How to Protect Yourself From Obamacare

[Conan71]

Doak claimed the new 80 percent threshold could threaten smaller carriers and "disrupt the individual health insurance market in Oklahoma."

Sure didn't see that coming, did you Gas?

[guido911]

That should sew things up for United and BCBS.

Yep. So much for that ol' competition thing.

[Gaspar]

Sure didn't see that coming, did you Gas?

The libs are searching for toppings to be happy about on their pile, and small victories over free-market and competition have now become acceptable prom dates.

[nathanm]

Guido, are you interested in paying the DOI's copying fees? If so, I'll be happy to pore over the financials of Oklahoma's small insurance carriers and tell you where the money is going.

[Teatownclown]

The libs are searching for toppings to be happy about on their pile, and small victories over free-market and competition have now become acceptable prom dates.

Let it all out, Gassie. What do free-market and competition have to do with health care?

Sometimes, I think you're just providing oral service for the opposition. 

[Conan71]

Guido, are you interested in paying the DOI's copying fees? If so, I'll be happy to pore over the financials of Oklahoma's small insurance carriers and tell you where the money is going.

So you can misinterpret the stats and reach conflated conclusions? 

[Hoss]

So you can misinterpret the stats and reach conflated conclusions? 

He might qualify as a Fox News analyst then.  Maybe he should send them his resume.

[Gaspar]

Leave him alone.  If he thinks that government regulation leads to financial streamlining, then more power to him.

Obamacare has become a pet rabbet, leaving little pellets everywhere.

I must admit, that the bill has done some good by teaching us a valuable lesson.  I doubt we will ever allow congress to pass legislation without thorough analysis.  Hopefully, we will never "pass a bill to see what's in it" again.

[nathanm]

So you can misinterpret the stats and reach conflated conclusions?  

You're more than welcome to take your own look. I just don't have the 40 cents a page to have the documents emailed to me. If we weren't so backwards it would all be available online to begin with.

Gaspar, if you think requiring an insurance company spend a certain amount of the premium dollar on actual medical care is intrusive government regulation, having any kind of conversation with you is hopeless. Why do you even bother when you could be reading Atlas Shrugged again? It seems to be your bible.

[Conan71]

You're more than welcome to take your own look. I just don't have the 40 cents a page to have the documents emailed to me. If we weren't so backwards it would all be available online to begin with.

Gaspar, if you think requiring an insurance company spend a certain amount of the premium dollar on actual medical care is intrusive government regulation, having any kind of conversation with you is hopeless. Why do you even bother when you could be reading Atlas Shrugged again? It seems to be your bible.

I don't see where the government can set arbitrary spending percentages without causing harm to companies or causing premiums to rise even higher in order for companies to stay in business.  Mandating a 20% administrative cost and profit cap on health insurers seems like an overly lofty goal.  What happens if the companies don't comply?  Do they go out of business or pay heavy fines which make it even harder to attempt to hit a 20% cap?  Personally I see it as a way to back-door single-payer when the realization hits that insurers won't be able to hit the 80% health care expenditure limit.

Seems almost like telling my boss he needs to spend 50% of his revenues on payroll or 30% on new capital projects every year.

[nathanm]

Seems almost like telling my boss he needs to spend 50% of his revenues on payroll or 30% on new capital projects every year.

You're seriously arguing that an insurance company can't make it on cost + 20%?

Your boss isn't claiming to sell people a product that will pay for health care expenses and then refusing to use the money paid in for those expenses. Your boss also doesn't make a mint on holding people's money and using it to speculate on securities. Insurance has long been treated as a trust which is subject to strict regulation relative to other businesses.

[Conan71]

You're seriously arguing that an insurance company can't make it on cost + 20%?

Your boss isn't claiming to sell people a product that will pay for health care expenses and then refusing to use the money paid in for those expenses. Your boss also doesn't make a mint on holding people's money and using it to speculate on securities. Insurance has long been treated as a trust which is subject to strict regulation relative to other businesses.

Without question, there have been and are serious problems in the insurance industry and your characterization isn't far off the mark.  However, I honestly don't see how an insurer can cover overhead, COGS, and make any sort of a profit on 20% of total revenues, unless I'm missing something in the equation.  Do you know of any business which can do that?  I'll be curious to see if there is shrinkage in payrolls throughout the health insurance industry either by cutting heads, or pay rates.

[nathanm]

Without question, there have been and are serious problems in the insurance industry and your characterization isn't far off the mark.  However, I honestly don't see how an insurer can cover overhead, COGS, and make any sort of a profit on 20% of total revenues, unless I'm missing something in the equation.  Do you know of any business which can do that?  I'll be curious to see if there is shrinkage in payrolls throughout the health insurance industry either by cutting heads, or pay rates.

You're missing that COGS in insurance is almost entirely part of the 80%, not the 20% and that they can make extra money using the float. (there are companies with greater than 100% medical loss ratios that still post profits) What I don't know which is actually important for smaller insurers is how reinsurance costs are allocated.

[Conan71]

You're missing that COGS in insurance is almost entirely part of the 80%, not the 20% and that they can make extra money using the float. (there are companies with greater than 100% medical loss ratios that still post profits) What I don't know which is actually important for smaller insurers is how reinsurance costs are allocated.

Any idea what they typically are paying brokers for commission?  That's another and very important part of the COGS figure.

[nathanm]

Any idea what they typically are paying brokers for commission?  That's another and very important part of the COGS figure.

I've seen offhand remarks that the total is around a billion a year across all health insurers, but no hard figures.

Edited to add: For comparison purposes, the top 25 health insurers collected $650 billion in premiums in 2009.