Health insurance premiums should go for actual medical care -- not insurers' overhead and profits -- the Obama administration said Monday in rules that for the first time require the companies to give consumers a rebate.
The regulation unveiled by the Health and Human Services Department calls for insurance companies to spend at least 80 cents of the premium dollar on medical care and quality. For employer plans covering more than 50 people, the requirement is 85 cents. Insurers that fall short of the mark will have to issue their customers a rebate.
Part of the new health care law, the rule is meant to give consumers a better deal. Administration officials said it will prevent insurers from wasting valuable premiums on administration, marketing and executive bonuses. "While some level of overhead costs is certainly necessary, we believe they have gotten out of hand," said Health and Human Services Secretary Kathleen Sebelius.
Some lefties will ask me why I would disagree with such a rule. What I think of the rule is irrelevant; what's relevant is the further injection of the federal government into the marketplace, and the power we allow the federal government to usurp from the states and the people (see the 9th and 10th Amendments). I fear the federal government with its firearms and prisons much more than I fear an insurance company.
Here's a perfect example of why pricing for healthcare will skyrocket. Due to current insurance policies, each individual provider must be vetted and paid as a separate entity. This means that when my son went into have his messed up knee evaluated, the office never told him that the radiologist, the radiology center, the doctor, the therapist and the separate surgery center would be billing him. He asked for a sum total because he's on a tight budget. They estimated and then never contacted him. So today when he went in for the followup, they presented him with yet another $600 bill. He doesn't make that much extra that this is easily done. And that is what will happen at every level of the healthcare industry from nursing to surgery with Obamacare because such bureaucracy demands documentation at every incremental level. This is why such draconian actions never bring costs down. Have HMO's reduced the cost of medical care for anyone? Try getting a procedure that isn't covered by the policy or that requires out of network services and see what the real cost of medical care can be.
what an absolutely asinine rule . . . now that people are forced to buy insurance, the market is captive. Want more money for overhead, administration, and ceos? Just raise premiums AND the price of procedures, and you're good -- you only get 20%, BUT you get 20% of a bigger number. Only the consumer loses. It took me approximately 20 seconds to spot the loophole . . .
There can be no solution without involving competitive markets. I still maintain that healthcare does need some help and oversight from the government because of its peculiar nature, but price setting NEVER works, in any form.
For the insurance companies to continue to make the same "dollar profit" AND comply with this "new" rule, that 85% be spent on actual health care, the insurance rate would have to be raised substantially.
15% of several billion bucks premium increases is still a pretty sizable chunk of cash to replace what government mandates take away.
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