Insurers must pay 90% of premiums to medical care under deal

[SpartanDem]

TPM was reporting earlier that tougher regulations were part of the deal, but didn't give any detail. The washington post seems to be the first with details saying that a 90% medical loss ratio is one of the new regs. The House bill sets the MLR at 85% and currently most IC's only spend 75 to 80%.


And private insurance companies would face stringent new regulations, including a requirement that they spend at least 90 cents of every dollar they collect in premiums on medical services for their customers

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/08/AR2009120804388.html?hpid=topnews

[derby378]

1. Wow - that's roughly parallel to minimum payouts in Vegas

This is encouraging.

Yes, I actually said something nice about health insurance reform! I'm not as heartless as some of you might think!

[rucky]

3. Well, it is a form of gambling - sorta. n/t

[Schema Thing]

28. I've always said that Health Insurance is an almost exact analog...

...business-model wise, for a casino.


The difference is that the casino can't simply refuse to pay out.

[quakerboy]

41. And I can refuse to go to a casino.

[Schema Thing]

2. boom! there it is.

This MUST happen!

[ClarkUSA]

22. That's CHANGE I can believe in... so does Howard Dean and Paul Krugman, apparently.

:D

[napi21]

4. IF that proves to be true, I think it's a good compromise.

It lets people who work in the ins. businesses keep their jobs, and still gives the consumer a decent deal for their money. I think the ins. co's really are better at catching & stopping fraudulent claims than the gov't is because they have more people to concentrate on it.

[TheCoxwain]

20. The only people who will lose jobs in that industry are claim processors as the insurance cos cant

afford so many of them with the 90% payout rule

[napi21]

35. Wellll...they could always reduce the CEO's compensation! Also

see this re: who processes Medicare claims now.

Medicare - Claims Processing
Medicare HI and SMI fee-for-service claims are processed by non-government organizations or agencies that contract to serve as the fiscal agent between providers and the Federal Government. These claims processors are known as intermediaries and carriers. They apply the Medicare coverage rules to determine the appropriateness of claims.

Medicare intermediaries process HI claims for institutional services, including inpatient hospital claims, SNFs, HHAs, and hospice services. They also process outpatient hospital claims for SMI. Examples of intermediaries are BC/BS (which utilize their plans in various States) and other commercial insurance companies. Intermediaries' responsibilities include the following:

· Determining costs and reimbursement amounts.

· Maintaining records.

· Establishing controls.

· Safeguarding against fraud and abuse or excess use.

· Conducting reviews and audits.

· Making the payments to providers for services.

· Assisting both providers and beneficiaries as needed.

Medicare "carriers" handle SMI claims for services by physicians and medical suppliers. Examples of carriers are the Blue Shield plans in a State, and various commercial insurance companies. Carriers' responsibilities include the following:

· Determining charges allowed by Medicare.

· Maintaining quality of performance records.

· Assisting in fraud and abuse investigations.

· Assisting both suppliers and beneficiaries as needed.

· Making payments to physicians and suppliers for services that are covered under SMI.
http://www.workworld.org/wwwebhelp/medicare_claims_processing.htm

I don't think claims processors would lose their jobs, but may have to go to some other co. that will be processing the Medicare expansion.

[cornermouse]

44. God forbid the people who work in the insurance

business lose their jobs because we got communistic/socialistic universal healthcare. :sarcasm:

Oh wait. We're not supposed to set high standards and goals. We're just supposed to try for that which others tell us will be within our reach only to discover someone moved the goalposts even further down and we're no longer able to reach the bottom rungs and we're supposed to be too dumb to recognize that we've been screwed.

[stray cat]

5. Now thats a big deal compared to current practice

[Clio the Leo]

6. There is a reason why all of the progressives...

.... who have been fighting for health care reform all this time are happy. This is, no doubt, one reason why.

[johnlal]

7. No public option, no deal.

If the Democrats give up the public option, they lose.

[Teaser]

10. yes, even if its a crappy PO

and the proposed OMB managed plan is a better deal.

[johnlal]

11. Not "crappy".

I think they promised us a "robust" public option. I take that to mean affordable health insurance for my family. If they don't deliver, it's not healthcare reform.
(Just like allowing 30% APR on credit cards is NOT credit card reform).

[Teaser]

14. the robust PO was stripped from the bill more than a month ago

.

[johnlal]

16. Yes, and a lot of Democrats pledged that they would not vote for the bill

without a robust public option. Now, it sounds like they are willing to sell out those of us under 55 years of age. 60 members of the House of Representatives have pledged that they will not vote for the bill if it does not contain a robust public option.
If the public option is taken out, and any of these 60 members votes for the bill anyway, they are not to be trusted.

[SpartanDem]

12. But you're getting more regulation in exchange

you're just trading indirect regulation through the public option for direct regulation.

[johnlal]

17. We haven't gotten anything in exchange yet.

The Republicans are going to oppose this no matter what. We watered down the "public option" in the Senate Bill, and what did we get in exchange? Nothing. What makes you think we'll get anything in "Exchange".

[SpartanDem]

40. So a provision that basically caps profits is nothing?

[johnlal]

46. Don't you see that the Dems keep bidding against themselves on this?

The only people bargaining are the Democrats, and with each announced "deal" that is struck between them, the deal gets worse, and the Republicans still are united in their opposition. So next, the Democrats will water it down more and more. If it's just the Democrats making the deals why can't we have the public option AND the caps? Why can't we just have price controls and be done with it?

[Oregone]

18. A public option on a "level playing field" is redundant to private exchange plans

I'm not sure how anyone could be sad that piece of shit was dropped. Yes, it was a good idea when Hacker came up with it, but the politicians turned it to shit quickly. Using its existence as a litmus test for success is very short-sighted.

[johnlal]

19. Level playing field?

People over 55 get an affordable public healthcare option and people under 55 get...?

[Oregone]

24. I'm not sure what you are referring to

When I mentioned "a level playing field", I am referring to the idea used when Congress members stripped the Public Option of all usefulness, so that it would not compete with other exchange plans. It was a stupid idea to begin with, because any advantage of a public option would of been lost. But this is what everyone was cheering for (a symbol).

This result doesn't create a fair system at all, on the other hand, but, expands a mechanism toward the fairest solution possible (single-payer).

[johnlal]

26. They aren't advocating single payer

Single payer was never even considered by these guys. If you mean that lowering Medicare eligibility to 55 somehow puts us on a slippery slope to single payer, I think you're wrong. Many thought that Medicare itself would eventually be a universal plan. It didn't happen.

If Congress members "stripped the Public Option of all it's usefulness", then the progressive congressmen who pledged to vote against the bill should do so-- and then get back to work on a good healthcare reform bill.

[Oregone]

27. "I think you're wrong"

Why?

:)

I would call it more of a mound than a slope, but a major precedent is being established here in expanding a popular socialistic insurance entity.

[johnlal]

30. I think you are wrong because

Medicare was enacted in 1965, and has never come even close to universal coverage. Harry Truman asked for a national health insurance plan in 1945, but Congress resisted the idea for two decades. For the next four decades, Medicare continued to be a plan for older people. The proposed expansion of Medicare will be similarly resisted.
Why take a small victory in the hopes that future governments will "do the right thing" later on down the road. We worked hard to put a Democrat in the White House, and to put Democratic Majorities in both houses of congress. Now is the time to take with both hands. We need to muscle through a meaningful healthcare reform bill. If any Democrat in Congress is disloyal, boot them out and try again. Execute "the nuclear option" and get rid of the filibuster. If we don't pass a healthcare reform, we'll have to wait another couple of decades before we get our chance again. I'm not willing to wait.

[Oregone]

33. I agree with you on many points

But we KNOW that opening it up to 55+ is expanding it. Its expansion, anyway you cut it, takes it closer to single-payer, even if thats not the intended goal.

Yes, this is sad this is all they can do now. The entire process is pitiful. I just think this is less pitiful than last week. Its all pitiful. It will take another 50 years before America catches up with sane nations today. I honestly don't think my whining about it will change that.

The problem with your line of thinking appears to be that you think the Democratic party is the benevolent one--there is no benevolent party. There is no one to go to bat for you. You are not represented. So to talk about the nuclear option and booting out disloyal Democrats is a bit of a fantasy. They, as a party, don't care about delivering a sane universal health care system. So, with that in consideration, this aint bad.

[johnlal]

34. I think there has to be some point where we say "Put up or shut up".

[phleshdef]

8. The audacity of these CORPORATISTS taking away profits from these CORPORATIONS.

And forcing them to spend it on the middle class consumers that paid into it in the first place.

Thats it, I'm DONE!

[Teaser]

9. It should be 99.9999 %. Anything else is corporate welfare

.

[DrToast]

13. Medicare couldn't even survive on that.*

[Teaser]

15. 99.99999999 %. then

try and negotiate with me, will ya?

[phleshdef]

23. Um, people who have jobs with the companies don't work for free.

[ClarkUSA]

21. That's right. MSNBC says Congressional HC-like plans will be offered by private NON-PROFIT insurers.

There will also be "tough spending rules for insurers" according to MSNBC.

[mcablue]

25. Baucus, Lieberman et. all will probably scrap that option

We'll see. Maybe not.

[nemo137]

29. If true, great news.

[slipslidingaway]

31. Does Actuarial Value Trump Medical Loss Ratio?

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

"...But limiting insurers’ administrative expenses is not necessarily the most beneficial strategy for insureds. Ensuring a high actuarial value of benefits provided would be best. The Congressional Research Service earlier this year reviewed “actuarial value” issues. The actuarial value provides an estimate of the proportion of health care expenses a plan likely will pay. As the economy has deteriorated, so has the actuarial value of employer-sponsored health insurance. Individuals covered by employer-sponsored health insurance these days get lower actuarial values and less protection

Workers with employer-sponsored health insurance face underinsurance and unaffordability as their insurance costs more, covers less, and health care costs rise, a study published in the June 2 online issue of Health Affairs found. In Trends in Underinsurance and the Affordability of Employer Coverage, 2004-2007, Jon R. Gabel, senior fellow at the National Opinion Research Center; and Roland McDevitt, director of research for Watson Wyatt Worldwide, found that health care plans covered slightly fewer medical expenses in 2007 than in 2004 (80.1% versus 81.4%), and covered much less for workers who were in the upper half of spenders. Expected out-of-pocket expenses for all adults rose 34%, from $545 to $729, but for the highest-cost 10% of adults expenses went up 39%. Even the lowest half of spenders saw their expenses rise by 23%.

Perhaps new requirements for employers, and insurers, to provide at least a minimum standard benefit package would strengthen “actuarial value?”

[andym]

36. Very important point.

They need to include regulations concerning BOTH acturial value and medical loss ratio, where if one drops below a threshold, changes are forced upon the insurer.

[slipslidingaway]

37. Thanks and yes it is, otherwise the uninsured will become the underinsured...

:(

[tsuki]

32. And they will enforce that how? Calling Arthur Anderson. Calling Arthur Anderson. nt

[slipslidingaway]

38. Important point ! n/t

[SpartanDem]

39. Al Franken had similar admendment

and in it would be HHS's job to enforce these rules. I believe it's the same in the House bill.

[vaberella]

42. And I was told Obamacare just wants to keep friends. ~sigh~ Why do some DUers lie to me?!

Thanks for posting this. It's interesting if this happens to be the case and I like this new addition to the bill.

[eridani]

43. A stupid indirect way to do regulation

In other countries using private insurance to provide universal health care, the basic comprehensive package is set by the government, and insurers are TOLD what the price for it is going to be.

[eridani]

45. Did you mention that there are no enforcement mechanisms? n/t