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Here's why the health care law's MLR rule is significant
Medigap Medical Loss Ratio Improvement Act
Posted by Don McCanne MD on Wednesday, Jul 27, 2011
<...>
Meanwhile, the industry is on the verge of gutting the medical-loss ratio (MLR) rule. The MLR requires insurance companies to spend at least 80 percent of premiums on medical care – and if they don’t, the money must be rebated to policyholders.
Insurers hate the MLR rule for obvious reasons – they want to spend less on providing actual health care so they can increase returns for profits and salaries for executives. So lobbyists have been hard at work twisting arms at the state and federal level.
They may have gotten their way. The National Association of Insurance Commissioners (NAIC) – an organization representing the chief insurance regulators in all 50 states – voted to send a resolution to Congress in support of suspending or changing the calculation of the MLR.
If Congress agrees, $1 billion in expected rebates would be cancelled and the MLR rule voided. Lynn Quincy of the watchdog group Consumers Union said of the decision: “This is a serious setback in the struggle to protect consumers. … It is also a step back for working families.”
- more -
http://www.pnhp.org/news/2011/december/less-care-for-fewer-and-fewer
Posted by Don McCanne MD on Wednesday, Jul 27, 2011
<...>
Meanwhile, the industry is on the verge of gutting the medical-loss ratio (MLR) rule. The MLR requires insurance companies to spend at least 80 percent of premiums on medical care – and if they don’t, the money must be rebated to policyholders.
Insurers hate the MLR rule for obvious reasons – they want to spend less on providing actual health care so they can increase returns for profits and salaries for executives. So lobbyists have been hard at work twisting arms at the state and federal level.
They may have gotten their way. The National Association of Insurance Commissioners (NAIC) – an organization representing the chief insurance regulators in all 50 states – voted to send a resolution to Congress in support of suspending or changing the calculation of the MLR.
If Congress agrees, $1 billion in expected rebates would be cancelled and the MLR rule voided. Lynn Quincy of the watchdog group Consumers Union said of the decision: “This is a serious setback in the struggle to protect consumers. … It is also a step back for working families.”
- more -
http://www.pnhp.org/news/2011/december/less-care-for-fewer-and-fewer
The fact is this is a huge change, and the insurance companies didn't get their way.
HHS ensures consumers get better value for their health insurance dollar
http://www.hhs.gov/news/press/2012pres/02/20120216b.html
Here is PNHP commenting on a similar proposal to change Medigap.
Medigap Medical Loss Ratio Improvement Act
Posted by Don McCanne MD
And…
<...>
The insurers are really in a bind. They can’t reduce their administrative services, yet, because the plans are only supplements, they can’t pay out much more in benefits. Requiring the same medical loss ratios as apply to comprehensive plans would likely destroy the Medigap model, and insurers would have to withdraw these plans.
That would be good since these plans are such a terrible value no matter how you cut it. But we have to keep in mind why these plans exist. Medicare benefits are inadequate, leaving beneficiaries exposed to excessive costs. To eliminate this wasteful private industry of Medigap plans, the appropriate solution would be to reduce or preferably eliminate the out-of-pocket cost sharing of Medicare.
Although that reintroduces the “moral hazard” issue of “free” health care, other nations have shown that comprehensive “free” health care can be provided at much lower costs than ours. If we’re going to talk about morality, then we should ask, what is moral about injecting an expensive, superfluous, worthless industry into our health care?
This legislation is important because it identifies the problem of excessive administrative waste, which adds even more to our very high health care costs. But rather than this bill, we really do need an improved Medicare for all.
http://pnhp.org/blog/2011/07/27/medigap-medical-loss-ratio-improvement-act/
Posted by Don McCanne MD
Rep. Stark, Sen. Kerry Introduce Bill to Provide Medicare Beneficiaries Better Value for Their Medigap Premium Dollars
Congressman Pete Stark
Press Release, July 26, 2011
Today, Rep. Pete Stark (D-CA) and Sen. John Kerry (D-MA) introduced the Medigap Medical Loss Ratio Improvement Act. The legislation improves consumer protections in the Medigap marketplace by raising the minimum percentage of premium dollars that must go toward medical care, not executive compensation or administrative costs. This percentage is called the medical loss ratio (MLR).
Under current law, Medigap insurers are required to meet an MLR of only 65 percent in the individual marketplace and 75 percent in the group market. The Medigap Medical Loss Ratio Improvement Act would require Medigap insurance plans to spend at least 85 percent of every premium dollar on medical care in the group market and 80 percent in the individual market.
http://www.stark.house.gov/index.php?option=com_content&view=article&id=2260:press-release-stark-kerry-introduce-bill-to-provide-medicare-beneficiaries-better-value-for-their-medigap-premium-dollars&catid=82:press-releases-2011&Itemid=62
Congressman Pete Stark
Press Release, July 26, 2011
Today, Rep. Pete Stark (D-CA) and Sen. John Kerry (D-MA) introduced the Medigap Medical Loss Ratio Improvement Act. The legislation improves consumer protections in the Medigap marketplace by raising the minimum percentage of premium dollars that must go toward medical care, not executive compensation or administrative costs. This percentage is called the medical loss ratio (MLR).
Under current law, Medigap insurers are required to meet an MLR of only 65 percent in the individual marketplace and 75 percent in the group market. The Medigap Medical Loss Ratio Improvement Act would require Medigap insurance plans to spend at least 85 percent of every premium dollar on medical care in the group market and 80 percent in the individual market.
http://www.stark.house.gov/index.php?option=com_content&view=article&id=2260:press-release-stark-kerry-introduce-bill-to-provide-medicare-beneficiaries-better-value-for-their-medigap-premium-dollars&catid=82:press-releases-2011&Itemid=62
And…
The Hill
July 26, 2011
The insurance industry opposes Kerry and Stark’s bill.
The healthcare law’s MLR requirements didn’t extend to Medigap because it’s a form of supplemental coverage, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
As supplements, Medigap plans collect lower premiums than comprehensive policies, but the administrative costs aren’t necessarily lower. Extending the 80 to 85 percent MLR standards to Medigap would disrupt coverage with which seniors are satisfied, Zirkelbach said.
http://thehill.com/blogs/healthwatch/health-insurance/173623-aarp-backs-bill-to-extend-new-rules-on-insurers-spending
July 26, 2011
The insurance industry opposes Kerry and Stark’s bill.
The healthcare law’s MLR requirements didn’t extend to Medigap because it’s a form of supplemental coverage, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
As supplements, Medigap plans collect lower premiums than comprehensive policies, but the administrative costs aren’t necessarily lower. Extending the 80 to 85 percent MLR standards to Medigap would disrupt coverage with which seniors are satisfied, Zirkelbach said.
http://thehill.com/blogs/healthwatch/health-insurance/173623-aarp-backs-bill-to-extend-new-rules-on-insurers-spending
<...>
The insurers are really in a bind. They can’t reduce their administrative services, yet, because the plans are only supplements, they can’t pay out much more in benefits. Requiring the same medical loss ratios as apply to comprehensive plans would likely destroy the Medigap model, and insurers would have to withdraw these plans.
That would be good since these plans are such a terrible value no matter how you cut it. But we have to keep in mind why these plans exist. Medicare benefits are inadequate, leaving beneficiaries exposed to excessive costs. To eliminate this wasteful private industry of Medigap plans, the appropriate solution would be to reduce or preferably eliminate the out-of-pocket cost sharing of Medicare.
Although that reintroduces the “moral hazard” issue of “free” health care, other nations have shown that comprehensive “free” health care can be provided at much lower costs than ours. If we’re going to talk about morality, then we should ask, what is moral about injecting an expensive, superfluous, worthless industry into our health care?
This legislation is important because it identifies the problem of excessive administrative waste, which adds even more to our very high health care costs. But rather than this bill, we really do need an improved Medicare for all.
http://pnhp.org/blog/2011/07/27/medigap-medical-loss-ratio-improvement-act/
No matter how anyone tries to downplay the MLR change, it's significant.
The Bomb Buried In Obamacare Explodes Today-Hallelujah!
http://www.forbes.com/sites/rickungar/2011/12/02/the-bomb-buried-in-obamacare-explodes-today-halleluja/
Wendell Potter Agrees: Big-Profit Health Insurance Almost Dead
http://www.democraticunderground.com/1002390746
24 replies
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