Fix Health Care Policy

The Public Option: Alive and Well in Obamacare

Thought the “public option” was dead? Think again. Chief among the most dangerous provisions in Obamacare is the creation of government-sponsored national health plans, which are, in effect, another embodiment of the public option.

Through its multi-year implementation, the law steadily evolves into a national single-payer health care system.

Here’s the background: In 2014, the Office of Personnel Management (OPM), the small agency that runs the federal civil service, will administer at least two nationwide health plans to compete against private insurance. OPM will be responsible for negotiating the new health plans’ medical-loss ratio, profit margins, and premiums.

The OPM-sponsored plans will automatically qualify to compete against private health plans in the new state exchanges and thus will not be subject to the same qualifications and standards outlined in Obamacare for private plans in the exchanges. OPM must contract with an already existing large insurer, because such a plan must be offered in 60 percent of states in year one.

Read the rest on The Foundry…

Tags: medical loss ratio, Office of Personnel Management, premiums, private coverage, profit margins, public option, sponsoring health plans, state health exchange

New Regulation Forces Private Insurers to Advertise Obamacare

Obamacare’s medical loss ratio (MLR) provision began this year and requires insurers in the individual and small-group markets to spend 80 percent of premiums—85 percent for insurers in the large-group market—on medical claims or quality improvements. If the insurer doesn’t spend the required percentage, it must issue a rebate to consumers.

Earlier this month, the Department of Health and Human Services (HHS) finalized a rule that requires insurers to notify rebate recipients that their rebate is all thanks to Obamacare. In the first paragraph it must state, “This letter is to inform you that you will receive a rebate of a portion of your health insurance premiums. This rebate is required by the Affordable Care Act—the health reform law.”

The Kaiser Family Foundation estimates that the rebates to customers will range from $76 on average for those insured in the small-group market to $14 on average for those in the large-group market.

Read the rest on The Foundry…

Tags: health plan premiums, HHS, higher costs, insurance reforms, insurers, medical loss ratio, ObamaCare

Side Effects: More Bad News for Those Who Like Their Current Coverage

When House Speaker Nancy Pelosi (D-CA) said Americans would have to wait until Congress passed Obamacare to find out what was in it, she wasn’t kidding. Since the passage of the Patient Protection and Affordable Car Act nearly six months ago, Americans have been faced daily reality checks from the health care overhaul, and none of them have been good.

In fact, those Americans who own health insurance policies from smaller insurers are already feeling the pinch from Obamacare. Smaller health insurers may face additional obstacles to stay in business in light of the new law’s mandates, with some predicting Obamacare will drive them out of the insurance market altogether. Not only does this mean that Americans who are currently happy with their insurance coverage will see changes they don’t like, but it signals even more choice restriction among health plans.

One of the contributing factors for this fallout is the new requirement that insurers meet federally determined medical loss ratios. The ratios require insurers to spend a certain percentage of income from premiums on medical expenditures, rather than administrative costs, taxes or profits. (more…)

Tags: health care coverage, insurers, medical loss ratio, pre-existing conditions, Side Effects

Side Effects: Future of Private Insurance Rests in Secretary Sebelius’ Hands

Obamacare requires insurers to meet a federally-specified medical loss ratio. That is, they must spend a certain percentage of premiums on medical expenses. The remainder can be used to cover administrative costs and, if there’s anything left, profits. But if insurers don’t shell out enough in medical losses to meet the requirement, they’ll have to rebate the difference to policyholders

The idea is to limit insurers’ profits and create incentives to reduce administrative costs. But it’s not as clear cut as it sounds. After all, what exactly counts as a medical expense? (more…)

Tags: HHS Secretary Kathleen Sebelius, medical expenses, medical loss ratio, ObamaCare, Side Effects

Side Effects: What’s a Medical Expense?

Vague statutory language can make laws hard to interpret and enforce. And that’s certainly true of the recently-passed Patient Protection and Affordable Care Act.

Exhibit A: Obamacare requires insurers to spend at least 85 percent of group market premiums–and 80 percent of individual market premiums–on medical expenses. The remainder goes to administrative costs and profits. But what does–and doesn’t–count as a medical expense? Health insurers, legislators and regulators are already haggling over that question. (more…)

Tags: insurers, medical loss ratio, ObamaCare, premiums, Side Effects