“This is just patently false scaremongering.
ObamaCare sets a national standard of 80 cents of every premium dollar set aside for claims.”
—Do you really think that Obamacare is going to be successful in that effort? When have price controls, or forced cost controls by the government, ever really worked? Something else has to give.
“With that set aside money, the insurance companies invest in low risk low yield investments... this scaremonger is instigating private individuals to invest in higher risk investment strategies with very small sums of money playing roulette with their medical treatment needs.”
—Who says that individuals have to put their money into risky investments? And why do we necessarily need to impose administrative costs on individuals- wouldn’t it make more sense for that extra amount of money to be invested as well (even in low risk investments)?
And besides... the alternative options are growing narrower and narrower each year as we rush headlong into bankruptcy.
Yes, it is law, for every dollar in premium collected, 80 cents will be set aside for claims. The state Departments of insurance all have enforcement officers/accountants in place. It’s an effective system, the fines are huge, and the insurance companies will never escape the claims ratios. Once caught, every dollar not set aside has to be put back into the claims reserve accounts, or the insurance companies will be forced into a receivership type situation, or lose their license to sell in the state.
Worse case scenarios, such as outright fraud by executives, result in state and Federal prosecutions on a regular basis...