Delaware’s MLR Facts

Filed in National by on June 21, 2012

Facts are so passe. The right wing noise machine is so effective nowadays that even Allan Loudell will probably have someone from the CRI on this afternoon to “balance” these findings.

Health care law saves Delaware consumers $1.8 million
Health care law provides rebates to 5,600 Delawareans

Today, Health and Human Services (HHS) Secretary Kathleen Sebelius announced that 5,600 Delaware residents will benefit from $1.8 million in rebates from insurance companies this summer, because of the Affordable Care Act’s 80/20 rule. These rebates will average $351 for the 5,300 Delaware families covered by a policy.

The health care law generally requires insurance companies to spend at least 80 percent of consumers’ premium dollars on medical care and quality improvement. Insurers can spend the remaining 20 percent on administrative costs, such as salaries, sales and advertising. Beginning this year, insurers must notify customers how much of their premiums have been spent on medical care and quality improvement.

Insurance companies that do not meet the 80/20 standard are required to provide their customers a rebate for the difference no later than August 1, 2012. The 80/20 rule is also known as the Medical Loss Ratio (MLR) standard.

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Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.

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  1. Obamacare Saves 5600 Delawareans A Total of $1.8 Million « kavips | June 21, 2012
  1. puck says:

    If anybody gets this rebate, please post the accompanying letter from the insurance company. I’d love to see how they play it.

  2. Will M says:

    Cool. Still doesn’t mean that we wouldn’t save even more money if we had more competition in the health insurance market.

  3. Geezer says:

    “Still doesn’t mean that we wouldn’t save even more money if we had more competition in the health insurance market.”

    You wouldn’t. Repeating misinformation doesn’t make it true. The only way for insurance companies to save money is to deny treatment. The only way to win the competition among such companies is to deny more treatment than your competitors.

    What part of this can’t you understand?

  4. jason330 says:

    You’d think that someone claiming to be qualified to run for elective office would be more discreet about their ignorance on this topic.

    I keep forgetting that on the Republican side ignorance is a virtue.

  5. Valentine says:

    Why is “the only way for insurance companies to save money is to deny treatment”? They could also save money by encouraging healthy lifestyles and preventive care (fewer and less expensive claims), cutting salaries and benefits for their workers (fewer expenses for company), and incentivizing health care providers to be deliver quality health care for less (lower reimbursements). And more competition could lead to lower rates on insurance.

  6. jason330 says:

    Not paying claims is the goal. There are a few ways to not pay claims. The two ways most favored by insurance companies are to not cover people who are likely to file claims and to simply not pay when claims are filed under some flimsy pretext.

    Because of this, until recently insurance companies were not even for profit businesses. They were “mutuals” or “beneficials” in which the policy holders were like shareholders.

    I can’t believe so many people simply don’t understand how insurance works.

  7. Geezer says:

    Valentine: OK, I should have said, “the only efficient way to save money.” Because none of those savings you cite comes close to the value of a single expensive procedure denied.

    The first option you cite was the idea behind early HMOs. Didn’t work. The second has already been put into place; people aren’t going to work for nothing. And the third will be far more effectively put in place when Medicare does it, because Medicare controls far more of the market and so has more weight to toss around. Why do you think the GOP outlawed exactly that in passing Medicare Part D?

    Jason: They not only fail to understand how insurance works, they fail to understand how just about anything work.

  8. Valentine says:

    Well, I am certainly not denying that insurance companies prefer to deny coverage — which is why I favor getting rid of insurance companies altogether, which would result in the biggest savings of all for consumers — but I am also not ready to totally give up hope that wellness programs and smarter delivery of services — which Medicare is moving towards — might have a positive impact.

  9. Delaware Libertarian says:

    Employment based medical care explains why insurance companies favor acute care above sensible preventative care and chronic condition management. Back in the 1950’s and 1960’s, many Americans worked for the same company for their entire lives or, at least, stayed with their employer for much longer than employees do now. Today, diminished loyalty exists between employees and employers, so employees are more like “free agents” today who switch jobs from one year to the next. If the employer knows the employee will likely jump jobs or the employer is likely to fire the employee, the employer will not buy into a insurance plan that covers care that provides diffuse benefits over a long period of time.

    Don’t forget: It’s the employer who decides the coverage. It tells the insurance company the plan of benefits they want covered. Recall the whole birth control/”abortifacient” debate.

    My suggestion: Divorce health insurance from employment. (Jason 330 said something along these lines recently and I agree with him). Health insurance should be portable from one job to the next, like life insurance or car insurance. So, get rid of the tax subsidy for employment based medical care. The main reason why we have employment based medical care to begin with is because of World War II price controls, anyway.

    Gary Johnson for President 2012.

  10. WilmingtonDEDem says:

    So many people don’t understand how insurance works because of who talks the most. The people out there explaining it through certain major media outlets are the ones who don’t have a clue. Other major media outlets provide the facts and give people the real story. Since those aren’t the sources most Americans use, they believe the junk. Go ask a number of Americans about the public option. The people out there talking have practically made that a four-letter word simply by not providing the proper details for folks to make their own decision about it. It’s a real shame people don’t do their own research.

  11. Paula says:

    @Puck — my BCBS premiums were lowered starting in the 3rd Q. The amount is 7%-8% of the premium (depending on if you use the higher or lower amount to do the math). But the letter does not mention the ACA — it references the deal with Highmark. Here’s what the letter says (I’m abbreviating slightly):

    Dear Valued Customer:
    BCBSD is dedicated to providing our members with quality, affordable health benefits. In connection with the successful approval and closing of our affiliation with Highmark Inc., BCBSD committed to invest more than $45 million, over the next ten years, to help control health insurance costs, improve the local health care infrastructure, and enhance the quality of life for Delawareans. Insurance Comm Karen Weldin Stewart made this commitment a Condition of her approval of our affiliation.

    Through this initiative, a total of $10 million over four years (2012-2015) has been allocated to provide a premium discount for individual subscribers and small groups. [bold]BCSD has discounted your montly premiums to reflect the 2012 premium subsidy.[/bold] This new premium amount is reflected in your July bill and will be in effect until your next renewal date.

    The reduction in premiums, along with other components of our investment inititatve, help reinforce our comtinued commitment to our members and the communities in which they live.

    . . . more information at . . .

    signed by Timothy J. Constantine, President

    Here’s the press release from last Nov.:
    I’d love to know about where BCBSD falls in the health care / admin costs ratio, but I can’t find that info online. No hits on the website for Medical Loss Ratio (MLR) standard.

  12. Idealist says:

    So Blue Cross Blue Shield sends out a campaign piece for KWS after she approved of its affiliation with Highmark. Typical.