Will ObamaCare's Rules Put Some Health Insurers Out of Businesses?


This week, the National Association of Insurance Commissioners is meeting in Orlando. One item on their agenda: making a recommendation about how health insurance regulators should calculate the mandatory medical loss ratios in the new health care law. As CNN notes, the insurance industry is "on edge," with many plans worried that the new rules will force a shut down:

Industry experts say more insurers will drop health care coverage or go out of business if they are forced to meet a Jan. 1 deadline that requires them to boost the money devoted to providing care.

The Obama administration is awaiting the recommendation of the National Association of Insurance Commissioners, meeting in Orlando this week, for how and when to implement key changes to the "Medical Loss Ratio" rule.
Under health reform, beginning 2011, insurance companies will have to spend 80% to 85% of the premiums they collect on care instead of toward their own profits and overhead costs.

Prior to reform, requirements varied from state to state. In some cases, insurers didn't have to meet any minimum requirements.

A few months ago, the Congressional Budget Office warned that if the MLR requirements were set any higher, they would be "likely to substantially reduce flexibility in terms of the types, prices, and number of private sellers of health insurance." Looks like that may happen anyway.

More on medical loss ratios here, here, and here.

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  1. Wahhh! That’s all I hear. You thought selling out to the man would keep you safe? Ha! You just helped them tighten the noose around your neck.

    1. No, sounds like the ones who sold out are getting exactly what they want. FTFA:

      “It’s survival of the fittest,” she said. “Big carriers can meet the new rule.”

      1. Big carriers can also be taken over by Uncle Sugar. See also GM, various banks, etc.

        1. When they were about to go bankrupt. So again, seems like they won.

          1. They won = we lost.

            1. In any compromise with evil, evil always profits.


              1. “When you dance with the devil, the devil don’t change.”

    2. Why would any reasonable consumer object to requiring that insurers spend 80% of health insurance premiums on health care? Any company that would be run out of business by that mandate clearly isn’t in the health insurance business anyway. Perhaps, investment banking or advertising would be a more suitable line of business for such firms.

      1. I’d think that simply requiring them to pay for covered services would suffice; in other words, simply enforce the contract between insurer and insured.

      2. And no reasonable consumer could object to requiring that bars spend 80% of their revenue on liquor and mixers. Any bar that would be run out of business by that mandate clearly isn’t in the drink-serving business anyway.

        1. Neither dram shops, bars, nor any other retail vendors of commodities are like health care insurance companies.

           In addition to a wide margin between the cost and price of the drinks served, a bar may exact a premium for its ambience, clientele, food etc. In contrast, health insurance companies, as mechanisms  for financing health care, have only two means of deriving surplus value, profits:

          (1) return on investment of idle premiums; and
          (2)  rationing health care expenditures?on some basis. 

          Inherently, both involve significant potential conflicts of interest.  Nevertheless, if people were angels, no need would exist for limiting the proportion of health care premiums spent for purposes other than financing health care.  But people are not angels. Some line must be drawn.

          If requiring that health care premium dollars be 80% efficient?that 80% be applied to financing health care, is unreasonable, how much more than 20 cent from every  health care premium dollar should consumers expect to pay for the function insurance companies perform?

      3. You do realize that health insurer profit margins average about 5% right?

      4. Oh, and it’s not the amount of the requirement we find objectionable, it’s the requirement itself. Let that sink in for a while.

      5. It’s not that simple. The other 20%? It doesn’t cover just the inflated bonuses of the execs. It covers PPO expenses, claim recoveries, underwriting expenses, utilities – everything necessary to make the business work. I know; I’m a recent casualty of the industry so that my prior company can meet the 80% MLR.

  2. I hope a shit ton of companies go out of business and it is a direct result of Obama’s policies. They’ll start keeping a jobs lost-eliminated calculation instead of a saved-created calculation. Fucking assholes.

    1. “They’ll start keeping a jobs lost-eliminated calculation instead of a saved-created calculation.”

      No they won’t. They’ll say that they didn’t do enough quickly enough and that the Repubs got in the way of stimulus and that they need more power to act fast and blah blah. But they’ll still claim that they saved or created whatever number of jobs sounds good to them.

  3. as mentioned many times before, this was designed as a feature, not a bug. Only problem is they don’t have the public option now to push everyone into that doesnt have private insurance anymore.

  4. Hopefully.

    1. Please don’t be his porn.

    2. Hee haw! Hee haw! Heehaw! Heehaw! Hee! Hee!

  5. Big carriers can also be taken over by Uncle Sugar.

    Large companies want to be nationalized?de facto, at least.

    Iron law.

  6. If the rules don’t the economics will.

  7. You know what this reminds me of? Bush era torture/enemy combatant policy…

    Making the blatant stupidity that was the Bush/Rumsfeld/Chaney/Gonzo nexus seem smart somehow? That was for the career military people in the Pentagon to figure out…

    The rest of us were supposed to do our patriotic duty and pretend what the Bush Administration was doing was smart–even as they were forced to release terrorists for lack of evidence, terrorists that would still be in prison if only they’d been classified as POWs. …even as we lost support in the wake of Abu Ghraib, we were all supposed to pretend that what the president and his staff were doing was smart.

    This has the same vibe all over it. Now, somehow, the insurance industry is supposed to make chicken salad out of Obama’s steaming pile? Somehow we’re all supposed to think those who are voting in the hope of repealing ObamaCare in a couple of weeks are just a bunch of uninformed neanderthals?

    ObamaCare is indefensible. Is there anyone out there not connected to the Obama Administration still trying to defend it?

    1. Wait until you see how torture and Obamacare will be connected.

    2. I’ll toss that salad!

  8. Yes, PPACA was designed to start us down a particular path, the end of which has all private insurers out of business.

    1. Yay! I’m going to go suck Satan’s cock some more now.

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  10. And when private insurance companies go out of business as a result of this regulation, the refrain will be “The free market failed again!”

    Then all decisions regarding your health care will be made by government drones who can, by their first week on the job, tell you how many days until they get their pension.


    1. If the American economy ever fully became a centrally planned one, I would still expect to hear people blaming the free market(or free market devotees) for all the planning failures. In the same way that psychics blame his bad guesses on the sitter because he was blocking the spirits with his negativity.

      1. Actually, that was done a few weeks ago:


      2. Yup.

        The free market is about choice, so the free market is blamed when people make the “wrong” choice. It is up to the central planners to remove as many choices as possible to protect people from making the “wrong” ones. Choices forced upon us by enlightened central planners are never wrong, they went to Ivy League schools for Marx’s sake! Only choices made by silly free marketers are wrong.

        Then we will truly be free. Free from choice, free from responsibility, free from consequence, and free to pursue the higher things in life.

        It worked in Soviet Russia, Cuba, Eastern Europe and North Korea.
        There’s no reason to think it won’t work here.

        1. Planning worked in postwar Great Britain, Fascist Italy, and Nazi Germany, too.

      3. “In the same way that psychics blame his bad guesses on the sitter because he was blocking the spirits with his negativity.”

        Like the way drunk drivers blame the laws of physics for killing the children they ran into.

  11. if the MLR requirements were set any higher, they would be “likely to substantially reduce flexibility in terms of the types, prices, and number of private sellers of health insurance.”

    I. Fucking. Warned you not to say that!

    Oh, CBO? Never mind.

    1. You’re not really Kathleen Sebelius.

  12. … One item on their agenda: making a recommendation about how health insurance regulators should calculate the mandatory medical loss ratios in the new health care law.

    Another agenda item: sacrificing babies to their Dark Lord and Master. Think I read that first on Huffington Post.

    1. Bebbies? Ah aeat bebbies! Get in my belly!

  13. Let’s do a little analysis. Let’s see, if we put *all* health insurance companies out of business, then nobody will have health insurance. Everybody will have to pay for their care out of pocket, and thus they will know what the prices are. Since they will also *care* about prices, they will shop around for better bang for the buck, thus improving the market for us all overall.

    Maybe Obama really will save health care!

  14. Whatever the truth of the matter, the American people need to know how he managed to become a “natural born” American citizen between 1981 and 2008..

    Given the destructive nature of his plans for America, as illustrated by his speech before Congress and the disastrous spending plan he has presented to Congress, the sooner we learn the truth of all this, the better.

    If you Don’t care that Your President is not a natural born Citizen and in Violation of the Constitution, then Delete this, and then lower your American Flag to half-staff, because the U.S. Constitution is already on life-support, and won’t survive much longer.

    If you do care then Forward this to as many patriotic Americans as you can, because our country is being looted and ransacked! TO THE WEAK-KNEED REPUBLICANS AND DEMOCRAT?..TO ALL THE COMMUNIST IN THE IG,FBI,CIA,AND U.S. Senators and the left wing media outlets?..Wake up america!!!! This goverment is the most corrupt we have had in years. The good old boy network is very much in charge.Mr. obama and pelosi are the puppet masters.How many of their good friends benefited by the agreement ” what a farce. All of the u.sSenators voted for this. I am ashamed to say I voted for the these corupted self serving politicians.With good reason they picked an out of towner to be president.All u.s departments need an overhaul. We need to rid ourselves of the puppet masters and the dept heads that bow down to obama and pelosi.I am sick of the lip service I have been getting from these dummies over violations, their friends are getting away with.in the goverment . Barack Hussein Obama , threatens friends and bows to Mmslim.
    INPEACH OBAMA ,GOD OPEN YOUR EYES.///For us there are only two possiblities: either we remain american or we come under the thumb of the communist Mmslim Barack Hussein OBAMA. This latter must not occur.THE COMMANDER.
    OBAMA goes about his business by speaking the lie. II Thessalonians 2 says that he comes “with all deceivableness of unrighteousness.” Revelation 13:12 says, “and he spoke as a dragon….” Revelation 17 tells us that he was a false prophet, a prophet being one whose calling it is to speak and to teach. The armies of the world may have guns and tanks and bombs to bring people into submission; but the power of speech and ideas is a mighty power. In his initial attempts to destroy the cause of God Obama used a serpent to deceive the woman with crooked speech: “You will be like God.” Now he uses a “dragon” who speaks crafty, lying words. His speeches will be heard by millions who will hang on his persuasive rhetoric. The content as well as the form of his speech will attract. Like most false prophets, he will even be sincere and passionate. But he is a liar. He adds dashes of truth to the mix, so that his lie tastes like truth. He will use all the right catchwords, using the language of the church, even throwing in a Bible text or two. But he is the ultimate Liar, and will deceive many.
    OBAMA will use every tool available: school teachers, politicians, news broadcasters, artists, musicians, scientists and doctors, lawyers and businessmen. All will be pressed into the service of OBAMA to deceive men. But especially he will use those whose calling it is to persuade and to teach — men who claim to be preachers of the gospel of Jesus Christ. ===================Both communists and National Socialists prospered in this climate in which the common people powerfully rejected the whole concept of a liberal democracy.
    In the 2009 election campaign obama put himself forward as the strong and decisive leader which america had been longing for. As many have commented, all the Party really offered was order, discipline and authority since they had not drawn up any detailed policies ?quot; however, it was indeed the order, discipline and authority which the america were longing and craving for! Moreover the party made it clear that, when elected, they would form a dictatorship ?quot; not a democracy, but this, again, was exactly what the people wanted

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