White House unveils awaited Affordable Care Act profit margin rule

The Hill ^ | 2/16/13 | Ben Goad

[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 Obama’s 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 House’s 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.

[Libloather]

Dictating profit. The Kenyan way.

[berdie]

later

[Vince Ferrer]

Ask an older person in military contracting how well cost plus contracting reduced costs.

[dennisw]

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

[Varsity Flight]

Meaningless PR stunt, as the rates get jacked up per percentage.

Extortion-Care: Make bricks without straw.

[fhayek]

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.

[shibumi]

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.)

[rockinqsranch]

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.

[JZoback]

-——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...

[shibumi]

"I’ll bet this is first time the Federal Govt has ever dictated profit.."

They do it to the Oil Industry. (Not that it makes it right, mind you.)

[Obama_Is_Sabotaging_America]

There should be a LAWSUIT taken to SCOTUS over the ‘dictating profit’ or ‘profit cap’ portion of 0bamacare; UNCONSTITUTIONAL!

[Yardstick]

Gag me with a spoon.

[Yardstick]

Who needs economic literacy when you’ve got social justice, right?

[DUMBGRUNT]

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!

[mylife]

I am sure this will result in a superior product and service. /s

[dennisw]

When you include contractors how many people work for state, county, city, federal governments in America? My guess is 40% of the work force

[YankeeReb]

Overhead expenses and profits would be capped at 15 percent. ...

Does anyone else feel we're living Atlas Shrugged?

[YankeeReb]

... 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.

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.

[Publius]

Directive 10-289:

1. All workers are bound to their jobs and can neither leave nor be fired under penalty of one year in prison. The Unification Board, reporting to the Bureau of Economic Planning and National Resources, possesses judicial authority. All citizens upon turning 21 must register with the Unification Board which will assign them jobs in the best interests of the nation.
2. All businesses must remain in operation and cannot close under penalty of nationalization and confiscation of property.
3. All patents and copyrights are to be turned over to the government by the use of “voluntary” Gift Certificates. The Unification Board will license those processes to all applicants to eliminate monopolies. All brand names and private trademarks are abolished.
4. No new inventions shall be produced or invented. The Patent Office is suspended.
5. All business establishments will produce the same amount every year as they did in the baseline known as the Yardstick Year, to be enforced by the Unification Board.
6. All citizens must purchase the same amount of goods every year as they did in the Yardstick Year, to be enforced by the Unification Board.
7. All wages and prices are frozen.
8. All cases arising from this directive are to be decided by the Unification Board.

[BitWielder1]

Idiocy. If you want something done, let people make money doing it and it will be done.
You don't even have to pay them with taxpayer money, just stand back and watch.