tag:blogger.com,1999:blog-8573839334358190868.post5188334973585818837..comments2024-03-17T15:24:09.100-04:00Comments on The Apothecary: Obamacare's January Insurance Time BombAvik Royhttp://www.blogger.com/profile/17800177830841080188noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-8573839334358190868.post-61310911887647190862022-12-29T17:49:01.357-05:002022-12-29T17:49:01.357-05:00I know what will help against a lot of papers and ...I know what will help against a lot of papers and you will have a very beautifully written essay, if you order on this site <a href="https://www.clevescene.com/sponsored/the-best-essay-writing-service-2022-independent-review-39279903" rel="nofollow">www.clevescene.com/sponsored/the-best-essay-writing-service-2022-independent-review-39279903</a> you will find your assistant, the best essay writing service 2022, an independent reviewwhome2249https://www.blogger.com/profile/17111320205424043832noreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-40004060828836374032010-09-29T17:45:38.228-04:002010-09-29T17:45:38.228-04:00Hi Anonymous,
I think you meant to post this upon...Hi Anonymous,<br /><br />I think you meant to post this upon my more recent post (The MLR Tornado).<br /><br />As to your core argument: I certainly respect your expertise. But think of the math. An insurer has more money available for administrative costs, under this new regime, if medical losses are higher. Hence, insurers have little incentive to crack down on unnecessary medical costs.<br /><br />Also remember that there is wide variation on a plan-by-plan basis on MLRs. This will lead many insurers to exit the markets where their plans are not sufficiently established.<br /><br />I agree with you as to how HSAs *should* be accounted for.Avik Royhttps://www.blogger.com/profile/17800177830841080188noreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-55754546962796627062010-09-29T15:15:54.460-04:002010-09-29T15:15:54.460-04:00Hi Avik:
What you say is not true. Your definiti...Hi Avik:<br /><br />What you say is not true. Your definition of MLR is correct. Amount spent for medical expenses of beneficaries divided by the premium collected - both by the insurance company. This amount spent does not include HSA. HSA is not established by insurance company but either by the beneficiary or beneficiare's employer. Further, the amount spent on medical expenses from HSA is not spent or expensed by the insurance comany and hence is not a part of MLR calculation. <br /><br />HSA will not become illegal since they contribute towards insurance's heath cost. They infact prevent overutilization of services, restrict the expense of insurance costs to high cost items such as speciality drugs and hospitalization costs, theyeby controlling overall cost behavior from the beneficiaries.<br /><br />Customer services, fighting and preventing farud and abuse etc are administrative costs not medical costs and are expected to be expensed from administrative budgets. IN fact, by mandating 80% and 85% MLRs, the ObamaCare has made sure that those costs are indeed reserved for beneficiaries. Either the insurance company will design benefits to pay for the costs and if they do not, they'll save money in year 1 only to have their premiums reduced in year 2 so that they meeet 805 and 85% cost structures. Either the beneficiaries will be benefited or the overall costs will come down. Either way it is a win for the society as a whole. Then remianing 20% and 15% is attributed to administrative expenses for customer services, preventing fraud etc. Because of the regulatory structure of the insurance business, the companies will be forced to spend moneys to meet those requirements as well and then pay staff and make a buck. Making a buck is not bad - that is the American way. large companies with 85% requirements for MLR will still have more dollars to share the administrative burden. <br /><br />lastly, I do not see this as a bacd thing under Obamacare. If NAIC is to draft the rules and rules have some negative effects - cannot be blamed on Obamacare.<br /><br />I know this since I am the CFO for an insurance comoany and deal with these issues every dayAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-63272302797214123352010-05-08T23:28:48.995-04:002010-05-08T23:28:48.995-04:00Hi Jon, you're on to something.
Prior to Obam...Hi Jon, you're on to something.<br /><br />Prior to Obamacare, Internal Revenue Code Section 833 allowed for certain non-profit Blue Cross Blue Shield organizations and similar entities to deduct 25% of claims and expenses, and 100% of "unearned premium reserves" (what insurers are paid in advance for coverage that has not yet fully played out). <br /><br />PPACA section 9016 eliminates these deductions for plans that don't have MLRs above 85%. Many, if not most, plans do not meet this threshold. In addition, elimination of the deduction for unearned reserves disproportionately affects new entrants who are enrolling new policyholders and gaining market share. Therefore, as you suggest, this may also lead insurers to exit states where they are not well-established, further encouraging the creation of intrastate insurance monopolies.<br /><br />Also, Section 1103 requires Medicare Advantage plans to hit an MLR target of 85%, but since Medicare Advantage is already being effectively wiped out by the elimination of federal subsidies for the program.Avik Royhttps://www.blogger.com/profile/17800177830841080188noreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-10629022621040900802010-05-07T21:05:14.888-04:002010-05-07T21:05:14.888-04:00Hi Avik,
There's another little ticking time ...Hi Avik,<br /><br />There's another little ticking time bomb in there. Section 9016 (if I read it right) requires that certain (i.e. non-Inventor owned) Blues hit an 85% MLR to retain their section 833 (from the code) THIS YEAR to retain their tax status. I would expect that to be a tough number to hit.<br /><br />http://www.healthreform.gov/newsroom/section2718.htmlJonhttps://www.blogger.com/profile/09957853287661654364noreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-15347705783358773092010-05-07T16:08:48.096-04:002010-05-07T16:08:48.096-04:00Anonymous, this is really the key thing that peopl...Anonymous, this is really the key thing that people misunderstand: the profit motive gives insurers an incentive to keep costs down (because they make more money if costs are low). They pass on some of these savings to consumers, in the form of lower premiums. <br /><br />If insurers don't have any economic incentive to work to keep costs down, they'll just let hospitals and doctors charge whatever they want, make their fixed MLR-based profit, and move on.Avik Royhttps://www.blogger.com/profile/17800177830841080188noreply@blogger.comtag:blogger.com,1999:blog-8573839334358190868.post-22721850911303525212010-05-07T15:57:45.130-04:002010-05-07T15:57:45.130-04:00Will this also reduce plans' efforts to reduce...Will this also reduce plans' efforts to reduce medical costs (by keeping medical costs high, they can maintain higher MLRs, etc.)?Anonymousnoreply@blogger.com