The Bomb Buried In Obamacare Explodes Today-Hallelujah!

[CatWoman]

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 ratio 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.

Today, the Department of Health & Human Services issues the rules of what insurer expenditures will—and will not—qualify as a medical expense for purposes of meeting the requirement.

As it turns out, HHS isn’t screwing around. They actually mean to see to it that the insurance companies spend what they should taking care of their customers.

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

[CaliforniaPeggy]

1. That is GREAT news.

Thank you, my dear CatWoman, for bringing this news to us.

[CatWoman]

3. Hi Peggy

I'm anxiously awaiting my check!

[CaliforniaPeggy]

5. Ha! I wouldn't hold my breath if I were you, lol!

[Bill USA]

114. HHS director announced that 12 million consumers will receive $1.2 Billion in rebates due to ACA's

80:20 rule.

(emphasis my own)
http://www.democraticunderground.com/101634030

[font size="3"]Today, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that 12.8 million Americans will benefit from $1.1 billion in rebates from insurance companies this summer, because of the Affordable Care Act’s 80/20 rule. These rebates will be an average of $151 for each family covered by a policy.[/font]

The health care law generally requires insurance companies to spend at least 80 percent of consumers’ premium dollars on medical care and quality improvement. Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales, and advertising. Beginning this year, insurers must notify customers how much of their premiums have been actually spent on medical care and quality improvement.

(more for your enjoyment at link)

Aren't facts more fun than fantasy?

IT's a well known concept in investment world that where there is less risk the rewards (profits) don't need to be as high to attract investors. With the ACA guaranteeing a more reliable and larger supply of customers for health insurance companies they don't need to offer as high a ROR (Rate of Return) since the costs will be more predictable and a larger supply of customers is assured.

Since health insurance companies will be competing more on quality of their product (rather than trying to fatten profits by committing fraud by deceit - in fooling customers into thinking they are getting coverage they are not - removing the denial of coverage due to a pre-existing condition will remove a lot of the opportunities to fatten profits by defrauding policy holders) there will be an improvement in the coverage provided by the insurance companies. Standardization of coverage supplied in 'basic' plans will also remove the opportunity to profit by deceit and improve quality by forcing insurers to compete based on the quality of their product.

So we get lower prices for comparable coverage and higher quality of product (medical coverage).

[elleng]

2. GREAT!

Bookmarked!

[malaise]

4. That's a serious problem

There's no money left for lobbyists or corrupt politicians - repeal! repeal! repeal!!

[emulatorloo]

6. I am so happy this day has come

[Whisp]

7. Hallelujah

[vankuria]

26. Exactly how feel

about ACA being upheld. Got chills listening to this beautiful song, being sung by one of the best singers of our time. Thank-you Whisp for posting this!

[panader0]

8. k and r

[zipplewrath]

9. You're very optimistic

I do believe this law will cause changes in the health insurance industry, but not as you outline. The more likely effect is for health care providers to acquire health insurance companies. They'll be glad to be limited to 15% profits, because they can still make profits on the health CARE side since those costs are not controlled.

[Hoyt]

32. Actually their profits won't be 15% -- marketing, exec salaries, administration, etc., will eat up a

chunk of that. Even better, when the Exchanges are up, they'll have to compete with other insurers, some of whom will actually try to attract subscribers by offering lower premiums.

Then, we'll see more not-for-profit health plans entering in the mix.

[AllyCat]

121. Unfortunately, i feel you are correct.

Hospital x in my area bought up a regional health insurance company and is now in the process of limiting who the insured can see. New clinics all over the place but the "non-profit" system has no money for staff / pay.

[grantcart]

10. I spoke to a relative today who told me that the large insurance company he works for has left the

health care field (it was not a serious player in this area although it is a big company that most of you would recognize) because they knew that they could not get under these MLR ceilings.

This is a very very big deal.

[CatWoman]

11. thanks for that, G

brought a HUGE smile to my lips

[bornskeptic]

119. Most group insurance plans won't have much problem with this,

as they tend to be near satisfying the MLR limits anyway. It's really going to make it tough for insurers offering individual plans. Those plans have much more overhead, owing to marketing and medical underwriting costs. The prohibition against discrimination based on re-existing conditions in 2014 will actually be helpful to the insurers in this respect. Their medical expenses will go up, while medical underwriting costs will go down.

[grantcart]

124. It depends on the state.

Hawaii will get no returns

Texas on the other hand will have refunds equal to 92% of those insured.

[ErikJ]

12. Medicare does it for 3% overhead. Pigs.

[kwolf68]

14. I've seen this, but any graphics

If medicare is that damn efficient as compared to these insurance providers, seems to me such a comparison juxtaposing the two would be readily available.

[PoliticAverse]

16. The 3% Medicare figure is very misleading. n/t

[shaayecanaan]

28. No, its not...

if you take out Medicare Part D (which is a semi-privatised arrangement allowing insurers to gouge fees) then you have total administrative overheads for Medicare of about 2%.

Now, Medicare patients tend to be elderly, and in more need of care. By contrast, the health insurers tend to chase young customers, as they are healthier and less likely to be sick. So on a per patient basis, Medicare spends 24.8% more on administration per patient, because a typical Medicare patient makes far more visits than a private health insurance patient.

The health insurers say that this is an "apples for apples" comparison.

Bullshit.

Absolute bullshit.

If a young person signs onto a health plan and never makes a claim, the admin overhead is minuscule. You basically only need to send them an invoice - the only overheads are billing and accounts receivable. It makes far more sense to calculate overheads based on a per-treatment rather than a per-patient basis, because thats where the real admin costs are - approving referrals and treatment.

Don't believe me? The US spends 16% of its GDP on health. The UK spends 9%. Japan 8%. Australia 9%. Et cetera, et cetera.

[progress2k12nbynd]

42. Medicare has a low overhead because it pushes its overhead onto the providers...

I know, I do the paperwork. Medicare on a per patient basis is a much bigger paperwork burden on the average provider than a commercial payer patient.

Edited to add: Many DUers who have never worked in healthcare think Medicare is the end-all-be-all thus the cries for "Medicare for All." What they fail to realize (and what a simple google search would reveal) is that Medicare thrives because it bankrupts the providers accepting it. My hospital gets over $0.90 on the dollar for care costs on commercial patients but $0.42 on the dollar for Medicare patients. Your "Medicare for All" slogan would shut our doors.

If u don't believe me, look up "disproportionate share." If Medicare is such a good deal why does the government have to give extra payments to hospitals that have a higher Medicare population?

"Medicare for All" is an uneducated bumper sticker slogan.

[shaayecanaan]

59. I'd be interested in hearing more about this...

I can understand the returns being less than for private patients, but I would like to hear more from you on the paperwork burden.

[progress2k12nbynd]

84. There's a lot to it but the long and short of it is covered in this article...

http://www.acponline.org/pressroom/merfa.htm

"Under Medicare regulations, physicians must comply with numerous federal rules and local contractor policies to complete claim forms, provide advance beneficiary notices, certify medical necessity, file enrollment forms and comply with code documentation guidelines. Yet, there is no single source that physicians can access to learn Medicare's rules and policies.

A preliminary finding that a physician did not follow Medicare's complex rules can result in an extraordinarily time-consuming series of subsequent events. Medicare may deny the claim and/or demand more paperwork documentation. It may institute an audit of the physician's Medicare claims, causing a virtual shutdown of a physician's practice. It may deny payments for similar claims based on a statistical sampling of claims submitted, without even looking at the actual records for those other claims. If the physician appeals a denial, this launches yet another complex process with its own set of time-consuming rules and paperwork requirements."

You've got local coverage determinations, national coverage determinations, constantly shifting codes, changing guidelines, etc. On top of this, 90% of the time when CMS asks us providers to implement a change, we go gungho spending big bucks to get ready by their deadline, and they're never ready. ICD-10 and 5010 are perfect examples; we were all told we had to transition to the 5010 electronic transaction format by Jan 1, 2012, but then the government wasn't ready, so we ended up with FOUR MONTHS of claims being backed up because the government couldn't process them. We were literally within a month of shutting our doors back in April!

Again, I'm not saying single payer isn't the way, because it is. I'm just saying that "Medicare for All" makes no sense if by Medicare you mean the current system.

[Bill USA]

120. what a load of bull. Every Medicare form has a phone number on it to call if you have questions.

Medicare Forms page: http://www.medicare.gov/medicareonlineforms/

The page for the Patient's Request for Medical Payment form: http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-Items/CMS012949.html


Here's the page for printing the PATIENT’S REQUEST FOR MEDICAL PAYMENT - FORM OMB NO 0938-0008 - in English.....

http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS1490S-ENGLISH.pdf

This is the form the provider fills out for payment of services rendered to the patient:

It shows the following at the top of the form:

SEND COMPLETED FORM TO:
Your Medicare Carrier
If you need help, call 1-800-MEDICARE
(1-800-633-4227)

THe Medicare Appeals, Appointment of Representative form -- http://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms1696.pdf

indicates: "if additional help is needed, contact your Medicare plan or 1-800-MediCare (1-800-633-4227)." ... the SAME number that appears on the PATIENT’S REQUEST FOR MEDICAL PAYMENT form.


[font size="3"]... Now, the REAL administrative problem for doctors offices and hospitals is dealing with PRIVATE INSURANCE COMPANIES. [/font]

1) THEY ALL HAVE THEIR OWN CODES FOR DIAGNOSES AND FOR TREATMENTS.
2) THEY ARE CONSTANTLY CHANGING THESE CODES
3) THEY NEVER INFORM ANYBODY OF THESE CHANGES - YOU ONLY FIND OUT WHEN YOUR CLAIM IS SENT BACK UNPAID.
4) IT IS RARE FOR A DISPUTED CLAIM TO BE RESOLVED IN ONE GO-AROUND WITH THE INSURANCE COMPANY.
5) DEALING WITH MULTIPLE INSURANCE COMPANIES ONLY MULTIPLIES THE PROBLEMS LISTED ABOVE.
6) TIME SPENT HAGGLING WITH INSURANCE COMPANIES AND DELAYS IN PAYMENT ARE ADDITIONAL COST BURDENS TO THE PROVIDER WHICH ARE PASSED ON TO THE PATIENT IN HIGHER DOCTOR'S FEES.

[font size="3"]
Nursing staff spent an additional 23 weeks per year per physician interacting with health plans, while clerical staff spent 44 weeks and senior administrators spent 2.6 weeks doing so.

...practices spent an average ... nearly one-third of the income, plus benefits, of the typical primary care physician.[/font]

http://www.healthreformwatch.com/2009/05/14/health-insurance-administrative-costs-to-doctors-31-billion-per-year/



U.S. doctors face high costs dealing with multiple insurers

U.S. doctors spend huge amounts of time haggling with insurance companies about billings, claims and other administrative matters, driving up costs and interfering with patient care, a new study has found.

The time spent by doctors and their staffs on paperwork winds up costing each physician nearly $83,000 a year, about four times as much as doctors spend in Canada, according to U.S. and Canadian researchers who released their findings in the online journal Health Affairs.

Canada runs a single-payer healthcare system in which the government pays the bills. In the United States, doctors must negotiate with multiple insurers who offer numerous types of insurance policies and levels of coverage.

If U.S. doctors had slimmed-down administrative costs similar to those in Ontario, Canada’s most populous province, they would trim more than $27 billion a year in healthcare spending, the researchers found.
<MORE>

[shaayecanaan]

123. I watched this PBS doco the other night...

http://www.pbs.org/wgbh/pages/frontline/health-science-technology/dollars-and-dentists/sen-grassley-investigating-abuse-at-corporate-dental-chains/

It mentioned the different rates of coverage in different areas. The rules do seem quite complex. I suppose in addition to medicare you have medicaid, SCHIP, veterans etc and a bunch of other public health agencies. It would seem much better to have these united under one roof.

I am in Australia. The public hospitals here are all run by the states, under single payer systems. Primary care is delivered under a national, unified "Medicare for all" system similar to Canada. Most primary care is provided by small, independent clinics.

Fraud is quite limited, mainly because with one system its fairly easy to pick up.

[Bill USA]

118. I provide links to a study and an article which provide concrete answers to the Administrative costs

.. issue. Especially note the quote from the Krugman article which refers to administrative costs for medicare processed claims in Medicare Advantage Program to the administrative costs for private insurers in the MEdicare Advantage Program. This provides a comparison of administrative costs for government and private insurers with the same patient base so it's an 'apples to apples' comparison. the results: Government administrative costs ~2%, private insurers ~ 11%.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=898160

[ErikJ]

61. 3 problems: PROFITized hospitals, manufactured M.D. Shortage and GOP war on Medicare

since the 1980's the medical industry has become almost totally privatized. Both health insurance and hospitals aused to be non-profit so costs were much lower.
The AMA artificially keeps the MD supply very low to keep their fees high as possible and the GOP has been trying to cut and make Medicare go broke ever since it started in 1965.
Medicare Pt. D was a Republican plan to kill Medicare because they pay RETAIL drug prices and it comes out of the Medicare budget. The VA gets their drugs wholesale why cant Medicare?

[limpyhobbler]

66. That explains why there are no hospitals in Canada.

They all had to shut their doors because of single payer insurance.

[progress2k12nbynd]

82. You missed your sarcasm smiley but I got your drift...

I'm not saying single payer wouldn't work, I'm saying that "Medicare for All" is an uninformed bumper sticker slogan that has no basis in reality unless you reform Medicare payments so that hospitals can sustain themselves on Medicare only. Hospitals don't need to make a profit, but they do need to make enough to do the things that every business does: give employees cost of living raises, replace broken equipment (we just bought a new CT scanner for our Cancer Center last year, $800,000 and that's not even close to top of the line), and recruit and retain good doctors. You can't do that if you're underwater on every patient.

[kenfrequed]

87. It is a starting point upon

And it is a point upon which future reform can be worked on.

I'm sorry, but I don't think your figures are entirely correct. The recompensation of HMO's, private carriers, and various state and federal plans vary significantly.

There are plenty of private insurers that try to gut the clinic I work at at every possible turn, it is just a lot of the costs are passed along in manners that result in more paperwork. Humana for instance denies claims very frequently which requres more workers and more paperwork to attempt to assure payment.

Just judging this on stated compensation rates almost always ignores those cases in which they refuse to compensate. Therefore that number never tells the whole story.

Most private benefit carriers now are requiring ever mroe complex and arcane prior authorization processes for procedures and medications all in an effort to bleed out a clinic or care network and make it cost to much to process the paperwork as well as eat up as much time as possible. All in an effort to push patient's towards absurdly cheap options or to organizations that the insurer has a "relationship" with.

Medicare is slightly flawed but it beats the hell out of private insurance and is about ten times more transparent in its rules and in the methods by which appeals can be made.

[limpyhobbler]

89. oh...

Well you seem to know some stuff about this, about how these payments work, clearly more than me. Thanks for this perspective. I misunderstood what you meant.

[liberalhistorian]

94. That's because in Canada, unlike here, doctors and

hospitals aren't motivated by profit, profit and more profit. There should be no such thing as a "for-profit" hospital or insurance company.

[limpyhobbler]

95. definitely agree with that. nt

[uponit7771]

77. Health is not a product, don't drink the Kookaide, .42 on the dollar is high and if the medical

..institutions REALLY want to make the heavy dough they'd make themselves GSE's with a guaranteed 3% profit from the government......hell...they'd start giving services away just to get the revenue

[liberalhistorian]

93. Yes, but it also doesn't have

to pay gazillion-dollar salaries and perks to company executives, like the big insurers do. Several of such executives make over a million dollars a year in salary alone, not including perks and benefits, at the same time that they're whining that they aren't making enough profit and must deny claims. Well, taking moey and then denying the claims that money is meant to pay for is exactly how they are able to afford the exorbitant compensation for the executives who do little more than sit back in their ivory towers and think up ways to reward employees who deny the most claims.

[Control-Z]

99. In my doctors office the girls tout Medicare.

I've heard them sincerely say how much they love Medicare patients.

It must be for some good reason.

[ProgressiveEconomist]

102. Does Medicare Advantage require any less paperwork? If not,

then why did the CBO find that it spends 11 percent on overhead and profit, compared to 2 percent overhead and zero profit for traditional Medicare?

See post #97 below.

[ProgressiveEconomist]

97. 'Apples to apples': Paul Krugman debunked this Heritage Foundation

argument in favor of privatization by citing research comparing Medicare and Medicare Advantage overhead:

"... the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage. This is a near perfect 'apples to apples' comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population."

See http://krugman.blogs.nytimes.com/2009/07/06/administrative-costs/ .

Thus a 15 percent cap on overhead and profit seems a reasonable requirement for large insurers who are getting tens of millions more customers because of hundreds of billions in federal tax credits.

[dflprincess]

35. Medicare does not have some of the expenses for profit companies have

like outrageous CEO pay or commissions to insurance brokers (which can run into tens of millions of dollars a month - just for one large company).

[a2liberal]

36. That's insurance industry bullshit

I once saw the report where the industry tries to explain why that figure is misleading (centrist coworker showed me). It was all whiny BS that basically just emphasized the real advantages of single payer care. (Stuff like "congress makes rules for medicare and doesn't include that fraction of their salary in the cost, while we have to pay our execs to make rules&quot

[rhett o rick]

41. Huh? That's your argument? It is a little weak. We need more than talking points here. nm

[ErikJ]

46. Profits and expenses of privates explains it

The privates spend billions on distributing profits to shareholders and they include outrageous 7-figure salaries and perks as expenses. Whistle-blower ex-insurance exec Wendell Potter talks about luxury private jets with gold-plated silverware, multi-million $ Christmas parties and gleaming office skyscrapers etc etc.

[Bill USA]

117. many credible studies have been done on this topic. I'm sorry but I could not find a nice drawing

for you to gaze at but as for myself I prefer numbers to bar graphs for the accuracy they provide. (it could very well be if you track down the studies referred to below you might actually find a nice bar graph.)


Medicare Spending and Financing - Kaiser Family Foundation

(page 5)
The costs of administering the Medicare program have remained low over the years – less than 2 percent of program expenditures. As such, program administration is not a contributing factor to Medicare’s expenditure growth. Administrative costs include all expenses by government agencies in administering the program (HHS, Treasury, the Social Security Administration, and the Medicare Payment Advisory Commission). Also included are the cost of claims contractors and other costs incurred in the payment of benefits, collection of Medicare taxes, fraud and abuse control activities, various demonstration projects, and building costs associated with program administration.

(much more)

(emphasis my own)
http://krugman.blogs.nytimes.com/2009/07/06/administrative-costs/

"...the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage. This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population."

[RB TexLa]

40. Medicare has a much higher fraud rate. There is a cost for that low overhead.

[tex-wyo-dem]

53. Really? Do you have proof that...

"Medicare has a much higher fraud rate"? If so, I'd like to see it. I guarantee you that there is more fraud with providers and hospitals overcharging, over-prescribing, ordering unnecessary tests, etc etc when private health insurance is involved, especially for patience with "good" health insurance. To make up their loses, private insurers simply jack up there premium rates or deny coverage for those with "not-so-good" insurance plans (probably makes a lot more financial sense than paying attorneys to go after fraud committed by providers which may take years and is difficult to prove).

[myrna minx]

75. I look forward to reading your evidence. Could you post some links? Thanks.

[kenfrequed]

90. Even were that the case...

And you haven't provided any real evidence that this is the case, the primary agencts committing fraud AGAINST medicare are not beneficiaries but third parties trying to sell medical supplies and fraudulent billing practices by private health care facilities.

It's a good thing no one tries to defraud the military, we might have to disband it.

[BumRushDaShow]

13. K&R but there is one last thing

that they will probably do, which will then expose them for the greed that they are known for and that would hopefully help make the case for single-payer -

In order to still make the profits that are expected from them by TheShareholders™, they will immediately begin massive layoffs of their claims adjusters, resulting in complete chaos among the remaining adjusters, who would then be forced to handle the massive influx of new patients, which will end up meaning none of the doctors or hospitals would get paid on time, and their whole private infrastructure then collapses on itself (which could be why their stocks took a beating last week).

It could get ugly, although it would be good for the Democrats to have their public option "amendment" ready to go (which itself would mean hiring folks in quantity..somehow).

This is what happens when you try to impose a "business model" onto what should be a social program.

[mckara]

15. Very Cool! No Wonder Republicans have been Sounding so Desperate lol

[quaker bill]

17. It will take some serious adjustments for sure

But this really is not as bad as advertised. Lots and lots of government contractors make it by just fine on cost +15%, some even get quite rich. You do have to structure the business for this model, but it is doable, and still potentially quite profitable. The owners may have to put off buying the second mansion on a lake for a bit, and perhaps delete the car elevators when they do build it.

[naaman fletcher]

34. Most contractors make less than that.

It's more like 10-11%.

[quaker bill]

71. That is probably true

When I set the company bidding rates it was cost +15, but the things that were allowed to be counted as "cost" did not cover 100% of real costs. So it was probably more like 10 to 11 percent in the final analysis. Gov't contracts were never as profitable per hour as private sector contracts, but we always sold alot more hours in each contract we won.

During the GHWBush recession / Clinton recovery I shifted the company I was running to mostly Gov't work, and we made good money and grew the business by 25%. The model seemed as tight or a bit tighter than the MLR under ACA.

I am not much worried about the insurance companies. They will be getting a somewhat smaller slice of a larger pie. The stockholders may find the dividend checks a bit smaller, that is about it.

[Odin2005]

18. "But they won't enforce it!!!"

[FarCenter]

19. The larger and more efficient insurers will get more of the market

According to this study, http://www.hks.harvard.edu/m-rcbg/hcdp/numbers/Covered%20Lives%20Summary.pdf , the largest 7 insurers covered about 2/3 of the population in 2007.

33% BCBS
12% Wellpoint
6% United Health
5% Aetna
3% Humana
3% CIGNA
3% Kaiser

4% were insured by other.

16% were uninsured and

15% were on Medicare/Medicaid, but this probably covers Medicare Advantage and the specialized insurers that state use to administer Medicaid benefits.

Usually, after a period of competition, a market organizes with two or three suppliers. Micron, for example, just bought Elpida, so that only Samsung, Micron, and Hynix are left as suppliers of the DRAM memory used in PCs and other devices. Recent mergers in the disk drive busines have driven that down to Seagate, Western Digital, and Toshiba.

[ProdigalJunkMail]

20. how about we have drug companies do the same

spend money on research and development and NOT on effing advertising!?! it's fucking sick...

sP

[abelenkpe]

21. I'd like that

So sick of their advertisements. Wish they were banned like they were when I was a kid.

[Nevernose]

24. To paraphrase Carlin:

Ask your doctor about ZeroCrapAtan? Shouldn't the doctor be telling me which drug I need and not the other way around? Because if I go to my doctor and ask him for drugs, isn't he just a drug dealer at that point?

[Sherman A1]

64. Precisely

You hit the nail on the head.

[Hoyt]

33. They'd stop tomorrow if patients didn't go to their doctor demanding the latest and more costly drug

that is not much -- if anything -- better than older, lower cost drugs.

Insurers, government, suppliers, and patients all have a part in our higher cost system. If we want change, they all have to do things differently.

[Faygo Kid]

22. Great post, as usual. So glad to have you back.

Thank goodness there are doctors out there who know how to set a broken arm.

Or create one.

[donco]

23. I wonder if they will be able

to claim the dough they contribute to Karl as part of the 80%.

[patrice]

25. K&R for another level to this thing that I/we had not yet thought through.

I knew about the MLR, but I had not stopped to think that it would require a detailed analysis of what is care and what it insurance company overhead.

[MannyGoldstein]

27. Between this and the SCOTUS ruling, insurer stocks are getting DEMOLISHED

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1341278134401&chddm=495006&chls=IntervalBasedLine&cmpto=INDEXDJX:.DJI&cmptdms=0&q=NYSE:UNH&ntsp=0

Oops, I guess I was looking at it upside-down when I wrote the title.

[a2liberal]

38. +1

the "invisible hand" is showing us the truth...

[Posteritatis]

30. Anyone know what the O&P ratio they tend to use these days is? (nt)

[Overseas]

31. K&R. Yes please!

[spanone]

37. frickin' k & frickin' r

[a2liberal]

39. Their name for this ratio is telling, isn't it?

Forcing people to be customers of and get their healthcare paid for by an industry that considers paying for that care to be a "loss" to be minimized still doesn't seem like a good idea, even if you force them to take at least a certain "loss".

[riderinthestorm]

43. I'm worried about "waivers". The precedent has already been set

and the big corps have found work-arounds already on other stuff that the Admin has been agreeable to. I really hope they don't cave but I honestly wonder if its a possibility for the MLR

[lonestarnot]

44. Today hegh?

[MadHound]

45. That's a nice headline, but as always, the devil is in the details.

So far fifteen states have passed laws lowering the medical loss ratio much further than what is in the ACA(Maryland down to 60% and North Dakota down to 55%). Since they did this before the medical loss ratio went into effect, those laws stand. Furthermore, there are seven states that have been granted waivers or adjustments to the medical loss ration applicable in their state.

It gets better. A state can be granted a waiver or adjustment if it can show that meeting the magic 80% figure might cause insurers to pull out of markets or limit sales sold to individuals. What, you don't think that the insurance cartel can't conjure up such an illusion?

This is even before the onslaught of insurance industry influence, money and power truly gets into state legislatures. Now that the ACA is the law of the land, the insurance industry is getting ready to tear it down, or at least reshape it in a more corporate friendly image.

The fact of the matter is that it was an ill conceived bill that did not grant a public option to keep at least provide some sort of relief. Worse, in many ways it put the insurance industry in the driver's seat, able to conjure illusions and influence state law. Despite the rosy-glassed, but baseless reasoning by Mr. Ungar, the ACA is not going to lead to single payer or kill the health insurance industry. Quite the opposite, the ACA is likely to turn out to be the insurance industry's best friend.

[dionysus]

49. i love how much this burns you. you'd rather have nothing,as opposed to a first step towards fixing

the system.

every single democratic victory burns you.

[MadHound]

52. Ah, dionysus,

Can't deal with the facts, as always, so you once again opt for the personal insult.

What, didn't know about the fine print concerning adjustment of medical loss ratios? As I said, the devil is always in the details.

You know, in a few years, when the ACA has really started to take a bite out of the middle and working classes, it would almost be fun to post another "THANK GOD IT PASSED" post, but really, by that time, far too depressing.

[dionysus]

54. insult, no, just a factual statement. take heart, you'll soon have an additional 4 years

to complain about how awful the administration is, while complete ignoring the GOP's role in fucking up progress.

maybe if you spent as much time going after the republicans as you do the democrats, you could actually help the situation.

[MadHound]

55. More smear, really now. Get back to me when you want to talk actual facts.

You know, things like how fifteen states have already dropped their medical loss ratios, ten, twenty percent. Facts like how seven states and counting are already getting waivers. You know, pesky little facts like that.

[dionysus]

113. it's not a smear, it's the truth. we just had a major legislative victory. instead of trying to

use this as a building block to work towards something better, you're going to sit there and dream up every worst case scenario you can about this law just to tear it down. what the hell for? to demoralize people? to fulfill some need to say "i told you so"?

if you spent the energy you spend tearing down the dems and Obama, and actually put it towards fixing the problems with this law (or, actaully going after the republicans who prevented us from getting a better law (they always get a free pass), maybe we'd reach a solution faster. how bout working towards strengthening the law? how about using this law as a stepping stone for single payer?

but it seems as if it's just this constant game of i-told-you-so to prove how bad the administration is.

[MadHound]

115. This isn't worst case scenario, this is happening right here, right now.

Twenty two states have laws or waivers that are going to lower the medical loss ratio. What, you don't think that's a huge problem?

I screamed like hell, both here and to every single rep I could contact, that the way the ACA was shaping up was going to produce a destructive piece of legislation, and VOILA, it turns out that I was right. It allows the insurance industry to drive this engine, not we the people.

So now it is tearing down Obama that I point these things out, fine, whatever. I think that people should know the truth, and base their actions on that truth, not some rose colored propaganda that is all to ofter spewed forth. You don't like hearing the truth, oh well, deal.

Question, did you even know about these provisions in the law concerning waivers and states lowering their MLR's?

[OnyxCollie]

51. +1. nt

[Junkdrawer]

70. More "Appearance of helping us while screwing us"...

Shocked, I am shocked.

[Skraxx]

83. Evidence Please, Your Word About These Laws Regarding MLR is not sufficient

Neither is your absurd assertion that if in fact these laws exist, they would trump Federal law.

Back up your assertions, your word is meaningless.

[MadHound]

112. My, my, aren't you the demanding one

And such a noob as well. Gee, you know, if you did some simple research, a few Google searches, oh, and read the ACA itself, you would find all the evidence you need.

You know something, I would have actually provided all the links you wanted if you hadn't decided to be such an ass. But since you decided to come across as King Kong asshole, fuck off, do your own research, I'm not going to spoon feed shit to such an ass.

[Skraxx]

127. LOL! Busted, liar, you got nuthin!

[cyberpj]

104. Ouch! Reality hurts. We have to remember nothing is as easy as it sounds in this country.

At my age and in these times I just assume there are loopholes, cheats and workarounds for just about anything that passes the US congress as "law" these days.

You provided some of the details I am just too jaded and lazy to look up.

Still, I think (I hope) it will be of SOME value but as usual, I'll wait and see.

[NYC_SKP]

47. K/R (nt)

[B Calm]

48. K&R

[treestar]

50. Eventually they could all become non-profits

And that opens the road to a single payer system.

[RainDog]

56. k&r

glad to see you're back.

[Zalatix]

57. Let's hope the GOP in Congress can't whittle away at this rule.

[Blue Owl]

58. Judging by the look on Mitch McConnell's turtle face...

I'd say it's turning out to be a fine day, indeed!

[HiPointDem]

60. Average MLR is *already* over 80%.

http://www.ama-assn.org/amednews/2009/08/24/bisb0824.htm


Their profit margins rest heavily on controlling medical costs, but in the most recent quarter, only Humana and WellPoint recorded a reduction in their medical-loss ratio, the percentage of every premium dollar spent on health benefits....

After years when that ratio stayed around 80%, Aetna, Health Net, Cigna and Coventry all have seen it jump above 86%.


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8727417&mesg_id=8733363

The American Medical News on August 24 reported that, for the second quarter of this year, the average medical loss ratio of the largest publicly traded health plans was 85.2%, but ranged from 82.9% to 86.8%.

http://healthcare-legislation.blogspot.com/2009/11/does-actuarial-value-trump-medical-loss.html

[Alcibiades]

73. But they cannot possibly survive!

Seen upthread.

Anyway, it was a target they knew they could hit.

[HiPointDem]

100. exactly. so not the second coming as the op has it.

[eridani]

62. Nonsense. A number of states already attempt to regulate MLR

They have failed completely at controlling health care costs.

[underseasurveyor]

63. *BOOM*

[Sirveri]

65. I thought the rates were 75 and 80% did they shift the tiers?

[limpyhobbler]

67. I'll believe it when I see it, and save my "halleluja" until then.

But I hope this is right.

[tomp]

68. i'll be waiting for my check, not holding my breath. nt

[MADem]

69. Let's celebrate--time to dance!

&feature=related

[Festivito]

72. NOT TODAY--TODAY. This article was written seven months ago.

SEC. 2718. BRINGING DOWN THE COST OF HEALTH CARE COVERAGE.

(A) REQUIREMENT. Beginning not later than January 1, 2011, a health insurance issuer offering group or individual health insurance coverage (including a grand-fathered health plan) shall, with respect to each plan year, provide an annual rebate to each enrollee...

H. R. 3590 767 and 768

............
A provider's year might end in September of each year, so, I guess, they could wait until October 2012 to calculate the rebate. As to when they would send it out is another guess to me. My guess would be that they would play politics and not pass it out until after the election -- if they're allowed to get away with that.

[CatWoman]

78. I'm sorry, Festivito

I got it off Facebook and didn't even look at the date.

Still, it's good news. Regardless.

[Festivito]

86. It brought a smile to my face just the same. And, soon, those checks will start.

We're doing well on the three phases of telling truth.

We've passed the laugh at us phase, and now we've passed the they try to kill us phase.
Next comes the we always agreed with you phase.

Those checks will be a cool cruel motivator.

Thanks for all you do that I wish I could find the time to do.

[meaculpa2011]

74. I can't comment regarding other states...

but here in New York the legislature is a bought and paid for subsidiary of the health insurance cartel. I'll put my hands in boiling water and wait for my rebate check.

[yesphan]

76. K&R nt

[Snarkoleptic]

79. For perspective, keep in mind the story in the OP is from 12/2/11.

A wonderful thing, but not exactly a new development.

[LaydeeBug]

88. thank you. I was thinking the same thing. nt

[Broderick]

80. I think they helped set the rules

So we will see how it goes.

[loudsue]

81. No. The Insurance companies will use corporate money to elect republicans

so that THIS provision will be stricken from the law. That's why the insurance money has ALREADY started flowing to republican candidates in every race.

First, they got Obama to include them in the health care, rather than extending medicare to everyone. Now that they've got the mandate approved by the supremes, they're going to make the new republican congress change the law so they can suck the last dime out of every single person in this country.

The supremes also ruled that corporations are "people" in Citizens United so that the insurance companies can spend without limit to elect those legislators who will strike down this provision in the law.

[Blue Meany]

85. If this is true, maybe Obama is playing 3d chess...

I was appalled when he appeared to let the for-profit hospitals and pharmaceutical companies off the hook, focusing solely on insurances costs. Although insurances companies contribute to rising insurances costs and do some really inhumane things, they are a smaller part of the problem than the various for-profit companies involved the health care industry.

But if Obama is using the insurance sector to leverage some change in these other areas, it would begin to make sense. The larger the pool of patients, the more leverage they would have to negotiate better prices drugs and care. And, if there were health insurance companies actually going bankrupt, this would actually enhance their leverage.

[47of74]

116. 3d?

Try 180d.

[yurbud]

91. hopefully this will turn them into non-profits (but I doubt it will)

[Ghost of Huey Long]

92. good, now who is going to hold the hospitals accountable for charging absurd amounts of money?

In Japan an MRI $97....in the US it is +$5000....

Poor people still cannot afford the copay on absurd charges from the hospital. This health care money grab isn't just on the insurance end.

[Leopolds Ghost]

96. I would like to rec this, but there is so much wishful thinking here

1. Other options for insurance (for the people who are not already exempt from the proposed fine, such as retirees and the indigent) were removed from the package by all three branches of the government (Exec, Congress, and SCOTUS with the removal of the Medicaid expansion requirement). The bill was co-authored to protect the private insurance industry -from- bankruptcy by requiring healthy people to enlist in it, with limited allowance for cost. The notion is that by essentially mandating universal purchase of these companies' product, they have a guaranteed customer base to draw from, greatly increasing overall receipts (so the theory goes) without significantly increasing costs.

2. As a couple DUers have noted, although I haven't heard much about it myself: this provision provides a perverse incentive to increase health care costs, driving money to the managed care industry. In similar fashion, government agencies are compelled to dispense "christmas money" at the end of the fiscal year in order to avoid returning poorly-managed unpsent funds to the treasury coffers, which would then be deducted from their subsequent budgets...

3. The Executive branch in this current political climate will do nothing to the rules that would have a ghost of a chance of putting major insurers out of business. What this provision -attempts- to do, it seems, is turn insurance into a regulated, competitive utility, with a guaranteed profit margin, by limiting said profit margin. Like Enron, the utilities would be several, in competition with one another for a captive market (but not too many per jurisdiction, it seems) thereby supposedly keeping costs down, instead of one or two highly regulated semi-for profit entities in the manner of postal service.

4. By what mechanism are the insurance companies supposed to issue a rebate to customers for "unspent medical expenditures" if the very money they spent was misspent on other things?

[Fawke Em]

98. I bet a lot of anti-Obamacare business owners will neglect

to their their employees that they were refunded, too. Not that I'm arguing against the employer keeping it in some cases (mine pays all my premiums, for example), but that they will not tell their employees about the good news.

[AllyCat]

101. Maybe today is the day I call my insurance company to remind them (again) to pay

a huge bill for a non-network hospital visit. We were on vacation in another state. 7 stitches in my kid's head. 2.5 hours in the ER waiting for them to do it. $4000!!! And the RW thinks that people who are uninsured should just continue to use the ER for primary care because the rest of us will just pay for it with our policies.

I have no trouble paying for health care for those who can't afford it, but it should be through a level system with public funds for primary care that is more efficient and affordable. If I'm getting charged this much for stitches that could have been done at an urgent care faster, what on earth are people paying when they have heart care in the ER?

[cindyperry2010]

103. i called high mark

bcbs and asked about this very thing today. the representative acted as if it were the first time having heard this. i thought to myself you lying sack of crap . but we will see how do you find out how much they spent on actual health care ? we are in a very large pool

[Romulox]

105. Private insurers shouldn't have their margins guaranteed by the gov't. nt

[Enrique]

106. again?

the bomb went off in December and we all reacted, but everyone has forgotten. Maybe it wasn't a bomb, maybe Ungar is hyping it.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2418799#2423020

[UTUSN]

107. R#229 (my highest ever?) & K for, where do find great items, darling CW?!1

I'm snding it to the local yokel wingnuts, am pasting it here for the yllow highlighting:

[FONT style="BACKGROUND-COLOR: yellow"]1[/FONT]
The Bomb Buried In Obamacare Explodes Today-Hallelujah!
(Note to readers: This article was originally posted in December of [FONT style="BACKGROUND-COLOR: yellow"]2011[/FONT] and gained quite a large following at that time. The story now appears to have new resonance as a result of last week’s Supreme Court decision on Obamacare. While my thoughts as expressed in this piece remain the same, I wanted readers to have the opportunity to place them in context in terms of time and space. REU)


I have long argued that the impact of the Affordable Care Act is [FONT style="BACKGROUND-COLOR: yellow"]not nearly as big of a deal[/FONT] as opponents would have you believe. At the end of the day, the law is – in the main – [FONT style="BACKGROUND-COLOR: yellow"]little more than[/FONT] a successful effort to put [FONT style="BACKGROUND-COLOR: yellow"]an end to some of the more egregious health insurer abuses[/FONT] while creating an environment that should bring more Americans into programs that will give them at least some of the health care coverage they need.

There is, however, [FONT style="BACKGROUND-COLOR: yellow"]one[/FONT] notable [FONT style="BACKGROUND-COLOR: yellow"]exception[/FONT] – and it’s one that should have a long lasting and powerful impact on the future of health care in our country. [FONT style="BACKGROUND-COLOR: yellow"] [/FONT]


That would be the provision of the law, called [FONT style="BACKGROUND-COLOR: yellow"]the medical loss ratio, that requires health insurance companies to spend 80% of the consumers’ premium dollars they collect[/FONT] — 85% for large group insurers — [FONT style="BACKGROUND-COLOR: yellow"]on actual medical care rather than overhead, marketing expenses and profit[/FONT]. 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 ratio will, ultimately, lead to the [FONT style="BACKGROUND-COLOR: yellow"]death of large parts of the private, for-profit health insurance industry[/FONT].

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 [FONT style="BACKGROUND-COLOR: yellow"]efforts made by these companies to avoid paying benefits to their customers at the very moment they need it the most[/FONT].

Today, that bomb goes off. ....


*********UNQUOTE********

[jillan]

108. Another part of Obamacare that the librul media doesn't want reported. Gosh - people might actually

like this part - and that would be horrid for ratings.

[bvar22]

109. Great!!!

I'm sure the Health Insurance Industry is every bit as frightened of the "regulations"
as the Wall Street Banks were afraid of the "Historic Regulations" imposed on them not so long ago.

[DeMutt]

110. If the rethugs take over, will they just defund enforcement?

I fear that, just as they have done with enforcement of various regulations they don't like (and what regulations DO those guys like?) they'll defund the enforcement agency and once again, the middle class is screwed.

[MADem]

111. Welcome to DU--wouldn't that fall under a cabinet budget?

If the GOP gets both houses, we will have trouble--it is why we need to work hard to increase our presence in the legislature.

[tblue37]

122. Not today--Dec. 2, 2011--the date of the article.

I remember reading that article when it first came out.

[Evasporque]

125. Amazing how I never heard about this....no wonder the GOP was against it....

wow...

[tulsakatz]

126. govt regulations

...in other words, the government is forcing them to do what they say they're doing anyway!!

As it turns out, HHS isn’t screwing around. They actually mean to see to it that the insurance companies spend what they should taking care of their customers.

This is why govt regulations are good!! Because companies will always choose to focus on profits instead of anything else. Regulations force them to do the things they should be doing anyway!