Obamacare Will Prevent Insurance Companies From Investigating Fraud
Earlier today I posted about state insurance commissioners agreeing to new Obamacare regulations that would require that insurance companies spend 80 – 85% of their income from premiums on medical care. What the insurance commissioners agreed on was what does and does not constitute spending on clinical sservices.
Now what the insurance commissioners agreed to still needs to be approved by Secretary of Health Katherine Sebelius, but if their recommendations are accepted it could mean that insurance companies will be hamstringed when it comes to investigating and stopping insurance fraud. Because one of the biggest areas of insurance company spending is fraud prevention, and the insurance commissioners decided that fraud prevention won’t be classified as spending on clinical services thus qualifying as part of the 85% mandate.
Meaning that under these regulations, insurances companies would have to pay for fraud investigation out of the 15% of income they’re not required to spend on medical claims.
Obviously, that’s going to put a serious crimp in the ability of insurance companies to stop fraud. And more fraud means more cost. More cost means higher premiums.
What’s more, these insurance commissioners also decided that insurance companies must apply the 85% mandate to each premium individually. Meaning that 85% of the premiums on each individual policy must be spent on medical services, not 85% of all premiums collected.
This gives insurance companies less latitude in complying with the mandate, and will ultimately mean few types of insurance plans offered.
Once again, we learn that Obamacare is less about making private insurance better than destroying private insurance entirely.Tags: health insurance, katherine sebelius, obamacare