Daily Archives: March 19th, 2012

Defusing the Bomb in Obamacare

I remember reading this Forbes article in December 2011:

The Bomb Buried In Obamacare Explodes Today – Hallelujah!

Personally, I’m a single-payer gal and look forward to a universal plan for Americans, but the article sounded like exciting good news for the Affordable Care Act. At the same time, I wondered how long it would take for “the medical loss ratio rule” to be attacked. It didn’t take long.

The Medical Loss Ratio Rule:
The MLR rule provides unprecedented accountability of health insurance companies. It will provide protection and value to approximately 74.8 million insured Americans. Estimates from last year indicate that, starting in 2012, up to 9 million Americans could receive rebates worth from $0.6 to $1.4 billion. However, the existence of the MLR requirement may have improved the pricing patterns of plans; some reports indicate that premium increases were tempered by the prospect of having to pay rebates.  The rule, unchanged from the earlier publication, also allows insurers to include payments recovered through fraud reduction efforts in their calculation of incurred claims (up to the amount of fraudulent claims recovered), thereby encouraging plans to fight fraud. The final rule streamlines reporting and rebate requirements, and reduces the administrative burden on issuers and employers, while continuing to ensure that consumers receive maximum value for their health care dollar.

Also, consumers don’t have to pay taxes on the rebates they get from insurance companies that violate the spending rules. It’s free money.

ProPublica has been following this issue. In Senate Bill Could Roll Back Consumers’ Health Insurance Savings, it looks like the bills designed to render the rule ineffective are well under way and worth a call or visit to your representatives.

“Insurance companies have supported the two bills, claiming that the rebate rule, as it stands now, stifles jobs and actually drives up insurance premiums.”

However, a “2011 government report found that most insurance companies were, in fact, lowering their premiums to meet the requirements, as the administration had hoped.”

The bills are:

  • S. 2068: Access to Independent Health Insurance Advisors Act of 2012 (Sen. Mary L. Landrieu, D-La., Sen. Johnny Isakson, R-Ga., Sen. Lisa Murkowski, R-Alaska, Ben Nelson, D-Neb.)
  • H.R. 1206: Access to Professional Health Insurance Advisors Act of 2011 (Rep. Mike Rogers, 6th term Republican from Michigan 8th District)

As usual, the corporations want to socialize their overhead and have the people pay the commissions they owe to agents and brokers – clearly an administrative cost of doing business. The MLR doesn’t threaten anybody or anything other than fraudulent business practices and the drive to maximize industry profits. It’s a regulation that protects the people and provides that only a reasonable amount of our premiums will be spent on non-medical related administrative costs like advertising.

Here’s how these insurer-supported bills are being framed and pushed by our “servants” on both sides of the aisle to accommodate their corporate buddies:

Landrieu, Isakson Introduce Bill to Protect Small Insurance Agents, Consumers
This legislation addresses a provision of the Affordable Care Act known as the medical loss ratio (MLR) that has had dramatic, unintended consequences for nearly a half million licensed independent agents and brokers, and their employees. Due to the Department of Health and Human Services’ (HHS) interpretation of the MLR provisions in the health reform law, health insurance carriers are required to treat agent and broker commissions as part of their administrative costs. This threatens the ability of independent agents and brokers to stay in business and serve the public.

It does nothing of the sort! The MLR rule merely places the burden of paying these commissions and other administrative costs on the insurance companies rather than the people, and it may be our best hope for adequate control over cost shifting and other typical abuses.

These bills are designed to chip away at the only thing that slipped passed the industry lobbyists who helped write the Affordable Care Act. If the bills go through, the bomb in Obamacare will be a big bang for corporate profits and those wonderful bonuses that their CEO’s manage to wrangle up every year.

Funneling the people’s money up to the top is what neoliberals are good at, and it’s exactly what they’re doing, here.

Paul Krugman has more on the lies being spread by our “servants” about the Affordable Care Act: Hurray for Health Reform
“For now, however, most of the disinformation involves claims about costs. Each new report from the Congressional Budget Office is touted as proof that the true cost of Obamacare is exploding, even when — as was the case with the latest report — the document says on its very first page that projected costs have actually fallen slightly. Nor are we talking about random pundits making these false claims. We are, instead, talking about people like the chairman of the House Republican Policy Committee, who issued a completely fraudulent press release after the latest budget office report.”