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How Health Plan Choices Will Dwindle
IBD Editorials ^ | September 21, 2010 | STEVE KRUPA

Posted on 09/21/2010 4:57:21 PM PDT by Kaslin

Sen. Max Baucus recently admitted that he never read the ObamaCare legislation. But that hasn't stopped him from trying to re-write it after the fact, asserting that Congress intended to give people even less choice of private health plans than described in the bill!

This overreach should encourage states that are trying to block ObamaCare: It's going to be even worse than we initially thought.

ObamaCare reduces choice of health plans by giving government the power to control the Medical Loss Ratio (MLR) — the dollars an insurer spends on medical care divided by the total premiums. Under ObamaCare, policies that cover large businesses will have to achieve an MLR of 85%, while those for small businesses and individuals will have to achieve an MLR of 80%. This sounds simple but leaves many issues unresolved.

An important one is the treatment of taxes: Taxes are not medical care, but nor are they under health plans' control. So, ObamaCare excludes taxes from total costs used to calculate the MLR. Baucus leads a group of senators who now assert that what they meant to pass was a bill that exempted some taxes from health plans' MLR calculations, but not corporate income taxes.

If it prevails, Baucus' flawed notion will lead to an immediate reduction of choice of health plans. Suppose two insurers of the same size compete in a region's large-group market. They earn premiums of $1 million each. They each spend $850,000 on medical claims, thereby achieving an MLR of 85%.

One insurer is for-profit, earning a profit of 4% ($40,000), and pays combined federal and state corporate income tax of 45% ($18,000). Its MLR automatically shrinks to 83.5%, and ObamaCare shuts it down.

(Excerpt) Read more at investors.com ...


TOPICS: Culture/Society; Editorial
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1 posted on 09/21/2010 4:57:22 PM PDT by Kaslin
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To: Kaslin

ROFL, unintended consequences. These Sin-ators are dumber than rocks.


2 posted on 09/21/2010 5:03:48 PM PDT by VRWC For Truth (Throw the bums out who vote yes on the bail out)
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To: Kaslin

Let me get this straight. We're going to be "gifted" with a health care plan we are forced to purchase and fined if we don't, written by a committee whose chairman says he doesn't understand it, passed by a Congress that hasn't read it but exempts themselves from it, to be signed by a president who smokes, with funding administered by a treasury chief who didn't pay his taxes, to be overseen by a surgeon general who is obese, and financed by a country that's broke; administrated by people who want to emulate the worst aspects of socialized medicine programs in other countries (e.g. rationing and death panels)

What the hell could possibly go wrong?

3 posted on 09/21/2010 5:22:11 PM PDT by GailA (obamacare paid for by cuts & taxes on most vulnerable Veterans, retired Military, disabled & Seniors)
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To: VRWC For Truth
Don't be naive. Nothing unintended about it.
4 posted on 09/21/2010 5:31:30 PM PDT by hinckley buzzard
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To: Kaslin

When can we get an “acceptable loss ratio” on gummint funded “charities”? Last I heard only about 58% of every dollar that goes into Medicare or any other “gummint charity” ends up at the “user”. None of us would donate to such a “charity”. In fact the same Fed gummint would prosecute a “charity” run so poorly.


5 posted on 09/22/2010 4:06:00 AM PDT by wastoute (Government cannot redistribute wealth. Government can only redistribute poverty.)
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