Tag: medical loss ratio

ObamaCare—The Way of the Dodo

In the latest issue of Virtual Mentor, a journal of the American Medical Association, I try to capture the multiple absurdities that make up ObamaCare. An encapsulation:

During the initial debate over ObamaCare, House Speaker Nancy Pelosi (D-CA) famously said, “We have to pass [it] so you can find out what’s in it.” One irreverent heir to Hippocrates quipped, “That’s what I tell my patients when I ask them for a stool sample.” The similarities scarcely end there…

ObamaCare supporters are ignoring the federal government’s dire fiscal situation; ignoring the law’s impact on premiums, jobs, and access to health insurance; ignoring that a strikingly similar law has sent health care costs higher in Massachusetts; ignoring public opinion, which has been solidly against the law for more than 2 years; ignoring the law’s failures (when they’re not declaring them successes); and ignoring that the law was so incompetently drafted that it cannot be implemented without shredding the separation of powers, the rule of law, and the U.S. Constitution itself. Rather than confront their own errors of judgment, they self-soothe: The public just doesn’t understand the law. The more they learn about it, the more they’ll like it…

This denial takes its most sophisticated form in the periodic surveys that purport to show how those silly voters still don’t understand the law. (In the mind of the ObamaCare zombie, no one really understands the law until they support it.) A prominent health care journalist had just filed her umpteenth story on such surveys when I asked her, “At what point do you start to question whether ObamaCare supporters are just kidding themselves?”

Her response? “Soon…”

(For more proof that ObamaCare supporters can draw from an apparently bottomless well of denial, see this article by Politico.)

ObamaCare’s ‘Medical Loss Ratio’ Regs Encourage Fraud, Unnecessary Medical Services

Yesterday, the U.S. Department of Health and Human Services issued regulations implementing ObamaCare’s rule mandating that health insurers maintain minimum “medical loss ratios.”

Opponents of private health insurance have made a fetish of  MLRs – a statistic that insurers developed to show investors the share of premiums they spend on claims.  (“See? They call it a ‘loss’ when they pay for medical care – that proves they’re evil!”)  So the opponents of private health insurance who crafted ObamaCare included a rule requiring carriers to spend at least 80 percent of premium revenue (large employers must spend 85 percent) on “your health care.”  What could possibly go wrong?

The folly and false compassion of ObamaCare are on full display in the MLR regs, where government bureaucrats have evidently determined that unnecessary and harmful medical services, and even insurance fraud, are in fact good for patients. Okay, HHS bureaucrats don’t actually think that. But ObamaCare’s MLR regs include fraud prevention and utilization review among the administrative expenses on which carriers may spend no more than 20 percent of revenue (15 percent for large employers). That will effectively discourage insurers from policing fraud and conducting utilization reviews that protect patients from the expense and risks of unnecessary medical tests and procedures.

ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.

McDonald’s Case Highlights ObamaCare’s Threat to Low-Income Workers’ Health Insurance, Political Freedom

Many employers, such as McDonald’s, provide health benefits that are less comprehensive than most.  They may have an annual claims limit of $10,000 or less.  But if you’re young, healthy, and need to pinch your pennies, that may suit you just fine.  According to Jerry Newman, a SUNY-Buffalo professor who wrote a book about working at McDonald’s, “For those who didn’t have health insurance through their spouse, it was a life saver.”

These are the health plans (and the workers) that are seeing the highest premium increases under ObamaCare.  The Wall Street Journal reports:

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for “mini-med” plans, which offer limited benefits to some 1.4 million Americans…

McDonald’s, in a memo to federal officials, said “it would be economically prohibitive for our carrier to continue offering” the mini-med plan unless it got an exemption from the requirement to spend 80% to 85% of premiums on benefits…”Having to drop our current mini-med offering would represent a huge disruption to our 29,500 participants,” said McDonald’s memo…

Insurers say dozens of other employers could find themselves in the same situation as McDonald’s. Aetna Inc., one of the largest sellers of mini-med plans, provides the plans to Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc., among others, according to an Aetna client list obtained by the Journal. Aetna also covers AmeriCorps teaching-program sponsors, who are required by law to make health coverage available.

Aetna declined to comment; it has previously indicated that the requirement could hurt its limited benefit plans.

“There is not any issuer of limited benefit coverage that could meet the enhanced MLR standards,” said Neil Trautwein, a vice president at the National Retail Federation, using the abbreviation for medical loss ratio.

Yet again, we have evidence that President Obama’s oft-repeated pledge that “if you like your health care plan, you can keep your health care plan” should have come with a disclaimer: Offer not valid for low-income workers.

Not to fear, says the Obama administration. According to Bloomberg:

The government may allow some low-cost plans like those offered at McDonald’s, which have limited benefits, to get waivers from the health law’s insurance requirements, according to a Sept. 3 Health and Human Services memo. Those requirements were waived for McDonald’s on Sept. 24, [HHS spokeswoman Jessica] Santillo said.

Sorry, but I don’t find it comforting that ObamaCare gives HHS the power to waive these regulations on a case-by-case basis.  Power corrupts.  We’ve already seen HHS Secretary Kathleen Sebelius use other powers granted her by ObamaCare to threaten insurers who contradict the party line about the law’s cost.  The waiver power gives her another club to use against insurers and employers who complain about the law or donate to the wrong political campaigns.  (Will Home Depot, Disney, CVS, Staples, or Blockbuster dare to misbehave?)

Any such criticism now triggers an autonomic reflex among administration spokesmen where they regurgitate the lines, “Americans have seen what happens when insurance companies have free rein. The Affordable Care Act ends insurance companies’ worst abuses.”

As if giving bureaucrats free rein to engage in abusive government practices is an improvement.