Posted on 10/22/2010 9:00:32 AM PDT by Nachum
The National Association of Insurance Commissioners today finally released its final set of regulations on the “Medical Loss Ratios” established under ObamaCare. The NAIC regulations are widely considered to be the ones that the Department of Health and Human Services will adopt. Bottom line: The proposed rules don’t bode well for the long-term health of private health insurance. They would give insurers perverse incentives to neither control costs nor root out fraud.
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There are a few large companies (the old BCBS entities with different names)which administer Medicare and Medicaid benefits under CMS. These will eventually be nationalized or confiscated and the employees will be unionized Federal workers.
Other smaller companies will go out of business. Lost in the discussion are hundreds of small, private entrepreneurs who administer Self-funded Plans. These companies collect premiums and pay benefits. The first small dollar claims are paid from a portion of the premium - thereafter, catastrophic losses are reinsured and reimbursed by larger companies. They will be forced out of business.
http://www.group-insurance-guide.com/self-funded-insurance.html
It will probably reduce competition.
The underlying purpose of ALL REGULATION is to enrich government and the big players in the regulated industry that can afford the regulation at the expense of smaller players in the industry, entrepreneurs who might want to innovate in the industry, and ultimately the consumer who gets lower quality, fewer choices and higher prices and taxes.
Your government at work. ALL regulation does this. Even the regulation that makes you “feel safe” or that is done “for the children”.
DUH....wasn’t that part of its unwritten goals?
BlueCross BlueShield co’s from various states and other major health insurance company’s WROTE THE LEGISLATION THAT IS NOW LAW!
THey specifically wrote the law to elijminate competition while they paid off the politicians to put on a snakeoil salesman show to the rube public about increasing coverage options.
THere are a few dozen articles on FR about the CEOs and CFOs of major health insurers writing the law.
Also... large co’s large Aetna and Humanas are fleeing markets as fast as possible... UNitedHealth will end it’s health insurance business by 2014... so says their largest independent master general agent who cut a deal with the Obama admin to be named a Master Agent in the ObamaCare online coverage exchange... cost him only $1.2MM in donations and lobbying. Net income for him will be ovr $4mm a year... pretty good investment as long as the Democrats stay bought... Daschle’s and Obama’s people usually only rent themselves out.
I’d say that probably is the case at least in the short term.
The Obama regulations put a real strait jacket on companies who want to innovate, they tell insurers what they have to cover and who they have to cover in pretty excruciating detail. Doesn’t leave much room for competition, particularly in the services offered or price wise.
But in the longer term, I think a smart insurance company might be still able to make money. But they have to be able to offer something different.
If insurance companies can sign top medical practices and other providers to exclusive contracts- where they agree to accept only that insurance company’s premium payors as patients, they might be able to survive and thrive.
I don’t think Medicare meets these standards for MLR.
When you require insurors to accept risks who already have medical problems (insuring the burning barn syndrome) and also require them to limit expenses to some bureaucrats idea of what would be a good loss-to-expense ratio, you have set up a situation to put these insurors out of business without specific legislation to do so.
They will either opt out by shutting down or be pushed into bankruptcy.
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