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Wednesday, February 8, 2012

Real Insurance Could Never Operate with An 85% Loss Rate

By Filed under New Health Care Law on February 7, 2012

This is another interesting article by John Graham.  I think it says a lot about how we are looking at the Insurance companies.  Has you can see in this first couple of paragraphs.  I think if you read the complete article, you will get a better idea why setting arbitary regulations is never a good idea.

 ObamaCare demands that most health plans operate with a medical loss ratio (MLR) of 85 percent (or 80 percent for the individual market). This blog has noted that this regulation is arbitrary, meaningless, and will surely have negative unintended consequences. One of the nation’s top experts on Health Savings Accounts has analyzed these MLR rules and concluded that it will be next to impossible to offer consumer-driven plans under them.

Politicians, bureaucrats, and people in general are very fixated on how much of our premiums go to administrative costs, including executive salaries and profits, of health plans. It’s easy to understand a politician winning applause for promising that she’ll ensure health plans spend more of their revenue on patient care.

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