A new direction for healthcare...
Keeping your health insurance costs down is one of our top priorities. Which is why we’ve been working both publicly and behind the scenes to make sure insurance companies adhere to the new national health care law that says they can’t spend more than 20 percent of your premium on their overhead, marketing or CEO salaries.
And with your help, we’ve been scoring some big victories!
Created to hold companies accountable for how they spend our money, the rule in the Affordable Care Act says if companies miss the mark, they must give customers rebates or lower premiums. The law required insurers to start meeting the new 20 percent standard on January 1, 2011. But to make sure the rule doesn’t leave us with fewer choices, Congress left room for states to gradually phase in the standard if the state can show it will cause too many companies to stop offering coverage to consumers who buy their own policies.
Naturally, some insurance companies pounced on that provision and lobbied state insurance departments to apply for delays, even when there was little to no evidence that the rule would cause insurers to leave the market. We fought back in those states with consumer voices and solid analyses.
In Florida, state officials tried to deny consumers an estimated $144 million in rebates or lower premiums over the next three years by delaying the effective date of the law until 2014. The state argued that the rule would make health insurers flee the market, rather than pay rebates. But consumers in that state have at least 20 insurance companies to choose from, and we argued that consumers don’t need an endless number of health insurance choices if they are of poor value.
Federal officials agreed, twice denying Florida’s unjustified attempt to put insurer profits ahead of consumers’ wallets.
In Texas, the state’s proposal to delay the rule would have meant the loss of an estimated $260 million in rebates to consumers. We argued that most residents are covered by companies that already meet the new requirement, and those that don’t are profitable enough to pay the rebates. Again, federal officials agreed and denied the state’s application.
And in North Carolina and Wisconsin, we’re fighting to keep residents’ rebates by urging federal officials to reject those state applications as well. We’ll be watching for those decisions during the next two months.
Seventeen states have asked for adjustments to the standard. So far, only six have been granted (Georgia, Iowa, Kentucky, Maine, Nevada, and New Hampshire). Nine states have been denied (Delaware, Indiana, Florida, Kansas, Louisiana, Michigan, North Dakota, Oklahoma, and Texas); and two are still under review (North Carolina and Wisconsin).
The state fights are just part of the battle. The industry continues to lobby Congress to weaken or undo the law. With your help, we’ll continue to fight every step of the way to make sure insurers are held accountable for how they spend our money – and if it’s a rip-off for consumers, that we get that money back!
Great job so far!!
I just got a 53% premium increase on my John Hancock Long Term Care Insurance policy. The “decent” premium I got a few years ago upon signing was increased; I’m sure, because the “group” rate was raised. I’m certain that the insurance companies well know that they can raise the group’s rate every few years because their insureds are older, and may have new medical conditions, so switching companies is not an option.
This is one more example of how “regulations” will “kill the marketplace & stop new jobs, blah blah” that is spewed from the mouth of well meaning politicians who just happen to have received nice $$$ from the industry.
Kudos! I am wondering — in other insurance fields (life, liability, flood, car, etc.), what is the comparable “loss ratio”?
My understanding is that as a business, most insurance makes its real profits on the float, or the interest the insurers make on loaning out the premiums they collect. So, for other forms of insurance, in general, insurers spend very little or none of the premium dollars on anything other than covering member claims.
Am I right about that?
If so, what’s wrong with health insurance that the insurers need a full 20% of my premium to cover admin, profit, etc.? It seems to me that 20% is quite generous to insurers, compared to other insurance. And therefore it’s even more outrageous to me that they are trying to collect even more than that!!!
I do not understand why ANY Health Insurance Companies should be able to be a “For Profit” industry. Premiums paid along with deductibles, coinsurance etc should cover any costs. We should not have Insurance companies making profits off of the misery of fellow human beings. Why are they allowed to pay huge Bonus’s to there head management at year for denial of claims? Why do we need to have so many policies to compare coverage to make the right choice with no surprises? 10 yrs ago our family paid through our employer $300 a year for coverage (not including Copays, deductibles, coinsurance), this year just the family coverage premiums for insurance through employer(in Network Provider) is over $7,000 a year (This does not include copays, coinsurance, deductibles, Out of Network Providers which could amount to over $20,000 (Max Out of Pocket) a year. My husband is disabled due to diabetes, I am the sole provider for my family which includes 2 underage daughters. I make under $40K a year salary. I may receive a 3% pay raise this year that does not even begin to cover the increase in Heath Care Costs. I really do not know what our family will do if we have a major Health Care issue. We are still paying off a 2011 Hospital bill.
What about California? What about medicare advantage plans (Blue Cross) and medicare gap plans?
My medicare advantage plan just raised (Anthem Blue Cross) just raised my copay for Physical Therapy
from $25 per visit to $50 per visit. The cost of the visits are $75 a piece. That means they doubled my copay in one year.
My consumer advocate hero, Ralph Nader, asks the rhetorical question: Why don’t health insurance companies do more to stop all the WASTE & FRAUD in medical billing? Why don’t they care?
“Health care bills come with hefty levels of fraud. From the historic study twenty years ago by the then General Accounting Office of the Congress to the present estimates by the nation’s leading expert in this field, Professor Malcolm Sparrow at Harvard University, fully ten percent of all health care expenditures are the result of computerized billing fraud and abuse. That will be $270 billion this year.” ~Ralph Nader, http://www.nader.org/index.php?/archives/2348-Follow-the-Bills.html
Thank you for your work for all of us.
the insurance premiums and welched benefits will help force me and my wife into bankruptcy, but it will get us into the hospital,(can’t get in without insurance, even if death will happen) because they do not find out that the insurance companies will cheat them and us out of benefits until after the medical help is already done.
thanks for putting a face on the health insurance crisis. So many people endure their suffering not knowing that other’s are suffering at the hands of an out of control health delivery system also. To spend around 17% of GDP on health care and not insure about 45 to 60 million people and then to know that over 20,000 people die each year because they cant get medical care because of all that is going on. A little less on wars, 60 million per copy jet fighters, aircraft carriers that are forced upon our military, spare engines that are required to be purchased when originaly buying the jet, and having a past president actually cut back VA benifits and care for our soldiers. We need to http://www.getthemoneyout.org It is embrassing to see how corrupt our country is.
Hi Howard,
The number of deaths annually here in the US for lack of medical care is close to 45,000 per report from Harvard a couple of years ago. Medicine is principally run as a business, and death is OK if the ratio of profit is improved. The medical providers are generally caught in a system that you must participate in (insurance company’s monopoly of care delivery). The profit motive is at odds with medicine’s principal edict-”Do no harm”.
Everyone needs real access to medical care-everyone. Like food and safe shelter, it is essential to human life.
Considering that Medicare can manage with 3% administrative cost, I find that the 20% allowance is outrageous. We don’t need advertising, hundreds of plans, dozens of insurance companies, and complicated billing which abets fraud. We need single payer Medicare for all, as Consumer Reports advised back in Sept. 1992. “Let them know that you support a health-care system that covers everyone, with quality care and with costs controlled effectively through a single payer.” Estimated savings today: at least $400 billion a year, more than enough to allow all to be covered at affordable rates geared to their income.