HR3200, what is really in it?
With Television and RW blogs and a few Republican Senators and Representatives raising all getout over issues that are not actually in HR3200, I thought I might bring up an issue that actually is in the bill as written.
Pages 350 and 351 discuss "Medical Loss Ratio" requirements. As I read it, each plan offered is required to spend 85% of its premiums on healthcare which are "medical losses". If a plan has "medical losses" of less than 85% the difference is to be rebated to the enrollees. This allows 15% for overhead and profit.
To not fall below the 85% the plan would probably have to try to achieve 87-90%, in case they have a good (low medical cost) year.
There is no way for the insurer to recover exceptional "medical loss" losses in the event of an exceptionally bad year, that I have read, unless it is somewhere else in the bill. A very special thanks goes out from me to Senator Waxman for leaving me in the position of defending an insurers concern.
But that ends now.
This is a plan similar to what is used to allow controll utilities from gouging customers who are stuck with only one wire into the house and no real options.
To increase profits, insurers simply have to raise the amounts they pay providers. The percentage will stay the same but the dollar value will increase. So instead of having insurers try to cut amounts paid to providers, the insurer would be better served by increasing amounts paid to providers effectively driving healthcare costs upward and then being able to justify higher premiums. The insurer would incure no additional costs in their overhead, but still earns more money.
In HR676, the bill I prefer, the problem would be having the Single Payers (gov't) administrators, deciding what Doctors should be paid for each treatment and possibly losing financial sanity. Historically Doctors have been against Gov't Single Payer because of the fear that Gov't will underpay them.
In HR3200, Doctors still have the choice of not accepting plans they do not want to participate in.
In HR676 there would not be a choice of opting out for Doctors, only an appeal process to increase the payout for any procedure.
In HR3200 the insurers are almost guaranteed to try to encourage Doctors to increase the fees, as it profits the insurer also. That is why insurers live. I doubt Governments ability to keep that under control.
I think a more equitable balance would be achieved by HR676 without administrators having to resist insurers and Doctors pulling in the same upward cost direction. Doctors are not leaving other Gov't run countries in droves, so a reasonable balance is achievable, even if perfection is elusive.
Either is preferable to business as usual with insurers gouging Doctors and Enrollees.
The free market solution of hoping there will be Doctors with 7 years of school able to work cheaply enough to provide healthcare to stock clerks is unlikely and exists nowhere in the world. There would be Doctors for the wealthy and not for anyone else, just like every other country in the world without universal coverage laws.
Here is the text I referred to from the bill.
23 ‘‘(B) CONSULTATION.—The Secretary
24 shall consult with the Health Choices Commis25
sioner, representatives of MA organizations, ex-
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1 perts on health plan accounting systems, and
2 representatives of the National Association of
3 Insurance Commissioners, in the development
4 of such data elements and definitions.
5 ‘‘(4) MEDICAL LOSS RATIO TO BE DEFINED.—
6 For purposes of this part, the term ‘medical loss
7 ratio’ has the meaning given such term by the Sec
8 retary, taking into account the meaning given such
9 term by the Health Choices Commissioner under
10 section 116 of the America’s Affordable Health
11 Choices Act of 2009.’’.
12 (b) MINIMUM MEDICAL LOSS RATIO.—Section
13 1857(e) of the Social Security Act (42 U.S.C. 1395w–
14 27(e)) is amended by adding at the end the following new
16 ‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL
17 LOSS RATIO.—If the Secretary determines for a con18
tract year (beginning with 2014) that an MA plan
19 has failed to have a medical loss ratio (as defined in
20 section 1851(p)(4)) of at least .85—
21 ‘‘(A) the Secretary shall require the Medi
22 care Advantage organization offering the plan
23 to give enrollees a rebate (in the second suc24
ceeding contract year) of premiums under this
25 part (or part B or part D, if applicable) by
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1 such amount as would provide for a benefits
2 ratio of at least .85;
3 ‘‘(B) for 3 consecutive contract years, the
4 Secretary shall not permit the enrollment of
5 new enrollees under the plan for coverage dur6
ing the second succeeding contract year; and
7 ‘‘(C) the Secretary shall terminate the plan
8 contract if the plan fails to have such a medical
9 loss ratio for 5 consecutive contract years.’’.