Tag Archives: insurance

Affordable Care Act: Medical Loss Ratios

Today I received a “Notice of Medical Loss Ratio for your Health Plan”. As a required notice under the Affordable Care Act, it informed me that my plan met or exceeded the minimum required loss ratio of either 80 or 85%. (The minimum refers to the percent of premiums spent on “health care services and activities to improve health care quality”.)

My logical questions are as follows:

  1. What were the medical loss ratios across insurance plans in the 10-20 years before the Affordable Care Act?
  2. Why would an insurer pay more than the minimum medical loss ratio?
  3. For plans failing to meet the minimum ratios, how are insurers held accountable and what compensation would plan members receive?
  4. Assuming it is easier to fraudulently engage in “activities to improve health care quality” than it is to fraudulently provide “health care services”, why wouldn’t insurers try to increase the former and decrease the latter?
  5. In collecting the data, writing the software, producing the requisite paper products, printing the letter and delivering it to my address as required for “MLR Operations” to comply with the ACA, which jobs were counted as saved or created by the current political administration?

8/1/2012 Update: It appears that distribution of premium rebates (arising from #3 above) is dependent on employers, not the insurance companies themselves (who distribute the notices). This further increases costs of business administration, and

“…employers are allowed to hold onto the premium rebates and use them to offset premiums for workers for next year, or apply the money to a company fund aimed at promoting wellness, rather than sending out individual refunds.”

So imagine you are eligible for a rebate, but your employer decides to spend it on wellness initiatives for the next year. Then you leave your employer. Are you entitled to a pro-rated portion of your rebate? How will firms create new policies around how they manage rebates? Why does this law take the worst aspect about healthcare in America (linking to one particular legal/tax definition of employment) and make it more ingrained?

Source: WSJ: Employers Move to Adapt to Health Law (Aug 1, 2012)

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FDIC Bank Failure Data

The FDIC publishes a list of banks closed by the Office of Thrift Supervision for which it has acted as the conservator.

Since February of 2007, this includes 428 banks in 41 states with a mean of 2.06 bank failures per state per year subsequent.

The states with the highest number of failed banks are as follows:

  1. Georgia (47)
  2. Florida (60)
  3. Illinois (48)
  4. California (38)
  5. Minnesota (19)
  6. Washington (17)
  7. Missouri (12)
  8. Arizona (12)
  9. Michigan (12)
  10. Nevada (11)

The states with the highest value of bank assets at closure are as follows:

  1. Nevada ($315.9B)
  2. California ($105.7B)
  3. Florida ($36.3B)
  4. Illinois ($33.5B)
  5. Alabama ($31.0B)
  6. Puerto Rico ($20.4B)
  7. Texas ($19.2B)
  8. Ohio ($12.9B)
  9. Washington ($10.6B)
  10. Colorado ($8.2B)

The states with the highest shortfall of deposits relative to assets are as follows:

  1. Nevada ($120B)
  2. California ($30.7B)
  3. Alabama ($25.8B)
  4. Texas ($14.5B)
  5. Florida ($7.6B)
  6. Puerto Rico ($5.6B)
  7. Ohio ($4.1B)
  8. Illinois ($3.5B)
  9. Arkansas ($1.9B)
  10. Washington ($1.3B)

In the last two lists, Nevada and California together make up over half of the total assets/shortfall.

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Reich on Ryan's Medicare Proposals

In stark contrast to the current system that essentially maintains price ceilings which funnel private money to the pockets of politicians, pharmaceuticals and their lobbyists while limiting new products through the federal monopoly on drug approvals (FDA) — Mr. Reich apparently believes Mr. Ryan’s proposal to be the greater of two evils.

House Budget Chair Paul Ryan has already put forward proposals to turn Medicare into vouchers that funnel money to private insurance companies, turn Medicaid and Food Stamps into block grants that give states discretion to shift them to the non-poor, and give even more big tax cuts to the rich.

Huffington Post: Why the Right-Wing Bullies Will Hold The Nation Hostage Again and Again Apr 10, 2011

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Filed under Consumer, Economics, Politics, Rant