Skip to comments.Final Medical Loss Ratio Rule Rebuffs Insurance Agents
Posted on 12/06/2011 3:29:15 PM PST by Nachum
The Obama administration issued a rule today that is sure to disappoint insurance agents: Fees paid to brokers and agents wont count as medical care, under limits imposed on insurers in the 2010 federal health law.
Photo by Thomas Hawk via Flickr
Thats key because under the health law, insurers must spend at least 80 percent of their premium revenue on medical care and quality improvement or issue rebates to consumers. The target is 85 percent for large-group issuers.
Brokers had lobbied hard to have their fees exempted from the calculation of administrative costs, which also includes such expenses as marketing and executive salaries, saying that without such a move, commissions will be cut and agents could lose their jobs, leaving consumers without as much access to brokers who help them choose health insurance.
(Excerpt) Read more at capsules.kaiserhealthnews.org ...
The list, Ping
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Wage & price controls, Obama style . . . drip, drip, drip . . . the Rats are relentlessly killing capitalism, private property rights and freedom one law and reg at a time. The frog is not too far from being boiled.
With Mini-Madoff Obama in office - we are all going to be unemployed.
Under what clause in the United States Constitution is permission given to the Federal government to force a company or corporation to spend ANY money?
Risk escalation for pre-existing and adverse selection will wipe out all existing reserves.
When actuarially sound underwriting is prohibited - private health insurance is done and gone. Government confiscation by any other name.
Jobs eliminated: Competitive marketing & sales personnel. Underwriters. Actuaries. Claims examiners. Risk managers and financial services.
The same part that says they can fine you if you don’t buy a certain product from a private company. The commerce clause says they can pretty much do anything they want to, or at least their interpretation of it says they can. If they can fine you for not having health insurance, they can order you to do anything they want you to. Gas prices are too high? You must buy a Chevy Leaf. Newspapers are dying? You must buy a daily paper every day. Next they’ll say that we aren’t allowed to profit from our jobs at all. I was on DU last night and someone wanted to make interest on loans illegal. At least they’re consistant.
I am not understanding this, but it sounds to me like 20% of premiums paid out should be coming back to policy holders?
‘I am not understanding this, but it sounds to me like 20% of premiums paid out should be coming back to policy holders?’
Not like that. The companies, by law, must pay out a minimum of 80% of all revenues in claims, if not, the company must rebate any extra to consumers.
>>I am not understanding this, but it sounds to me like 20% of premiums paid out should be coming back to policy holders?<<
>Not like that. The companies, by law, must pay out a minimum of 80% of all revenues in claims, if not, the company must rebate any extra to consumers.<
so - what is not spent on claims, has to go back then up to 20% right?
‘so - what is not spent on claims, has to go back then up to 20% right?’
back up? I am not sure what that means. Imagine it as 80 cents out of every dollar paid out, by law, in claims. The company gets to keep 20 cents. Any more must be returned to the policy holder.
It is the death of private insurance. It destroys the profit margin of the industry and the commission structure for sales. The profit margin of the large insurance carriers is approx. 3 to 5% of premium or less. Now there will be little or no profit. The companies have already begun to drop out of the market. It is a matter of time until they all do if Obamacare remains law.
anyway to screw them down more and more. and make his game the only one in town.