FOX NEWS – 3 ArticleS we thought you would be interested in – The medical loss ratio aspect or portion of this bill was brought to our attention by Sen Burr. Your commentaries or news room needs to really expose this and let the American people know what is actually going on. This has extreme ramifications on our society as a whole and is being done behind the backs of the general public. READ SEC. 9010 of Health Care Reform Bill and Sec 10923 in Managers Amendment.
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North Carolina concerned citizen!!!!
CBO: 90% Medical Loss Ratio Would Make Private Insurance A Government Program
http://wonkroom.thinkprogress.org/2009/12/14/cbo-90-mlr/
A compromise provision in the Senate health care bill that requires insurers to rebate beneficiaries if they fail to spend 90% of premium dollars on medical care could add new costs to the federal government, limiting health reform’s deficit reductions. Sen. Jay Rockefeller (D-WV) inserted the new medical loss ration (MLR) requirement (for insurers participating in the small or individual group markets) during the Gang of 10 public option negotiations, but a new directive from the Congressional Budget Office (CBO) may force Majority Leader Harry Reid (D-NV) to abandon the provision and could further undermine the now defunct compromise.
The CBO’s “harsh assessment” concluded that the 90% MLR requirement — which insurers would only have to maintain until 2014 — “would devastate the industry“:
CBO: 90% Medical Loss Ratio Would Make Private Insurance A Government Program
http://wonkroom.thinkprogress.org/2009/12/14/cbo-90-mlr/
A compromise provision in the Senate health care bill that requires insurers to rebate beneficiaries if they fail to spend 90% of premium dollars on medical care could add new costs to the federal government, limiting health reform’s deficit reductions. Sen. Jay Rockefeller (D-WV) inserted the new medical loss ration (MLR) requirement (for insurers participating in the small or individual group markets) during the Gang of 10 public option negotiations, but a new directive from the Congressional Budget Office (CBO) may force Majority Leader Harry Reid (D-NV) to abandon the provision and could further undermine the now defunct compromise.
The CBO’s “harsh assessment” concluded that the 90% MLR requirement — which insurers would only have to maintain until 2014 — “would devastate the industry“:
A proposal to require health insurers to provide rebates to their enrollees to the extent that their medical loss ratios are less than 90 percent would effectively force insurers to achieve a high medical loss ratio. Combining this requirement with the other provisions of the PPACA would greatly restrict flexibility related to the sale and purchase of health insurance. In CBO’s view, this further expansion of the federal government’s role in the health insurance market would make such insurance an essentially governmental program, so that all payments related to health insurance policies should be recorded as cash flows in the federal budget.
The question of whether certain purchases of private health insurance “should be treated as part of the federal budget” is not insignificant. During President Clinton’s push to pass comprehensive health care reform, the CBO decided that “payments to and from the ‘health alliances’ should be included in the accounts of the federal government.” The decision artificially increased the bill’s score, dooming its chances in Congress.
Rockefeller argues that insurers that receive government subsidies should be required to spend those dollars on health care, not administrative overhead or profit. The 90% ratio replaced an existing provision that required insurers to maintain a medical loss ratio of 85%.
ARTICLE 5
Wendell Potter Says Franken Bill Will Go Far to Control Medical Costs
http://crooksandliars.com/susie-madrak/wendell-potter-says-franken-bill-will
By Susie Madrak Monday Dec 07, 2009 9:00am
Former CIGNA executive Wendell Potter says one of the most important things we can do to reform health care is to control the medical loss ratio - something Al Franken, Jay Rockefeller and other senators are attempting to do:
Wendell Potter Says Franken Bill Will Go Far to Control Medical Costs
http://crooksandliars.com/susie-madrak/wendell-potter-says-franken-bill-will
By Susie Madrak Monday Dec 07, 2009 9:00am
Former CIGNA executive Wendell Potter says one of the most important things we can do to reform health care is to control the medical loss ratio - something Al Franken, Jay Rockefeller and other senators are attempting to do:
Today, insurers only pay about 81 cents of each premium dollar on actual medical care. The rest is consumed by rising profits, grotesque executive salaries, huge administrative expenses, the cost of weeding out people with pre-existing conditions and claims review designed to wear out patients with denials and disapproval's of the care they need the most.
This equation is known as the medical loss ratio (MLR), an aptly named figure that is widely seen by investors as the most important gauge of an insurance company's current and future profitability. In a private health insurance industry that collected $817 billion this year, a 14 percentage point difference in the MLR represents $112 billion a year! Over 10 years, that would be more than enough to pay for health reform.
Thanks to the efforts of several senators who pushed for a minimum MLR to be included in reform legislation, the current Senate bill requires insurers to provide an annual rebate to each enrollee if non-claims costs exceed 20% in the group market and 25% in the individual market.
Sen. Al Franken (D-Minn.) is now leading a group including Sens. Jay Rockefeller (D-W. Va.) and Blanche Lincoln (D-Ark.) to introduce an amendment that would go further by requiring that 90 percent of the money consumers spend on health insurance premiums go directly to health care costs.
The senators are proposing a reform that strikes at the heart of a health insurance system that puts profits first, and it would have a profound effect. When MLRs increase, that eats into profits, and Wall Street becomes very unhappy. A case in point is Aetna, the nation's third largest publicly-traded health insurance plan. Three years ago, the company reported that its quarterly MLR had inched up from 77.9 percent to 79.4 percent in 12 months. On the day this was disclosed, Aetna's share price plunged 20 percent as investors sold off their shares, reducing the company's market value by billions of dollars.
Wall Street investors expect insurers to pay as little as possible for medical claims. As a result, the nation's health insurance industry has evolved into a cartel of huge for-profit companies that together reap billions of dollars a year at the expense of their policyholders. The seven largest firms -- UnitedHealth Group, WellPoint, Aetna, Humana, CIGNA, Health Net, and Coventry Health Care -- enroll nearly one in three Americans in their health insurance plans. This year the industry will take about $25 billion in profits for getting between American patients and their doctors, according to the industry's trade group.
And they do this by finding every excuse in the book not to pay a claim, even if it means canceling individual policies when people get sick or ridding their rolls of unprofitable small business group policies if an employee or family member falls seriously ill. They issue confusing benefit statements to members so only highly motivated and persistent challengers of their denials stand a chance of reversing an unfair decision. And in the final analysis, when an insurance company has decided it no longer can make enough profit on a particular person or employer-sponsored group, it drives them away in a process known as "purging."
In this unconscionable profit-protection maneuver, an insurer will hike premiums so high that the policyholder has no choice but to pay outlandish rates for what may be a reduced benefit package, find another insurer, or simply go without coverage. The consequences of such decisions can be deadly -- but Wall Street always has the last word when profits are the main consideration.
When Wall Street isn't calling the shots, the outcome is decidedly better for health care consumers. Government-operated plans, such as Medicare, and some organizations that provide coordinated care, consistently maintain higher medical loss ratios. Kaiser had a 90.6 percent MLR in 2007. Between 1993 and 2007, Medicare's MLR hasn't dropped below 97 percent.
The health care reform bill now being debated in the Senate must include a provision, such as that proposed by Sen. Franken, that sets a minimum medical loss ratio to keep insurers from gouging consumers and leaving patients without the care they need. Instead of being a formula to reward investors, a properly regulated medical loss ratio in combination with other cost containment measures in the legislation would be a reliable tool for keeping insurance company profits and administrative waste in check.
The health care reform bill now being debated in the Senate must include a provision, such as that proposed by Sen. Franken, that sets a minimum medical loss ratio to keep insurers from gouging consumers and leaving patients without the care they need. Instead of being a formula to reward investors, a properly regulated medical loss ratio in combination with other cost containment measures in the legislation would be a reliable tool for keeping insurance company profits and administrative waste in check.
Tags: al franken, CIGNA, health reform, Healthcare Reform, insurance company, Jay Rockefeller
Medical-Loss Ratio 3
Does A Higher Medical-Loss Ratio Reduce Insurer Profits?
http://wonkroom.thinkprogress.org/2009/11/16/medical-loss/
Over at Open Congress, Donny Shaw wonders why the House health bill doesn’t extend its requirement that insurers maintain an 85% medical-loss ratio once the Exchange becomes operative in 2013:
Once the bill is enacted, all health insurance plans would be required to spend at least 85 cents of every dollar paid in premiums each year to providing actual health care. If, in a given year, an insurer doesn’t spend that amount on health care, they would have to give their extra profit back to their customers in the form of rebates. [...]
But there’s a twist to all of this. The version of the bill that was passed by the House last weekend includes the provision, but also includes some curious, new “sunset” language. The sunset language states that the new minimum medical loss ratio requirements “shall not apply to health insurance coverage on and after the first date that health insurance coverage is offered through the Health Insurance Exchange.” In other words, in 2013, when most of the bill takes effect, the medical loss ratio language would be null and void. There would be no more profit control, just the market competition that is provided by whatever form of the public option is included in the bill.
“This really doesn’t make a whole lot of sense. What’s the point of including it in the legislation if it’s not going to apply once the bulk of the bill takes effect?,” Shaw asks.
Shaw’s concern is well taken, but a higher medical-loss ratio would not prevent private insurers from shifting a disproportionate amount of premium dollars into profits. It would do very little to improve care quality. If anything, plans could be encouraged to pay more for certain services (to meet the benchmark) and exclude certain benefits from coverage (benefits which would attract a sicker risk pool).
As James C. Robinson points out in this Health Affairs article, “High ratios can be achieved either through a large numerator (high medical expenditures) or through a small denominator (low insurance premiums).” In 2007, for instance, 6 of the 7 largest publicly-traded health insurers reported that their profits increased by 10%, while their medical loss ratios also went up. The same could happen after 2013. Once the Exchange is established, insurers will spend less on administrative expenses (reform will limit their ability to underwrite policies and the Exchange will streamline certain administrative tasks), and their medical-loss ratio will likely increase. This does not mean that they’re spending more money on patient care or shifting less towards profits.
Health reform should strongly encourage insurers to spend more premium dollars on financing quality health care, and less on administrative costs. The House legislation accomplishes that goal by prohibiting insurers from maximizing profits and denying coverage to Americans with pre-existing conditions. It establishes guaranteed issue and renewal rules, prohibits rescission, requires information transparency and plan disclosure, mandates plans to offer minimum benefits packages and eliminates cost sharing on preventive services. Still, more can be done. Policy makers may better achieve the goal of forcing insurers to spend premium dollars on health care by increasing the minimum actuarial value of health plans and only admitting insurers with high quality standards and low administrative overheads into the Exchange
Medical Loss Ratio 4
http://www.morningstar.com/1/3/80270-update-us-senate-democrats-seek-health-care-deal-tuesday.html
WASHINGTON -(Dow Jones)- U.S. Senate Democrats worked to forge agreement Tuesday on health-care overhaul legislation as they finalized major new provisions to the bill that would expand the Medicare and Medicaid programs.
A number of Democrats cited Tuesday as a critical day for the bill, as they seek to send legislation to the nonpartisan Congressional Budget Office in time to receive a cost estimate and schedule a final vote before Christmas.
"It's a day where a lot of things have to come together, if we hope to finish this in a reasonable time," said Senate Minority Whip Dick Durbin (D., Ill.).
Durbin cited the need to send the bill to the CBO and the lengthy amount of time it could take for the bill to overcome procedural hurdles in the Senate before a final vote, a process he said would take "a number of days."
The urgency comes as a group of 10 moderates and liberals assembled by Senate Majority Leader Harry Reid (D., Nev.) works to finish a compromise on key provisions in the bill by the end of the day. They are trying to come up with an agreement that will enjoy the support of at least 60 senators, the number needed to break a potential Republican filibuster of the bill.
The group of 10, which met Tuesday morning, is considering changes to the bill that would scale down its version of a public health insurance plan, allow those 55 and older to buy into the Medicare program and expand eligibility for the low-income Medicaid program.
"If we can come to agreement with people in this room, it doesn't mean we're home, but we've made a big step forward," said Sen. Charles Schumer (D., N.Y.).
But it's unclear if some key senators will be willing to support the compromise. Sen. Olympia Snowe (R., Maine), who is considered a swing vote on the bill, told reporters that she had "deep concerns" about the proposed changes to Medicare and Medicaid.
But Snowe said a proposal to scrap the bill's public plan and instead create an
alternative plan administered by the Office of Personnel Management and run by a nonprofit entity "makes sense" and is "an attractive option."
While senators had discussed expanding Medicaid eligibility to cover those with incomes at up to 150% of the federal poverty level, Schumer suggested Tuesday that "there are different things you can do on the Medicaid end of things" besides expanding eligibility.
The group is also discussing stiffer regulations on the health insurance industry as part of the compromise. Sens. Jay Rockefeller (D., W.Va.) and Ben Nelson (D., Neb.) are working together on a series of proposals that would include possible new restrictions on how companies spend money they raise from premiums.
Rockefeller said the group had discussed adding a provision stating that insurance companies would have to spend at least 90% of money raised from premiums on medical care, rather than devoting those funds to administrative costs or profits. The proportion is known in the insurance industry as "medical loss ratio."
"There have to be other ways to encourage discipline and self-restraint... and medical loss ratio is a very strong example," Rockefeller said.
Rockefeller said the medical loss ratio could be averaged over a three-year period in order to account for possible aberrations in a company's costs.
The Senate is set to vote Tuesday on an amendment offered by Nelson to the health overhaul bill that would put in place strict restriction intended to block federal funding for abortion in health plans offered by an insurance " exchange" created by the bill.
The amendment is modeled after a provision in the House-passed version of the bill that would bar the public health insurance option, as well as any health plans accepting enrollees that receive tax credits from the bill, from covering abortions.
The amendment is expected to fail. But Reid signalled Tuesday that further negotiations would take place with Nelson after the vote.
"If, in fact, he doesn't succeed here, we'll try something else," Reid said.
Sen. Bob Casey (D., Pa.), an anti-abortion Democrat who has co-sponsored Nelson's amendment, echoed Reid's comments.
"After this vote, no matter what the vote is, this discussion is going to continue," Casey said.
-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@ dowjones.com
Remember 2010, Vote the Bums Out
