Yesterday, Health Care for America Now (HCAN), called on the National Association Of Insurance Commissioners to resist the blatant lobbying by private insurers to weaken the rule-writing process for medical loss ratios (MLR). This was barely mentioned at all in the news, and disappeared with barely a beep. Here's the report from HCAN on how private insurers are trying to game the system:
"The insurance companies and their army of lobbyists are doing everything they can to undercut this law," said HCAN Executive Director Ethan Rome. "In order to feed their greed, they are pressuring regulators to change the very definition of what is ‘medical care’ so they can sidestep these important new requirements."
This is why the NAIC has resisted putting a firm deadline on coming out with their definition of the medical loss ratio. They say that work could drag on to September.
Did you know that nearly $1.9 billion would have been refunded back to consumers if the new health law was in effect in 2009?
Nearly $1.9 billion would have been refunded in 2009 by the six largest for-profit health insurance companies had the rules been in effect, according to an Oppenheimer & Co analysis cited in the report.
UnitedHealth (UNH.N) would have spent $867 million in refunds last year, the report said.
In a sign that the medical loss ratio is not improving for patients ahead of the implementation of the reforms, UnitedHealth announced this week that it spent 81.5 percent of premium revenue on medical care in the second quarter, a decrease from 83.6 percent a year earlier.
Senators such as Rockefeller and Franken have spoken out about the danger of private insurance companies in gaming the system by spending millions of dollars in lobbying to get the regulations written in the way they want:
Franken’s worry is that federal regulators, under intense lobbying from the insurance industry, may loosely define what an actual health-care cost is. Insurance companies, he continued, are looking for "loopholes" and ways to "game the system."
"The reason they don’t want stricter regulations is simply because so many companies have been making outrageous profits by gouging American families," Franken charged.
And here's Senator Rockefeller directly on this situation:
"It is clear that health insurance companies are sparing no expense to weaken this new law and the protection it promises to America’s consumers," Rockefeller said. "Health insurance companies and their allies have been furiously lobbying the NAIC to write the medical-loss ratio definitions in a way that will allow them to continue doing business as they did before the passage of health reform. The resources health insurance companies are throwing into their effort to weaken the medical-loss ratio appear almost limitless."
Health Care for America Now in their report, has sounded the alarm on the specific ways that private insurers are looking to weaken the MLR ratio in order to keep even more profits in their pockets by re-classifying administrative expenses as medical expenses.
Read the report from HCAN on this developing situation with insurers up to their same old tactics.
My advice to you guys is, don't forget that the devil is always in the details, and that even with the passage of the health law, private insurers will keep on looking for loopholes to exploit and to game the regulators as well. After all, with Liz Fowler, the former WellPoint executive who helped to kill the public option, in charge of the Office of Consumer Information and Oversight as Deputy Director, we need to be even more vigilant on how the regulators are reacting to the heavy lobbying from private insurers.