Obama Administration Requires Insurers To Credit Obamacare When Issuing Rebates
You can’t make this stuff up:
Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of the Obama administration’s health-care law, according to federal guidelines released Friday.
The move is the latest sign the Obama administration is trying to draw attention to the law’s benefits before the fall elections, even though the law faces an uncertain future. The Supreme Court is expected to decide in June whether its central plank-a mandate that everyone carry insurance-violates the Constitution. Mitt Romney, the presumed Republican presidential nominee, has pledged to wipe out the law if elected.
Under the 2010 legislation, insurers that don’t spend a specified amount of revenue on actual medical care — as opposed to administrative costs — must refund the difference to customers. The nonpartisan Kaiser Family Foundation has projected refunds would total about $1.3 billion and go to roughly 16 million people who buy their own policies or get them through an employer.
Kaiser estimates checks would range from an average of $72 for those with insurance through a large employer to an average of $127 for those who bought individual policies.
Just to sum up, the Obama administration is requiring that these insurance companies all but put the President’s name on checks they send out to the insured.
Talk about vote buying. With other people’s money, no less.
Regardless, it’s not at all clear that the policy resulting in these rebates will be helpful for health care costs long-term. Before Obamacare made this ratio of administrative costs to medical costs national law dozens of other states had implemented the same policy. The result in those states was higher overall premiums:
Prior to ObamaCare, 34 states had some sort of MLR rule in place. But they didn’t contain health spending or improve care. According to a 2009 American Academy of Actuaries report, “minimum loss ratios do not help contain health care spending growth…or address directly the quality and efficiency of health care services.” If anything, MLR rules create an incentive for insurers to increase premiums by limiting the amount of money that can be spent on administrative costs and profits to a percentage of the total premium: Want more money to spend on administrative expenses? Higher premiums are the only way to go. Insurance rate review—essentially an explicit form of price controls—mostly served to make a mess of the Massachusetts insurance market when the state rejected 90 percent of proposed hikes in 2010.
Obama wants credit for these rebates now, but can we also put his name on the inevitable premium hikes? Note that the Kaiser Foundation has already recorded a big spike in family health insurance premiums after the first full year of Obamacare implementation.
Tags: Barack Obama, health insurance, obamacare
