MLR is Stupid

Obamneycrap has decided to treat the health insurance industry as a regulated monopoly. There are inherent problems in that approach.

The federal government has no direct authority to regulate insurance. That duty was deferred to the state under the McCarran-Ferguson Act of 1945.

Perhaps the same folks that never bothered to read the Constitution, or the law they passed known not so affectionately as Obamacare, either never read McCarron-Ferguson or chose to ignore it.

The second problem, as if issue number one isn't enough, is insurance is marketed in a competitive environment. In spite of comments otherwise, most insurance products (and certainly health insurance) do not operate as a monopoly.

Which brings us to the MLR debate. The federal government has decided it is within their purview to dictate policy benefits, premiums, who must be covered, the conditions under which a policy must be issued and also have decided what is an appropriate payout formula for claims.

MLR requires carriers that write fully insured group health insurance plans to reserve no more than 15% of premiums for administration and overhead.

Carriers that write individual major med may use no more than 20% of premiums for administration and overhead.

In other words, the medical loss ratio for fully insured group health must be no less than 85% and for individual major medical, no less than 80%.

Sounds fine to some but there is a flaw, especially when you consider carriers operate in a free market. If their price is too high they will not write new business and may well lose existing business.

If it is too low they may find themselves losing money which usually means an over-correction the other way moving them to the non-competitive side of the fence.

Some of the Congress critters have pointed to areas where a carrier (usually Blue Cross) have captured 60% or more of the market. Their view is, the carrier is unfairly controlling the market and effectively eliminating competition.

OK, let's play along with that for a moment in light of MLR.

Say HHS decides to investigate the carrier and wants to audit their books to see if they are adhering to MLR. Upon doing so, they learn the carrier's MLR for fully insured group health is 75% instead of the mandated 85% figure.

Will HHS then tell the carrier to lower their rates to come into compliance with the 85% rule? If the carrier does so will not that make them even more competitive, leading to an even more market domination.

But what if the audit shows the carrier has an MLR of 90%? Will they make them raise their rates?

I doubt it.

Basically in addition to being stupid, MLR punishes the competition if a carrier tries to pull a fast one and retain more premium dollars for themselves but also punishes those who are efficient.

There is a word for that.

MVNHS©: If it's so darn good...

Why would one need this:

"Private Medical Insurance also known as PMI allows you to have complete reassurance of knowing that, should the need arise you and your family can receive medical treatment privately, without waiting for the NHS to treat you."

As we've pointed out innumerable times, the Much Vaunted National Health Service© is, by any rational metric, a failure: it doesn't provide anything like the level of care we enjoy (well, for now, but not for long), and it has failed completely at reining in the cost of health care. About the only thing it does do well is to kill off its patients.

So tell me again why we're seeking to emulate it?

This Sceptered Isle Part CCCII

Well, it says here that

"Tens of thousands of patients with terminal illnesses are being placed on a “death pathway”, almost double the number just two years ago, a study published today shows.

Health service guidance states that doctors should discuss with relations whether or not their loved one is placed on the scheme which allows medical staff to withdraw fluid and drugs in a patient’s final days. In many cases this is not happening, an audit has found. As many as 2,500 families were not told that their loved ones had been put on the so-called Liverpool Care Pathway, the study disclosed."

That can't possibly be true can it? Right off, the article admits that there is no such thing as "Death pathways". Whatever they are, they are officially called "Liverpool Care Pathways". See how different?

Remember that in the US such things don't and won't exist. The Fair Nancy Pelosi promised.

This whole report must be fictional balderdash.

DDN, Dunh! Transparency running scarce...

We've talked about health care pricing transparency from the very earliest days of the blog:

"The Illinois Department of Health will publish the average charges for as many as 30 common outpatient procedures ... According to a recent survey, 85% of Prairie State voters said that such information would “affect their decision” in health care matters, and 75% agreed that such disclosure would “create competition, lower prices and improve quality.”

So one supposes it's nice that my hometown newspaper finally gets around to noticing it, too:

"Even as consumers shoulder a greater share of the cost of surgeries and procedures, they often find it hard to come by the price data they need to make smart health care decisions upfront. Many have no idea what a procedure will cost them — and their health insurance company or the government — until the bills arrive in the mail."

Frankly, there's no real excuse for this: almost every company has some variation on the Navigator available to its insureds.

Of course, the rocket surgeons in DC are equally clueless:

“When we contacted hospitals and physicians to obtain price information for two common services (diabetes screening and knee replacement), we generally received only incomplete estimates,” the GAO said."

Really?

Yes, it would be grand if we could, in fact, implement the McDonald's Model. The problem is that most health care consumers are using (at least a few of) other people's dollars to pay for that care. The bottom line is that, until we pay directly, we need to rely on the tools we do have available. The good news, as mentioned previously, is that they are readily available from most carriers.

But that's apparently not good enough for the brain trust at the DDN:

"Neither the insurance companies nor the hospitals would give the newspaper that information ... [the DDN] obtained that data by finding Anthem Blue Cross and Blue Shield and UnitedHealthcare members who were willing to share information from their insurers’ respective price comparison databases."

The stupid is strong in this one:

"The payments vary widely."

No kidding.

But that wasn't really the point of the article, was it, Ben?

Wasn't the point that the information was unavailable before the care was provided? Yet you just shot that point in the foot, since it obviously is available to consumers who bother to look for it.

Words fail.

Another Ma$$Care Post

According to 24/7 Wall St, Bay State citizens now "enjoy" the highest state debt (per capita) of all 58. At an eye-popping $11,357 per, folks in Massachusetts have 17% more debt than runner-up Alaska (at a "mere" $9,505). Of course, Alaskans are only now having to deal with ObamneyCare©, while Bay Staters have suffered under its predecessor for years.

The good news is that, pretty soon, we'll all share in the joy of higher debt as ObamneyCare© continues to roll out (and over).

Even More Swedish Meatball-Medicine

Looks like Sweden's still more competent fielding a Bikini Team than providing health care. Proving they're not sexist when it comes to denying care - the last few outings included abandoning a little girl and an old woman - Swedish bureauweenies have decided that a man whose legs have both been amputated may not have a "permanent" disability.

Who knew they'd grow back?!

Evert Stefansson sure didn't but "the local health authority remained "uncertain if the impairment was permanent." And so his request for a powered wheelchair has been denied.

Good thing that won't happen here, right?

Student Health insurance still sucks...

A while back, Bob posted on why so-called "student health insurance" is such a bad deal. For one thing, it's over-priced, and offers limited coverage, especially if you end up ill at the end of the school year.

This is somewhat ameliorated by ObamneyCare©'s provision making it possible for "children" to stay on their parents plan until age 26.

But what if the plan itself has an internally self-contradictory mechanism that both offers coverage but then declines to pay out benefits under it?

Hunh?

Here's the issue:

"A group of Fordham University law students has organized an off-campus birth control clinic in response to the school's policy prohibiting the prescription of contraception at its campus health centers ... [Fordham's] policy states: "The Insurer is required by law to offer this coverage and pay the Covered Percentage of the Covered Charges for Contraceptive Drugs and Devices."

So what's the problem?

Well:

"[M]any students ... were turned away when they tried to obtain contraception or a prescription for it at campus health centers."

And therein lies the rub (so to speak):

If one must buy the student health insurance (as many - most? - universities require), and the policy at once states that there's coverage, but limits that coverage to University-sponsored facilities which explicitly deny coverage for a product or procedure, than one is essentially paying for something which can never actually be covered.

Now, I'm not necessarily supportive of Universities providing birth control items, and I'm definitely unhappy with a law requiring insurance coverage for lifestyle choices. But it is (apparently) the law, and it seems to me that Fordham is blatantly flouting it.