/t  eridani   Nov-02-09 01:29 AM   #12 
  - Another bad omen is people who know nothing about insurance...  TreasonousBastard   Nov-01-09 09:25 PM   #8 
     - Fuck insurance. I want to pay for healt care, and that only  eridani   Nov-02-09 01:30 AM   #13 
     - I want to win the lottery and take off with Sandra Bullock, but it...  TreasonousBastard   Nov-02-09 01:53 AM   #15 
        - Then letting more people in would be a major impetus to needed changes  eridani   Nov-02-09 01:55 AM   #16 
        - Think this through for a minute...  TreasonousBastard   Nov-02-09 02:15 AM   #17 
           - Yes, but we don't have to pay useless shitstain interrmediaries to withhold care  eridani   Nov-02-09 04:00 AM   #18 
           - Beware that 3% number...  TreasonousBastard   Nov-02-09 05:02 AM   #19 
              - There are 19,000+ different private insurance plans in Chicago alone  eridani   Nov-02-09 05:33 AM   #20 
                 - And you're never getting single payer here...  TreasonousBastard   Nov-02-09 06:39 AM   #21 
                    - A single payer system was implemented in Taiwan within a few years in the 90s  eridani   Nov-02-09 08:14 PM   #25 
                       - Are you just randomly throwing things out there and seeing what sticks?  vaberella   Nov-03-09 09:02 PM   #30 
                          - Throwing more people into Medicare would be a big motivation to solve Medicare problems  eridani   Nov-04-09 01:19 AM   #31 
           - Okay, I'm thinking this through.  DLnyc   Nov-02-09 11:03 AM   #24 
        - You are aware that Medicare's beneficiary satisfaction rate is  Bluenorthwest   Nov-02-09 07:41 AM   #22 
     - Medical loss = any money the insurance company must pay for medical care  Doctor_J   Nov-02-09 07:59 AM   #23 
  - That's cool. I hadn't seen that provision. K&R  lumberjack_jeff   Nov-01-09 08:02 PM   #3 
  - That'll depend on the HHS Secretary  SpartanDem   Nov-01-09 08:06 PM   #4 
  - Is there any money appropriated for inspectors to audit the millions and millions of  John Q. Citizen   Nov-01-09 08:11 PM   #5 
  - I don't think so-- although it's unclear  andym   Nov-01-09 08:56 PM   #6 
  - No, only the regulator is established  SpartanDem   Nov-01-09 09:07 PM   #7 
  - Nothing in there about how the companies would deal with reserves, or...  TreasonousBastard   Nov-01-09 09:34 PM   #9 
  - unclear, hhs has to review along with ins compaines  ind_thinker2   Nov-01-09 09:42 PM   #10 
  - They can't even monitor and control Wall Street! Not that they are trying very hard.  Better Believe It   Nov-01-09 09:45 PM   #11 
  - Irrelevant if they retain the power to turn down claims n/t  eridani   Nov-02-09 01:31 AM   #14 
  - Health Care Reform Bills - Does Actuarial Value Trump Medical Loss Ratio?  slipslidingaway   Nov-03-09 02:27 PM   #26 
  - Sounds like an obvious idea for an amendment to the bill  andym   Nov-03-09 05:15 PM   #27 
  - Many people have seen more costs shifted to them, especially over the last...  slipslidingaway   Nov-03-09 08:29 PM   #28 
  - I don't think that helps.  bornskeptic   Nov-04-09 12:19 PM   #32 
     - Or we could dump the for profit insurance companies for a basic standard...  slipslidingaway   Nov-04-09 01:04 PM   #33 
  - This thread may be the single best thread to explain why we need single payer  grantcart   Nov-03-09 08:44 PM   #29 
  - Agreed! n/t  slipslidingaway   Nov-04-09 02:19 PM   #35 
  - It will be almost as strong as the public option. Oh boy!  Better Believe It   Nov-04-09 01:23 PM   #34 
  - Wendell Potter said the average medical loss ratio was 95% in the early 90's....  slipslidingaway   Nov-04-09 02:29 PM   #36 

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