http://politics.gather.com/viewArticle.action?articleId=281474980855932
As of Dec. 2, health insurers are now required to put 80-85% of your premium towards your medical cost.
It's a nice wet dream for liberals to have such regulations...
But, for running a company, say x is the amount you take in as revenue, and y is the amount you pay out for medical costs.
government regulations say:
y / x >= 0.80
except, x & y are
unknowns at the start of each year. How do you do that as a business? How do you plan? You can make educated guesses at what *might* happen during the year, but no one knows with certainty what *will* happen.
The only thing the insurance company can do, is pad some buffer-room into the cost estimates, plan to deny a certain percentage of claims and adjust accordingly as the year progresses. And play around with who gets insured and who doesn't. It's not so much the fault of the company, rather it's just the reality of the regulation.
Say, for example, the last month comes and the numbers are teetering around the 80% mark, the insurance company may be forced to deny new applicants to keep their income less through the remainder of their fiscal year
to comply with government regulations.
I see this as similar to balanced budget legislation in congress - yes it is very important that government balances their budget but most of us can agree that mandating a balanced budget is a bad thing.