Skip to comments.White House unveils awaited Affordable Care Act profit margin rule
Posted on 02/16/2013 7:20:45 PM PST by Libloather
A proposed federal rule to cap profit margins for certain health insurance plans and prescription drug benefit programs is now available for review.
The latest in a raft of rules required by President Obamas landmark healthcare law, the proposed rule was drafted by the Centers for Medicare and Medicaid Services (CMS) and sent to Pennsylvania Avenue on Thursday.
The White Houses Office of Information and Regulatory Affairs (OIRA) is moving quickly to issue the proposal, which will hit the Federal Register on Tuesday. That begins a 60-day comment period. CMS will consider all comments before finalizing the rule.
The 116-page proposed rule can be read here. The rule is considered economically significant, meaning it carries an economic impact of more than $100 million.
The measure would implement 85-percent medical loss ratio requirements on Medicare Advantage plans and the Medicare Prescription Drug Benefit Program. In other words, plans that deliver services under those plans must spend at least 85 percent of their premiums on clinical services, prescription drugs, quality improving activities, and direct benefits to beneficiaries, according to the proposal.
Overhead expenses and profits would be capped at 15 percent.
While those broad contours of the plan were set out in the Affordable Care Act, the healthcare industry has anxiously awaited the proposed language, which details nuances of the forthcoming regulations.
The rule would also institute penalties for those providers that fail to meet the caps requirements.
If a plan sponsor fails to meet MLR requirements for more than 3 consecutive years, they will also be subject to enrollment sanctions and, after 5 consecutive years, to contract termination, according to language in the proposal.
Since 2011, most general health insurers have been required to spend either 80 percent or 85 percent of their revenue on medical expenses, depending on their size. The rule expanding caps to Medicare Advantage - a program aimed at the elderly and disabled - and the Prescription Drug Benefit Program is set to take effect next January.
Ask an older person in military contracting how well cost plus contracting reduced costs.
I’ll bet this is first time the Federal Govt has ever dictated profit...Thanks to our African style nutcase-dictator. It all started in Hawaii while chooming around and being mentored (molested?) by Frank Marshall Davis
Meaningless PR stunt, as the rates get jacked up per percentage.
Extortion-Care: Make bricks without straw.
The president is a fool. An arrogant fool, but a fool nevertheless. Perhaps he should read up on Diocletian’s freezing of food prices in fourth century.
So how about we cap the net worth increase of every public office holder at 15% over his net worth at the time of taking office?
And let’s do the same to the faceless bureaucrats who administer this crap.
.....and everyone in the IRS, FDA, FCC. SSA, TSA, FBI, DHS, HHS, etcetera, etcetera, etcetera (done in best Yul Brynner voice.)
How come we can’t tell the Street Punk in Chief to stick it where the Sun don’t shine? I believe we the people have spoken loudly for four plus years now telling him, and the rest of government we don’t want this healthcare plan.
Why are we still saying no when we already said NO?
What do we have to do to impress upon those that allegedly represent we the people that we the people are not happy with the shoving of their stuff in our faces?
Is it going to take the revolution I keep reading about?
This crap has got to stop, and stop now.
How many other ways are there to say NO? Perhaps we should try one of them.
-——Overhead expenses and profits would be capped at 15 percent———
Humm....as expenses creep up profits will go down...
Services will be cut...
I wonder if “overhead “ expenses include fixed and variable costs....and did they change the depreciation rules ?
Huge impact on the bottom line...
There should be a LAWSUIT taken to SCOTUS over the ‘dictating profit’ or ‘profit cap’ portion of 0bamacare; UNCONSTITUTIONAL!
Gag me with a spoon.
Who needs economic literacy when you’ve got social justice, right?
The idea is not to dictate profit but to crush the system under so many rules.
No bidders? The government will just have to run it for you.
Just think of the ‘projected savings’ on a single payer system!
I am sure this will result in a superior product and service. /s
When you include contractors how many people work for state, county, city, federal governments in America? My guess is 40% of the work force
Does anyone else feel we're living Atlas Shrugged?
Hate to disillusion you, but we (not you , me or most on FR but a majority) reelected this turd to another 4 years. In his mind he has a man-date.