See addendum before proceeding....
I'm amazed that other than this diary, that I wrote a few days ago, I've not seen a thing about this in the media. In the previous diary, I focused on the recommended diary by Senator Al Franken, where he featured the implementation of medical loss ratios as a central part of the Senate Health Care reform bill that was about to be passed.
Requiring insurance companies to spend 85% of premiums on actual health services -- not administrative costs, TV ads, or gargantuan CEO bonuses -- is a big victory. Senator Rockefeller and I worked hard to get that provision included because it holds insurance companies accountable and will put an end to exploding premiums and obscene profits – a huge win for progressives.
It turns out that this provision, that he, and most Democratic Senators felt was important, rather than "put an end to exploding premiums and obscene profits" is to only last for three years, and then be eliminated from the law.
You can see the links and verification of this statement in my previous diary. Now, I can understand that when Franken wrote his diary here he thought that this provision was included in the actual bill that he voted for three days hence. So, perhaps he acted in good faith.
In checking to see whether there was any other reporting on this deletion of a central part of HCR in the Senate Bill, I found this summaryof it put out by the Senate Democratic Caucus, after the bill was passed.
Included in the summary under the heading, Cracking Down on Insurer Abuses and Creating Competition is the statement: "Strengthening medical loss ratios." Ignored is the reality that this would only last for three years, at which point it would be removed.
There is a good discussion on this subject, and many others in the area of Health Care Reform in this site, Kaiser Health News. One thing that is undisputed is that Health Insurers oppose such limits on Medical Loss Ratios.
There are three distinct ways of viewing this entire year long HCR effort.
One is that this is an effort to redistribute resources from the rich to the poor, an attempt to provide more care to those now deprived. This is the socialist meme promoted by the extreme right.
Another is that this is somewhat redistribution, but largely an attempt to restructure the entire health care industry to make it more efficient, more rational and more effective; and by doing so provide better care for all.
Then there is another more cynical viewpoint. It is best espoused by, of all sources, the venerable liberal publication Harpers Magazine. I described it in this diaryquoting from the article:
The real battle in Washington is seldom between conservatives and liberals or the right and the left or "red America" and "blue America." It is nearly always a more local contest, over which politicians will enjoy the privilege of representing the interests of the rich.
Eliminating this important provision that would have limited profits on Insurers gives more credence to this dark interpretation of what is happening. I have long concluded that this process will not "bend the cost curve" at all, but rather increase demand on a static provider base.
The only people who are intently examining every section, clause, word and comma of this bill are those interests.... Insurers, Pharmaceutical Companies, Hospital Corporations and Professional Organization who all have lobbyists pouring ever this bill. I can only assume that insurers exercised their veto, and the clause was curtailed.
The weekend blizzard has closed down Washington, but the Senate Office is still open. I spoke to one of Franken's staffers yesterday asking for his response to the discrepancy between his diary and the actual law. Did he feel betrayed, did he fight to preserve this clause, or was he even notified that it had changed? Of course there has been no response, and why should there be.
This is going unnoticed. The Democratic Caucus feels confident enough to ignore any reaction to the curtailing of what had been an important, if minimal, control over insurance costs. Why defend the indefensible, when it can be ignored and no one will even notice.
If the Insurance Industry has this much power now, imagine what it will be like if every citizen is required to buy their product, one with no limit on the proportion to be spent on actual medical care. We on this site focus on how not a single Republican will vote for this bill; as it stands now, after this last minute removal of a central element, I am amazed that not a single Democratic Senator would vote against it.
The accuracy of this diary, specifically that the Medical Expense Ratio, or maximum profit clause expires on Dec. 31, 2013 has been challenged as incorrect.
I based this diary on two sources, the text of the actual bill, and this linkwhich is from the web site of the Democratic Senate Caucus- page 2, sec 2718. Described as "Bill As Passed"
Sec. 2718. Bringing down the cost of health care coverage. Health insurance companies will be required to report publicly the percentage of total premium revenue that is expended on clinical services, and quality rather than administrative costs. Health insurance companies will be required to refund each enrollee by the amount by which premium revenue expended by the health insurer for non-claims costs exceeds 20 percent in the group market and 25 percent in the individual market. The requirement to provide a refund expires on December 31, 2013, but the requirement to report percentages continues.
Having had the time to trace down the managers amendment that overturned the clause that was in the original legislation,
it appears that my objection was corrected
, so much better for the bill; but such error in the official summary opens the question of whether such sloppy work by the Democratic Senate is to be found in other parts of the 2000 plus page legislation, leading to unintended consequences that will only be discovered far too late.
This was a diversion from consideration of the fundamental assumptions, many of them wrong, that underlay this bill. Six weeks after the bill was passed the web site that is dedicated to explaining it still contains a glaring error, one that must have been pointed out dozens of times. While this particular problem was corrected, the larger message is that this bill is of such complexity that even those charged with disseminating the meaning to the public have failed.
If those who wrote the bill can't make it clear what they have produced, how is there to be a legitimate discussion of it, and what confidence is there that this can be enforced. Ambiguity empowers those who have the most at stake, the insurers, providers and others who do not want the actual reform that would adversely affect them.
From this small sample, it looks like they will have a pretty easy job.