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“forced to meet a Jan. 1 deadline that requires them to boost the money devoted to providing care. “

I think, the way I understand this, that this is backwards. Insurance companies are being forced to reduce their operating margins to 20%, which is a little different than being asked to adjust their payouts up to 80%.

“Beginning in 2012 If insurers don’t increase that loss ratio to 80 cents per dollar paid, they will have to give customers a rebate for the difference.”

Meanwhile, most charities aren’t even close to that figure.

This is probably based on some liberal/marxist professor’s theory about what a operating margin should be in utopia. The same liberal/marxist professor has never been outside the hallowed doors of academia; having never held a real job or much less run a business.

I seem to recall Rush having a woman call in to the show back when the obamacare debate was hot — she worked in the industry and she was all over this ratio business. She said it was designed to destroy small firms and served no other purpose. It would wipe them out and clear the field for the expansion of the Big insurance firms. She was furious and kept saying — “This is pretty obscure stuff: you can’t get people excited about this, but the people in Washington know exactly what they’re doing, and they will get away wth it.”

CHECK: Health insurers’ profits 35th of 53

http://news.yahoo.com/s/ap/20091026/ap_on_bi_ge/us_fact_check_health_insurance

WASHINGTON – In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making “immoral” and “obscene” returns while “the bodies pile up.”

But in pillorying insurers over profits, the critics are on shaky ground. Ledgers tell a different reality.

Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

more at news.yahoo.com ...

Insurers have lost 2.2% over last year.
On the other hand, the federal government is going to spend 12.4% more next year than this year. good times...