Overhead and Profit Control
Current Events vs. Founding Documents
Entry 123
Current Event
According to Insure.com; Jan. 18, 2011
Medical loss ratios will control health insurance company profits
Starting this year, health insurance companies must spend eighty to eighty-five cents on health care for every dollar they collect in premiums. Individual and small-group health plans are subject to the eighty percent rule, while large-group health plans must spend at least eighty-five percent on care. Health insurers that spend more will have to provide rebates to their customers.
The rule, known as the “medical loss ratio,” has been one of most hotly debated provisions of health care reform.
Under the Affordable Care Act, health insurance companies in the individual and small-group markets must spend at least eighty percent of premium dollars, and insurers in the large-group market must spend at least eighty-five percent of premium dollars on medical care and quality improvement. Insurance companies that don’t meet the spending requirement will have to pay rebates to customers starting in 2012.
The provision is designed to reduce health insurance rates by limiting how much insurers can spend on administration, such as marketing and executive salaries, and collect in profit.
VS
Executive Branch vs. Private companies and the Constitution
Founding Document
The US Constitution, Amendment 10
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
We the People:
Under what Constitutional authority does the federal government have to impose these controls upon a free market? None. Will you invest your IRA dollars in a health care insurer?
