'Crack down' on HMOs (more regulations) proposed by Angelides

LAT ^ | Aug. 3, 2006 | Ed Mendel

[FairOpinion]

Phil Angelides, the Democratic candidate for governor, said yesterday that he would curb excessive HMO health plan administrative costs, making care more affordable for families and businesses.

The state treasurer said his Republican opponent, Gov. Arnold Schwarzenegger, has failed to use existing law that holds health maintenance organizations accountable when administrative costs, including profits, exceed 15 percent of premiums.

“The governor has the authority to do it, and I'm going to do it,” Angelides said as he proposed a “crack down” on HMOs during a campaign event at the Clairemont Community Services Center in San Diego.

A spokesman for the Schwarzenegger campaign said his understanding of the law is that the governor does not have the power to mandate profit margins, but can ask for an investigation if overhead and profits exceed 15 percent.

“Phil Angelides has yet to give any health care proposals that are new,” said spokesman Matt David. “He continues to recycle failed policies that will cost taxpayers billions of dollars.”

[FairOpinion]

I personally don't like HMOs, but how is that the business of the government how private businesses allocate their costs within their own company?

[Bigh4u2]

" when administrative costs, including profits, exceed 15 percent of premiums."

So basically, if administrative costs are 14% then they are not allowed to make more than 1% 'profit'.

Well, they ought to be out of business in a very short time then.

[FairOpinion]

"Well, they ought to be out of business in a very short time then. "


==

That's the CA Dem plan -- then when HMOs and insurance companies are out of business, they can pass universal healthcare.

[FairOpinion]

"when administrative costs, including profits, exceed 15 percent of premiums."

So basically, if administrative costs are 14% then they are not allowed to make more than 1% 'profit'.


=====

And based on this regulation, it's the HMO-s own interest to keep down administration costs -- so what is Angelides' contribution, except more regulation and putting them out of business.

[Extremely Extreme Extremist]

A spokesman for the Schwarzenegger campaign said his understanding of the law is that the governor does not have the power to mandate profit margins, but can ask for an investigation if overhead and profits exceed 15 percent.

Damnit Arnold, why can't you just call this left-wing nutjob the spade he is?

[Bigh4u2]

Well, at least this guy gets it.

" said spokesman Matt David. “He continues to recycle failed policies that will cost taxpayers billions of dollars.”

[FairOpinion]

“He continues to recycle failed policies that will cost taxpayers billions of dollars.”



That's all the Dems offer everywhere. It really is amazing that the electorate is so closely divided. One would think most people, as in 70-80% would have figured this out by now.

[Nick Danger]

Angelides "Talking Point" was first recorded back in 1952. It sailed to the top of the charts, where it stayed from June through November, when it was finally defeated. It's been recorded by several Democrats since then, including a 1979 remake by Linda Ronstadt and The Moonbeam.

The name of that song from 1953 that defeated "Talking Point"? It was "Ha Ha I Won" by Goodwin Knight and the Republicans.

[BenLurkin]

TAX

SPEND

REGULATE

No thanks.

[goldstategop]

As a long time member of Kaiser Permanente, how does Angelides plan to roll back high premiums? He must have discovered something about economics the rest of us haven't. Does he think HMO's are going to deliver medical care at a loss?

(Go Israel, Go! Slap 'Em Down Hezbullies.)

[Zakeet]

For profit HMO's typically run from 10-15 percent of revenues for administrative expenses. Nonprofit HMO's typically run from 7-10 percent (I've seen some of the better ones clock in as low as 3 percent).

The difference in cost margins in the way HMO's skim off profits through things like "computer licensing and data processing charges" to the home office, "supervision and management fees" to the home office, administrative overhead, etc.

For profit HMO's did such a good job of bringing money to the bottom line during the 90's that their stock outperformed every other segment on Wall Street including High Tech and Dot Com startups. The chairman of United (whose empire also includes a huge medical insurance company) just cashed in on a $1.8 billion payday -- and I'm sure he "earned" every penny.

It needs to be remembered that HMO's are not insurance companies and do not offer an insurance product. They have no financial reserves -- and cannot have any by law. Instead, HMO's are nothing more than shell companies which collect "contributions" from "members" and then use this cash to pay medical bills and other "operating expenses."

It also needs to be remembered that all "risk management" companies, including insurers and HMO's, are in the business of taking in premiums and not paying claims. As such, they are infamous for hiring legions of lawyers to battle claimants, regulators and the like -- and consider this "just part of the cost of doing business." And all too often, the b*stards win.

The net result is that this is one area where government regulation actually does a little good by holding insurance company theft down to somewhat manageable levels. And in areas where there is almost no regulation -- through ERISA preemption for example -- the wolves very often run wild.

[newzjunkey]

HMOs are supposedly non-profits aren't they? Kaiser Permanente, for example.

If HMOs are getting non-profit benefits while jacking rates when it isn't necessary, they need to be held accountable.