Wednesday, May 2, 2012

Obamacare in action

Last month I received a letter from my health insurance company.  FYI, I pay for my own family's insurance…out of pocket.  I get no help from any of my (multiple) employers.  The letter essentially said, "we have found that your premium is too high.  We have recalculated and you will be paying less for the same benefit package."  Wow! That's great!  When I got the next bill my insurance premium was about $15 less…uh…yea?  "But don't look a gift horse in the mouth, Diva, $15 is $15 and it can be put toward something else…like one hour of daycare…a month."  Well, I'm not going to complain...too much.  

I just found out how this reduction came about.  I was saying to myself, "Self, what company really tells you that you're paying to much, and then reduces your bill…voluntarily? Either an out-of-business-in-a-minute company…or one that has been coerced."  And that is what happened.  For those of you who don't like the Affordable Healthcare Act, or Obamacare, as it's become more popularly known, the act REQUIRES insurance companies to do the following:

...insurers would have to spend at least 80 percent of what individuals and small businesses pay in premiums -- and 85 percent of what large employers pay -- to cover their policyholders' actual health care costs. If they don't meet those thresholds, they will have to issue rebates.
So my company didn't issue me a check, but lowered my premium.  They were making TOO MUCH MONEY, SO THEY HAD TO GIVE SOME BACK! Why did this happen you say? Wendell Potter further explains.

A study by the accounting firm PricewaterHouse Coopers a few years back revealed just how successful insurance firms have been in meeting Wall Street's demands. PwC found that the average MLR in the insurance industry fell from approximately 95 percent of spending being on medical care in 1993 to around 81 percent being spent on care 15 years later. (my emphasis) That translates into a difference of several billion dollars in favor of insurance company shareholders and executives and at the expense of health care providers and their patients.….I'll never forget when Aetna's stock price fell more than 20 percent on the day it admitted that its first quarter 2006 MLR had increased from 77.9 percent to 79.4 percent. Investors were so alarmed that they began selling shares of other insurers, too, believing that if the MLR was going up at Aetna, it was probably going up at its competitors as well.As I told Rockefeller and his fellow senators, insurers have engaged in a wide range of questionable practices in their constant quest to meet shareholders' MLR expectations, from shortchanging doctors and hospitals to dumping policyholders when they get sick.….It is because of Rockefeller's leadership on this issue that millions of Americans will see something in their mailboxes this summer they otherwise would never have seen -- a check from their insurers for overcharging them. Kaiser estimates that policyholders eligible for a rebate will get checks of about $127 on average. And as Rockefeller and Kaiser noted, many other Americans who won't get a check have benefited. That's because the MLR provision is serving as an incentive for insurers to seek lower premium increases than they otherwise would.
And so fiinally, I get a little something from the insurance company.  For those against Obamacare, perhaps this will get you to reconsider.

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