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Americans to get $1.3 billion in health care rebates

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sactoking

Diamond Member
Sep 24, 2007
6,799
1,539
136
Prevention and treating people before they get really sick, really expensive to treat, and disabled for life. All of that cuts costs. It's not rocket surgery.
The problem is the MLR requirement again (coupled with the individual mandate). The individual mandate requires everyone to have insurance. That is a finite pool of customers which grows at a somewhat defined rate. Operating as intended, there is no big pool of uninsured customers to tap in to.

The MLR requirement caps non-medical expenditures at 20% of net direct written premium. Preventive care cuts costs, but it cuts medical expenditures. The resultant cut in medical expenditures triggers mandatory cuts in non-medical expenditures to ensure compliance with the MLR. The non-medical expenditures, like personnel and IT systems, are partially a factor of the number of people covered. With no untapped pool of uninsured (thanks to the individual mandate) insurers can't bring on new customers to supplement the non-medical revenue stream. That will result in job losses and worse service.

EX) Insurer A has $100,000,000 in premium and $80,000,000 in medical expenses. Non-medical expenses are $18,000,000 and profit is $2,000,000. The premium is $1,000/year per person (So 100,000 people are plan participants).

Insurer A institutes a wellness plan that saves 20% on medical costs. Medical expenses are now $64,000,000. The ACA works exactly as intended and the insurer refunds $20,000,000 in premium to maintain the 80% MLR. Each insured paid $800 after rebate. That leaves $16,000,000 for non-medical expenses and profit. Except non-medical expenses are $18,000,000. Many of those non-medical expenses can't be properly shunted. Then number of policyholders has remained constant and Insurer A needs just as many people to process claims, run the three accounting systems (GAAP, IRS, and SAP), etc. That means that the ACA again creates pressure to not lower the costs of claims.

What? There's inefficiencies in the non-medical expenses? Close those inefficiencies up. It'll just cost tens of thousands of jobs when the economy is trying to pull itself out of the toilet.
 

senseamp

Lifer
Feb 5, 2006
34,803
4,703
126
The problem is the MLR requirement again (coupled with the individual mandate). The individual mandate requires everyone to have insurance. That is a finite pool of customers which grows at a somewhat defined rate. Operating as intended, there is no big pool of uninsured customers to tap in to.

The MLR requirement caps non-medical expenditures at 20% of net direct written premium. Preventive care cuts costs, but it cuts medical expenditures. The resultant cut in medical expenditures triggers mandatory cuts in non-medical expenditures to ensure compliance with the MLR. The non-medical expenditures, like personnel and IT systems, are partially a factor of the number of people covered. With no untapped pool of uninsured (thanks to the individual mandate) insurers can't bring on new customers to supplement the non-medical revenue stream. That will result in job losses and worse service.
Fewer insurance workers to rescind coverage and find reasons to weasel out of paying. That's better service for customers, not worse.
EX) Insurer A has $100,000,000 in premium and $80,000,000 in medical expenses. Non-medical expenses are $18,000,000 and profit is $2,000,000. The premium is $1,000/year per person (So 100,000 people are plan participants).

Insurer A institutes a wellness plan that saves 20% on medical costs. Medical expenses are now $64,000,000. The ACA works exactly as intended and the insurer refunds $20,000,000 in premium to maintain the 80% MLR. Each insured paid $800 after rebate. That leaves $16,000,000 for non-medical expenses and profit. Except non-medical expenses are $18,000,000. Many of those non-medical expenses can't be properly shunted. Then number of policyholders has remained constant and Insurer A needs just as many people to process claims, run the three accounting systems (GAAP, IRS, and SAP), etc. That means that the ACA again creates pressure to not lower the costs of claims.
People with insurance are more likely to see doctor earlier and get preventative care, whether insurers like it or not. If you have insurance, you aren't going to wait till you are really sick to go to the ER, you are going to go see your primary care doctor and get it checked out.
What? There's inefficiencies in the non-medical expenses? Close those inefficiencies up. It'll just cost tens of thousands of jobs when the economy is trying to pull itself out of the toilet.
Let me find my tiny violin.
That money is coming straight out of pockets of employers, so firing those insurance company leeches who primarily spend their time trying to find reasons to weasel out of paying for sick people's care, is going to free up money for those employers to hire productive workers who do actual good for society, instead of taking a bonus for screwing people out of their coverage.
 

sactoking

Diamond Member
Sep 24, 2007
6,799
1,539
136
There's so much wrong with what you've just posted that it's not worth rebutting. You're wrong. I'm done.
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,880
4,212
126
If your cost is 2x your competitor for providing same service per person, you need to work on your costs, not serve fewer people.
Thats grand. Now your costs don't come down so the savings come from your budget.

That's the "solution", cut reimbursements without finding ways of dealing or even understanding the difficulties to begin with. When cost savings of 10 dollars require 10 or 20 times that to achieve and tie up providers, what sense does that make. Why do those who say they want reform but don't want to find how best to achieve it before implementation?
 

senseamp

Lifer
Feb 5, 2006
34,803
4,703
126
Thats grand. Now your costs don't come down so the savings come from your budget.

That's the "solution", cut reimbursements without finding ways of dealing or even understanding the difficulties to begin with. When cost savings of 10 dollars require 10 or 20 times that to achieve and tie up providers, what sense does that make. Why do those who say they want reform but don't want to find how best to achieve it before implementation?
Reimbursements are at 2x what other countries spend to get same results. There is no shortage of money in the health care system. So yes, cut reimbursements and let the system figure out how to live within a smaller budget.
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,880
4,212
126
Reimbursements are at 2x what other countries spend to get same results. There is no shortage of money in the health care system. So yes, cut reimbursements and let the system figure out how to live within a smaller budget.
That's fine. No one will pay to work. Do it yourself.
 

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