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I haven't heard much about this profit control mechancism lately, so I thought I'd add it to the ACA Rollout mix. To me anyways, it seems the one thing destined to make the ACA a popular "affordable" program, in the long run.


The Obamacare provision that terrifies insurers

by Sarah Kliff, washingtonpost.com -- July 18, 2013

President Obama is set to speak this morning about how the health-care law is cutting premiums for millions of Americans. His remarks will focus on a small Affordable Care Act provision known to health wonks as the "medical loss ratio." Rolls right off the tongue, right?

Maybe not. But the medical loss ratio (described as the "80/20 rule" by the White House) is arguably one of the most effective tools the White House has to hold down premium costs. And it's the provision that the White House is homing in on, in arguing that the health-care law will make health care cheaper for American families.

The medical loss ratio is a term that comes from the health insurance industry. It's literally meant to describe how much money insurance plans lose by providing medical care to their subscribers. [...]

Enter the Affordable Care Act. The federal law, starting in 2011, began requiring all plans to spend at least 80 percent of subscriber premium dollars on medical care and related "quality improvement activities" (more on that bit in a moment). That leaves 20 percent of premiums for the health plan to cover administrative costs and return to investors in profits.
[...]


In other words, Insurance Company NOW have a limit under the ACA, when it comes to leveraging our Health Care Dollar$ to their own personal benefit. Under the old system there was no limit -- it simply was Insurance buyer Beware, as many of us had to learn the hard way.  (Remember the era of "Medical Bankruptcies" anyone?)


One of the 'funnest' ACA Benefit to mention in ACA Rollout discussions, is this one:

The Cap on Insurance Company Profit$ at 20% (to be ratcheted down to 15% eventually).

The previous system had no limit to CEO profits; the ACA does.
Remember those Insurance Company refund checks -- thank the ACA.


By the way, it is very easy to pivot to a single-payer discussion from here:

Because thanks to the ACA, 80 cent$ of every dollar you pay to Insurance Companies, NOW has to go to actually Health Care.

Why isn't it closer to 100 cents on the dollar?
What is it again that Insurance Companies bring to the Health equation again?

... The ability to say NO?  While charging you for that "service."


What's their job again exactly ... doing no harm, to the sick and the needy, for a fee?

That's $ome $ervice!



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