Tuesday, December 6, 2011

ObamaCare’s Hidden Time Bomb That Benefits Every Insured American


There are times that the title of legislation does not adequately describe the nature and purpose of a law that leads to confusion and uncertainty in the population. In March 2010, the Patient Protection and Affordable Care Act was signed into law and over this past weekend, one specific provision of the law went into effect and it epitomizes the meaning of the law irrespective of all the other benefits to Americans. All at once, the law’s detractors on the professional left and wary Americans will see immediate benefits that will change the nature of health care insurance for the better and it has the potential to push health care in America toward a single-payer, universal care system.

The provision that seemed to be buried in the extensive law, the medical loss ratio, requires health insurance companies to spend 80-85% of consumer’s premiums on real medical care and not overhead, profits, or marketing expenses. If insurers fail to meet the requirement, they are bound by the law to send rebate checks to consumers “representing the amount in which they underspend on actual medical care.” Now, before any conservative or naysayer claims the provision is not workable or true, California school teachers began receiving their rebate checks on Friday for premiums they paid that were not used for medical care. According to a report in Forbes, “This is the true ‘bomb’ contained in Obamacare and the one item that will have more impact on the future of how medical care is paid for in this country than anything we’ve seen in quite some time.”

On Friday, the Department of Health & Human Services issued new rules concerning what expenditures insurers can and cannot use to qualify as medical expenses. HHS has shown they intend to make sure insurance providers spend what they should to take care of consumers. One example of medical expenses HHS decided was not really a medical expense was commissions that health insurance brokers and salespeople earn for selling programs and policies to individuals or large groups. It is inappropriate to consider the cost of selling a policy as providing medical care that consumers pay for. In every other industry, sales is considered cost of overhead and HHS’s rules clearly delineate commissions and overhead from actual medical care consumers pay for and expect to receive.

Based on the signs that insurance companies’ parent companies are moving into other types of investments, it is obvious that private, for profit insurance providers realize they cannot compete against a single-payer system or spend 80-85% of their profits on actual medical care. The criticism from certain professional left pundits that President Obama wimped out on pushing for universal healthcare should finally admit they did not have a clue about the ACA or its potential for providing affordable healthcare to most Americans.

The ACA provides many protections to consumers such as no refusal of coverage for pre-existing conditions, no lifetime limits on coverage, parents keeping their children on the policy till age 26, and many other provisions that disallow insurance companies from refusing to cover illnesses consumers pay for. The medical loss ratio provision single-handedly gives consumers what they pay for; medical coverage and it defines the “affordable” in the Affordable Health Act. There are some Americans who are terrified of a single-payer, universal health care system, and for them, for profit health insurance providers will still exist if one can afford high premiums. But for tens-of-millions of Americans who cannot afford private coverage, a single-payer system will allow them to purchase affordable health care insurance for their families.

The outgoing official who was in charge of Medicare and Medicaid, Dr. Donald M. Berwick, made parting shots at the “extremely high level of waste” in the healthcare industry that is responsible for soaring costs of health insurance. Berwick gave a detailed list of reasons for the waste in the healthcare industry that causes needless spending and his comments are analyzed here by Sarah Jones of PoliticusUSA. The medical loss ratio will force insurance providers to streamline their practices and cost of doing business and if they will not, the consumer will get a rebate for the money they spent for healthcare that went to wasteful practices, profits, or administrative costs.

The medical loss ratio was opposed by the insurance lobby because it protected patients and ensured that they get the care they paid for. Streamlining health insurance coverage benefits patients, doctors, and everyone except for-profit health insurance companies and one begins to understand the fierce opposition to the health law regardless that it potentially gives insurance providers 30-40 million new customers. There are few fans of health insurance providers because before the ACA, there were myriad ways they could overcharge consumers and avoid providing care whether it was declining coverage for a pre-existing condition or exceeding hidden lifetime coverage limits. As full implementation of the ACA takes place, Americans who were ignorant of the law or those who are opposed because Republicans spread lies and misinformation about the law will begin seeing benefits they could never have imagined.

The key to success of the medical loss ratio is HHS and their intention to hold insurance providers accountable for providing medical care consumers paid for and not charging them for costs not related to real health care. On Friday, the first rebate checks went out to consumers who paid hard-earned dollars for health care that was used to profit insurance companies and either the insurance industry will change drastically to provide patients with the care they paid for, pay out rebates, or the population will migrate to a single-payer system as insurance companies flee to more profitable endeavors.

The healthcare insurance industry is seeing the end of being able to avoid paying benefits consumers pay for and if they will not spend at least 80-85% of their profits providing that healthcare, they will repay consumers. It is time for Americans to show some gratitude to the Obama Administration for giving them affordable health care and protecting patients from being cheated out of what they did pay for. The professional left that demonized President Obama for not pushing for a single-payer, universal healthcare system needs to reevaluate their position and apologize for being dolts. There is one thing for certain, the health insurance industry will run for the hills if they cannot make easy money for not providing health coverage and as the Forbes article articulated, “we are now on an inescapable path to a single-payer system for most Americans and thank goodness for it.” Yes, and also thank President Obama for doing the right thing; even if it meant putting a hidden, beneficial time bomb inside the Patient Protection and Affordable Care Act.

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