Monday, August 23, 2010

Medical Loss Ratio Fight Looms

Obamacare specifies medical loss ratios for individual and small group at 80% and large group at 85%. NAIC officials are currently meeting to provide reccomedantion's that HHS would enact which would detail precisely what components of cost would count toward calculating the medical loss ratio. Claims are easy but what about nurse hot lines? What about premium taxes or the new taxes imposed by Obama Care--the market share tax on insurers and the $20B tax on medical devices? Should these taxes count towards the medical loss ratio or should it come out of the insurer's margin? Politico covers the story well here as it seems top Democrats are still not happy they cannot dictate policy after pushing the bill through via reconciliation. Former US Congressman J.C. Watt's provides some accurate perspective here.

Of course, the end game here for Democrats is to eliminate the insurance companies from the playing field so they can point out there is no option but single payer remaining as the big bad insurance companies simply could not operate at an efficient medical loss ratio. Very Orwellian--some pigs are more equal than others you see. When the government has a horse in the race with a giant bureaucracy poised to be filled with unionized federal workers who will owe their allegiance to the Democratic Party the stakes are high.

This is what Nancy Pelosi meant when she said we had to pass the bill to find out whats in it. Imagine competing in an industry where your competitors get to write the rules which put you out of business? Of course today this is the fundamental issue the US economy faces in addressing the 9.5% unemployment; small business is just not hiring because we have no freaking clue what our cost structure will look like in the near future thanks to all the 'help" the US congress is giving us "fixing' health care and spending like a drunken sailor coming off an extended cruise with the taxpayers debit card.

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