Maggie's Farm

For over twenty years, I’ve been a scrupulous, multi-credentialed independent health care consultant and broker. I and others who actually know anything from the experienced, practical and studied perspective have warned that the medical loss ratios built into ObamaCare are dangerous to the quality and costs of medical insurance.

Medical loss ratio measures the percentage of premiums paid out in claims and for quality improvement. Just paying out more on claims does not reduce costs nor improve quality. Duh!

I wrote about this last April, that the CBO (Congressional Budget Office) said that ObamaCare’s medical loss ratios were within 5% of nationalizing the health insurance industry, so the Congressional Democrats who rammed ObamaCare through kept the medical loss ratios just below the 90% at which the multi-trillion dollar costs of outright nationalization would have to be counted by the CBO. What we got is a sham, nationalization masquerading – bad enough – as a highly regulated utility.

The CBO and the American Academy of Actuaries both pointed out that medical loss ratios are both misleading and can easily be contradictory to restraining costs or improving quality. This is particularly so when the formula is drawn too narrowly or ignorantly. Politicians' soundbites and regulator rampagers fit those categories of malpractice.

The largest insurance companies were at least half-way in bed with ObamaCare, looking to their own preservation, but now both they and brokers and the public are impregnated with a problem baby.

As during the HillaryCare debates, health care consultants and brokers are in the lead in trying to get sense into the examining room. We are virtually the only organized groups really fighting to keep government quackery away from your health. Sure, our already low commissions are in play, but so is your ability to have knowledgeable, independent guidance through the thickets of medical insurance and coverage.

The Council of Insurance Agents and Brokers, the Independent Insurance Agents and Brokers of America, the National Association of Health Underwriters, and the National Association of Insurance and Financial Advisors  have joined to plead to state insurance commissioners and medical insurance companies:

But “we fear the adoption of a narrow and static definition will adversely impact spending on certain important health plan activities,” the groups say.

In many cases, moves to reduce costs improve quality, and moves to improve quality reduce costs, the groups say.

“The definition of ‘activities that improve health care quality’ should be crafted in a way that recognizes this,” the groups say.

Activities now shut out of the definition include utilization review, fraud prevention activities, and network management, and those activities “are essential to maintaining and improving the quality of health care that clients of our members receive on a daily basis,” the producer groups say.

“Our members know firsthand that less utilization review, fraud prevention, and network development means lower quality health care for their clients – in addition to higher costs,” the groups say.

But, hey, ObamaCare is not really about reducing costs or improving quality; it’s primarily about grossly enlarging government and its control of the economy and our lives.

If you care to weigh in on drawing the formula for medical loss ratios in ObamaCare to be more reasonable, you can write to Ethan Sonnichsen, the National Association of Insurance Commissioners (the umbrella for the states' insurance commissioners) Director of Government Relations at his email  esonnich@naic.org .

Oh Yeah: This Mass. pre-experience of ObamaCare should help increase the medical loss ratio, pay large claims for those who dip in to coverage then stop paying premiums.

The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.

The result is that insured residents of Massachusetts wind up paying more for health care, according to the report. …