MLR Provisions Kick in Today
From Open Congress Nov 15, 2009 The Most Important Health Care Reform Provision You’ve Never Heard Of
For months, Bruce Webb has been tracking a provision in the House’s health care bills that has flown mostly under the radar. He calls it the “most important and most overlooked” aspect of the bills, and he may be right.
The provision in question is entitled “Ensuring Value and Lower Premiums.” In all of Congress’ health care bills it reads more or less like this:
“In General- Each health insurance issuer that offers health insurance coverage in the small or large group market shall provide that for any plan year in which the coverage has a medical loss ratio below a level specified by the Secretary (but not less than 85 percent), the issuer shall provide in a manner specified by the Secretary for rebates to enrollees of the amount by which the issuer’s medical loss ratio is less than the level so specified.”
In the end after much travail the Senate settled on a last minute 85/80 MLR between group and individual coverage, but the overall effect should be the same. And if anyone in the blogosphere beat me to this piece from July 28th, 2009 HR3200 Sec 116: Golden Bullet or Smoking Gun I’d like to hear it. With effective MLR regulation HCR works, without it it doesn’t. Which may explain why AHIP was broadly supportive of the bill until the MLR provision was restored at the last minute. And have been howling ever since.
This provision, if implemented correctly, almost totally strips the ability of insurance companies to combine cherry picking and premium increases to continue the huge profits they garner today. What it does is to establish a minimum ‘medical loss ratio’ which in simpler terms means a set ratio of care actually paid for to premiums collected. If by whatever means whether that be gaming the risk pool so an to only insure people unlikely to make claims or by denying coverage to insurees on a case by case basis your medical loss ratio drops below an established level the insurance company has to rebate the difference. In practice this prevents insurance companies from just arbitrarily jacking up rates and simultaneously takes the profit out of cherry-picking the risk pool. In a word this Sec automatically limits profits by establishing indirect price controls. Which is not going to make the insurance industry happy.
And no it didn’t. You read it here first. If you read it.
He (Bruce Webb) calls it the “most important and most overlooked” aspect of the bills, and he may be right.
If the health insurance industry was making excessive profits, Webb might be right. But since the health care industry is not, he is probably wrong.
You have to assume that these for-profit companies voluntarily waste money on SG&A to imagine that MLRs will have any effecrt on bringing down premiums. You also have to further assume that the MLRs are not just an accounting construct that is subject to “interpretation.” After all, what is “S G & A” and what is “direct expenditure on patient care.” If these unlikely assumptions turn out to be true, then Bruce Webb will be right.
sammy: “If the health insurance industry was making excessive profits, Webb might be right. But since the health care industry is not, he is probably wrong.”
Why do you say that they are not earning excessive profits? At first glance, there seems to be insufficient competition, no? And that means excessive profits, right?
Sammy insurance companies have been crying poor even as their MLRs (under their own accounting mind you) keep dropping. But Aetna at least revealed the reality in their October 2009 earnings conference call (reported in Dec)
http://www.huffingtonpost.com/2009/12/04/aetna-forcing-600000-plus_n_380130.html
“In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.
“The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering,” said chairman and CEO Ron Williams. “We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year.”
Fuck sick people, we got “results and margins” to target to keep shareholders happy.
And don’t bother providing those AHIP supplied profit margins. Unless you can show me the additional percentages going to executive compensation (which officially don’t show as profits) and numbers that subtract out the still sizable still officially non-profit (yet handsomely paid) portions of industry.
Medicare has typical total admin costs of 3%, exactly what value are private insurers adding even to justify the 80/85 formula? The money they spend screening out customers who might, horror of horrors, actually file claims?
Insurance companies make money by managing risk pools. Which may have a rational basis when it comes to car insurance, but is pretty fricking sociopathic when it comes to denying coverage to kids who bad a little bad luck picking their gene pool.
Insurance companies both as to life, health and fire traditionally had their origins as mutual companies, like just about everything else in American financial life things went to shit with Glass-Steagal that allowed the mergers of banks and insurance companies into pure profit centers rather than have the latter be primarily service delivery organizations. Or do you think this country really took a huge leap forward when the Rubinistas allowed Travellers to merge with CitiBank? From Wiki:
“The remaining provisions of the Glass-Steagall Act – enacted following the Great Depression – forbade banks to merge with insurance underwriters, and meant Citigroup had between two and five years to divest any prohibited assets. However, Weill stated at the time of the merger that they believed “that over that time the legislation will change…we have had enough discussions to believe this will not be a problem”.[2] Indeed, the passing of the Gramm-Leach-Bliley Act in November 1999 vindicated Reed and Weill’s views, opening the door to financial services conglomerates offering a mix of commercial banking, investment banking, insurance underwriting and brokerage”
Well THAT worked out well. Except for the bailout in the wake of near world-wide economic meltdown piece.
And though it might cause Sammy heart palpitations defining the proper lines between ‘medical loss’ and admin are being determined by what we fricking Marxists call ‘regulation’.
Plus you have to be a pretty sick industry to consciously call money spent delivering actual services to your customers LOSSES!
Read “REPEAL of Glass-Steagal”
We have officially entered a period of history when Wall Street traders, who traditionally represented themselves as just providers of liquidity, have redefined their mission explicitly as “We eat what we kill”. http://www.wallstreetoasis.com/forums/we-eat-what-we-kill
According to these sociopaths they are doing us a huge fucking favor by allowing us to cut their grass.
“The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it’s really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.
We aren’t dinosaurs. We are smarter and more vicious than that, and we are going to survive.”
Maybe these guys should figure out that is why we invented elephant guns and that the MOTUs are not the only ones with access to 2nd Amendment remedies. (Because Tea-baggers with all their agitation about TARP show no signs of actually going after the beneficiaries of it, nope lets pile on brown people who had the nerve to use a 33 year piece of legislation meant to end predatory red-lining).
Well it is my birthday today (1/1) and so I exercised my prerogative to be self-indulgent, even at the risk of dislocating my shoulder patting myself on the back.
And in my understanding the refunds don’t go based on risk or claims of the lowest cost insuree but instead to the whole pool. This is what removes the gaming factor, you have to have a certain amount of people who actually make claims to hit your MLR, ultimately stringent risk screening becomes counterproductive. After all if your entire risk pool is made up of the so-called ‘invincibles’, i.e. young healthy people who typically make few or no claims, you end up rebating the entire premium. No costs, no opportunity for profit, or exactly the opposite of the current practice. Under the 80/85 formula profits come from a combination of volume and administrative efficiency. More insurees equalling bigger pool of premiums, less dollars spent denying claims equalling a larger percentage of that 20/15 available for executive compensation/profits. Whereas the Aetna example shows that margins currently are achieved by limiting volume of both customers and service delivery, not exactly the Nordstrom’s model.
Bruce:
This may be; but, it is still base on a far lower basis than what it was previously. As I have said multiple times, healthcare reform is still a work in progress. And yes, selective insurance yields a more stable and potentially higher profitability margin. I am not so sure it is the whole pool; but, a flip of the coin would not be 50-50 on my thoughts . . . too progressive me thinks for my ideas. My thoughts were the invincibles would be the basis for other riskier insurance and 3 times there rate would be “our” rate (you have to look the ratio up – I forgot).
Its a good post and I was here to affirm your thoughts. My birthday is the 8th the same as Elvis, Mimieux(liked her in The Time Machine), Kolbe, Gilles, Longstreet, etc
Insureance is simply a form of the dreaded “Socialism” that has been privitized and monetized. While the corporations that sell this form of “Socilaism” are in the business of paying claims for illness, the corporations themselves are quite healthy — healthy enough to fund large contingents of lobbyists in every state capitol as well as the national capitol.
The whole presentation of trying to minimize the cost of health care is deceptive. With a population that has upwards of 40% of the population clinically obese and almost the same defined as overweight with a mere 20% at a healthy weight there is little chance of the USA containing costs any time soon.
That being said, there is little chance of any national policy on developing a healthierr population because that would be an intrusive “Nanny State” (not forgetting that the preponderance of obesity is to be found in the “Red States.”) it just isn’t going to happen. Therefore, we are not going to contain the root cause of the ever increasing costs of health care.
Reality says that preventative measures cost almost nothing compared to post sickness interventions. But we, as a nation, are not up to the task. Simply consider that the military has had to add pre-basic training fitness classes simply to get recruits able to pass the mimimum entry level standards. We have already ceded the health care battle to defeat.
Nor do I buy that military fitness argument. Back in the days of the draft and in the first years of the all voluntary military millions of out of shape kids entered the military, somehow the DI’s found ways to shape them up enough to fight Tojo and Hitler
Only one bill was signed into law. Do any AB readers other than Webb know the specific language in the new law regarding general provision? The language in the signed bill concerning this matter isn’t covered in this AB main post.
Webb’s contention that “With effective MLR regulation HCR works, without it it doesn’t” is an unproven claim. There have been a number of issues raised and challenged by members of Congress and the news media regarding the new healthcare law that go well beyond this one provision.
There is a good possibility that the new healthcare law will not survive further court challenges according to court and news media reports.
Only one bill was signed into law. Do any AB readers other than Webb know the specific language in the new law regarding that provision? The language in the signed bill concerning this matter isn’t covered in this AB main post.
Webb’s contention that “With effective MLR regulation HCR works, without it it doesn’t” is an unproven claim. There have been a number of issues raised and challenged by members of Congress and the news media regarding the new healthcare law that go well beyond this one provision.
There is a good possibility that the new healthcare law will not survive further court challenges according to court and news media reports.
About obesity, it helps to live in the South to understand its extent and impact. I was waiting to see my cardiologist once when another patient died right there in an office full of people. She weighed at least 400 pounds and was shorter than my 5feet 2inches. She was a very young woman and was accompanied by another young woman–probably her sister.
She was in distress as she tried to walk to the door to the exam rooms. She gasped for breath several times as she walked maybe 12 feet and then collapsed. I was sitting in an aisle seat right by where she was when she fell. Her left hip dislocated when she fell. All the nurses rushed to her to try to help her, but I think she was dead when she hit the floor.
It’s not unusual here to see whole families of people who are grossly overweight, from babies on up. Of course, it’s very common for people to be poor in the South. With poverty goes a diet that will make you obese even if you go hungry some of the time. A combination of processed food, fast food and Walmart Cereal will do it every time. It’s a Red State phenomenon in my experience. Wasn’t so common where I lived in California. But, poverty is a growth industry in the South and always has been. That’s the best argument I can think of to resist arguments for austerity. Poor people are not healthy in my experience. And, it’s extensive. NancyO
George:
So, your thoughts are to do nothing??? We will examine that in a moment. The root causes of increased healthcare costs are not obesity. Obesity is a phenomina of recent times and rising healthcare costs are beyond that of babyboomers and the obese which appear to be convenient scapegoats.
“a senescent citizenry is playing only a minor role in the ongoing climb in the nation’s health care bill—from $585 billion (the sum we laid out in 1990) to over $14 trillion (the amount we are projected to spend in 2030, assuming we continue in our profligate ways)” Uwe Reinhardt 2008 World Healthcare Conference, http://tcf.org/publications/pdfs/pb657/MaggieAgenda.pdf “Getting Better Value from Medicare.” Indeed, of the projected $14 trillion healthcare costs in 2030, $728 billion can be attributed to age and gender. So what are the cause(s) of rising healthcare cost?
Yes
George:
So, your thoughts are to do nothing??? We will examine that in a moment. The root causes of increased healthcare costs are not obesity. Obesity is a phenomina of recent times and rising healthcare costs are beyond that of babyboomers and the obese which appear to be convenient scapegoats.
“a senescent citizenry is playing only a minor role in the ongoing climb in the nation’s health care bill—from $585 billion (the sum we laid out in 1990) to over $14 trillion (the amount we are projected to spend in 2030, assuming we continue in our profligate ways)” Uwe Reinhardt 2008 World Healthcare Conference, http://tcf.org/publications/pdfs/pb657/MaggieAgenda.pdf “Getting Better Value from Medicare.” Indeed, of the projected $14 trillion healthcare costs in 2030, $728 billion can be attributed to age and gender. So what are the cause(s) of rising healthcare cost?
George:
Interesting comments by you. The obese are not the cause of today’s issues although they are certainly a concern. Neither are the elderly or the babyboomers an issue. Look to the Pharma, medical devices, specialists, and hospitals as they main contributors to todays issues. If we had bought into Hillary Care, the cost of it would have been less than 1/3rd of today’s costs. Briefly:
“a senescent citizenry is playing only a minor role in the ongoing climb in the nation’s health care bill—from $585 billion (the sum we laid out in 1990) to over $14 trillion (the amount we are projected to spend in 2030, assuming we continue in our profligate ways)” Uwe Reinhardt 2008 World Healthcare Conference, http://www.tcf.org/Publications/Healthcare/Maggie%20Agenda.pdf “Getting Better Value from Medicare.” Indeed, of the projected $14 trillion healthcare costs in 2030, $728 billion can be attributed to age and gender. So what are the cause(s) of rising healthcare cost?
“’The healthcare industry will continue developing new stuff for every age group,’ Reinhardt explains. ‘Will that ‘new stuff’—in the form of new drugs, devices, tests, and procedures—be worth it? Some of it will be and some of it will not.’”
The US has the only global healthcare program unregulated and managed for the highest return possible in profits. Innovation of products, medicines, and procedures having a low benefit and return as compared to cost has been the #1 culprit for rising healthcare cost. In a 2006 Health Affairs study, spending on new heart disease technology increased while survival rate remained flat. It appears to be the same for the “me-too” drugs which mimic older technology with little or no increase in results and having a higher cost and subsequent price. New and improved in medicine is not delivering what it being advertised to do. 1 of 3 healthcare dollars is spent on ineffective procedures, unnecessary hospitalizations, and over priced drugs and devices no better than the predecessors with little or no improvements in outcomes.
And if we did nothing?
1. In the worst-case scenario, the number of uninsured Americans […]
The problem with the “Repeal of Glass-Steagall as a proximate cause of the financial crisis” is that it was Bear and Lehman that were the first to go down and neither had meaningful (if at all) commercial banking operations and both had significant employee share ownership throughout the organization – thus even though they were publicly traded companies – still operated very much like the “idealized” private partnerships that many on the left feel is the favorable functional operating model for investment banks. Citi had long before and having nothing to do with the crisis, divested itself of its insurance operations. Core Bank of America was profitable in 2008, it was the Merrill acquisition, which they tried to back out of through the MAC clause, that generated their losses. And AIG’s issues it may turn out after it’s all said and done, were likely to have been caused by panic on behalf of the rating agencies who failed to understand that AIG’s balance sheet was set up and managed to be a “hold to maturity” rather than “available for sale”
Citi dumped all parts of Travellers’? I stand corrected in part per Wiki but it seems that Citi didn’t get out of the insurance business altogether:
“http://en.wikipedia.org/wiki/Citigroup”
The Travelers Property Casualty Corporation merged with The St. Paul Companies Inc. in 2004 forming The St. Paul Travelers Companies. Citigroup retained the life insurance and annuities underwriting business; however, it sold those businesses to MetLife in 2005. Citigroup still heavily sells all forms of insurance, but it no longer underwrites insurance.”
And though it doesn’t excuse my sloppiness, I was kind of using Glass-Steagel as short hand for the entire Rubinista deregulation agenda. it all seemed of a piece to me.
85/80 was in the final bill, in large part because Elmendorf nixed a 90 MLR on the grounds that it somehow equated to nationalization of the entire health system and he would score it as such (which would have added billions to gross cost, if not net of the bill), at which point they settled on 85/80.
The regulations themselves were released on Nov 22 and can be found here along with fact sheets, Maine’s appeal etc.
http://www.hhs.gov/ociio/regulations/medical_loss_ratio.html
Links aplenty! Maybe I should be in the Movies!
And in a little fact I had forgotten, States can apply for waivers to the 80% ratio for individual plans but I think are stuck with the 85% for group plans.
“The Affordable Care Act allows the Secretary to adjust the medical loss ratio (MLR) standard for a State if it is determined that meeting the 80 percent medical loss ratio standard may destabilize the individual market. In order to qualify for this adjustment, a State must demonstrate that requiring insurers in its individual market to meet the 80 percent MLR has a likelihood of destabilizing the individual market and could result in fewer choices for consumers. This HHS Bulletin describes the method and format States must use in order to apply for an MLR adjustment.”
And I would not discount it. But the ‘Bubba’ factor in the South is not particularly new, sometimes Cable gives you the impression nobody was ever fat before and that all is explained by McDonalds as opposed to say chittlins and deep fried everything (‘lardbutt’ or ‘lardass’ being a harsh but fairly apt description of the process involved).
And just kill me now:
“Webb’s contention that “With effective MLR regulation HCR works, without it it doesn’t” is an unproven claim.”
Uh since the rule just went into effect TODAY and it is a NATIONAL HOLIDAY clearly I was making a (hopefully well-reasoned) claim about the FUTURE working of this particular regulation, reasoning to be found in the original post to be opposed or tentatively accepted. Of course it is “unproven”. This kind of stick up the butt parsing of language accompanied by (barely deniable) ad homs is why a certain comment vanished early today. Not everything has to be an exercise in ‘King of the Mountain’. Particularly when the opponent has an eraser handy.
Actually de-mutualization was driven by greed on the part of executives pure and simple. They felt that a mutual company could not pay them the big bucks they thought they deserved in comparision with the hedge fund guys so they de-mutualized so they could get stock options. (The Prudential de-mutualization docs essentially said this between the lines, phrased as its the only way we can get good execs is to pay them a lot). Actually a mutual CEO has it good they almost never get ousted unless the company goes belly up, and no one can influence them. But they don’t get filthy rich so they decided filthy rich was more important and de-mutualized the comany.
Webb,
There are many other issues regarding the new healthcare law under challenge at the moment. There is no overriding evidence at this time that the new healthcare law will work effectively. The Administration is already handing out corporation waivers. So, any claim that the HCR works because one provision is in the law is more than questionable. It’s nonsense.
Your abuse behaviors as a blog moderator and general commenter violations of Dan’s comment policy are well known by many readers of his blog. Stop threatening and boasting like a little kid.
Contrived panic as influenced by Sachs
Ah, the sanity of it all. Good post, as well as good B & F. Quit cival from my view. With that being said, I wonder how many have been in the financial position of being poor, dirt poor, before they rose to the position of becoming comfortable, or descending from a comfortable position to being poor, then back up the ladder?
One thing I see is that the HMOs like KP can game the system since they own the both the biller and billee sides of the house.
In the past two years I have been in a lot of hotels. The newer ones have shower rods which bow outward for the larger members of society. The older hotels still have straight sower curtain rods.
In those trips I have been involved with final medical issues for two elderly relations.
One was hospice and one was dong everything available.
Nancy is correct about the trend in body mass of the US population.
MLR. I was worried until I read down the post.
In some blogs MLR is main line of resistance, as in the place your attack expects to meet the real deal of the enemy force resistence. As in Seigfried line.
Maybe 85% loss ratio is the insurance cabal’s MLR!
run –
as it turned out Goldman’s real-time marks were more accurate than anyone else’s. The contracts they had with AIG called for AIG to post collateral if AIG’s counterparty credit ratings were downgraded by the rating agencies. The rating agencies understood that AIG could not be forced to liquidate their CDS positions early and thus the economic loss on the CDS should have been the only consideration. Taking into AIG’s “marked” losses was the mistake/panic they were guilty of and they signalled to the market – in conjunction with the Lehman downgrade – that the rating agencies weren’t looking at the economics/contractual obligations of the companies. AIG was largely expected to raise significant capital in September, but Moody’s threat to Lehman – “find a strategic buyer or else we’re putting you into a ratings death spiral” was a read across to AIG.
Bruce – Aon and Marsh & McLennan are also “heavy sellers” of insurance, but are not insurance companies – they’re independent distributors of insurance products and as such have no balance sheet exposure. Citi’s position is essentially identical, and on top of that they also IPO’d Primerica – one of their insurance distributors – in 2010.
Bruce:
Don’t be so quick to acquiese to Jed. Weil and Citibank were given a time period of 3 years to divest itself of Travellers, something many other institutions/banks would not have achieved. After which they could apply for extensions. There was a very, very special relationship going on between Weill, Rubin, and Greenspan. Rubin became Weill’s right hand stroker after the deal was consolidated.
ilsm:
I guess I could have posted the exact wording from the act. I got tired. It is on page 204 of the 2400 pages. Actually 15% is all they can lose if they wish to stay in the business.
run,
Joe Cassano, the villain in charge of AIG FP testified in front of FCIC during the summer. During that testimony he was asked, incredulously, how he could maintain that AIG CDS were underwritten to a zero loss ratio target. His response was other than one CDS that BlackRock (who is managing the portfolio) unwound early, there have been essentially no losses to AIG’s “super senior” CDS because of the subornidation of the tranching below them. This point went completely unreported in the media and if I hadn’t been watching it live would’ve missed it myself.
If the rating agencies hadn’t downgraded AIG, they could have told Goldman to go pound sand when they demanded additional collateral.
Cut out your ‘Strutting Colonel’ attitude (as it was called by someone not me) and I’ll consider. You have been personally belittling to me since before I started blogging here. And I have cleared my moderation decisions in advance, they are only a violation in your own mind.
And my point stands. I gave an opinion expressed in future tense, not much different than many of your opinions about likely outcomes of Obama fiscal policies, and you went all grammar police on me. Of course future events aren’t proven.
Word to the wise: stop labelling me “little kid” and “paranoid” and maybe your comments won’t vanish. From the instant you appeared in the blogosphere years ago and blogs away you have asserted an authority on just about everything while dismissing everyone who hadn’t read every fricking thing you had (or claimed to) as someone who really shouldn’t even express an opinion. Not perhaps as openly as that but the passive-aggressive sub-text was always apparent.
Nobody appointed you judge of what a violation is, once again you just asserted authority you had never earned or been granted. You may add value on other posters comment threads, though I have never seen it much, but I recall one comment on my posts that actually did so.
Well IIRC premiums for each Exhange are equalized, you can only load up so much dollars on hospital administers before you start failing some of the minimum accceptable benefits standards.
But personally I am a lot less concerned about executive compensation than I am about how MLR limits risk pool gaming. At a minimum you hit your MLR by delivering SOMETHING that can be described as care, while simply denying care to whole categories of people makes that more difficult. No system will eliminate gaming totally, but the MLR does serve to realign incentive from limiting your exposure and denying care to providing something.
Well IIRC premiums for each Exhange are equalized, you can only load up so much dollars on hospital administers before you start failing some of the minimum accceptable benefits standards.
But personally I am a lot less concerned about executive compensation than I am about how MLR limits risk pool gaming. At a minimum you hit your MLR by delivering SOMETHING that can be described as care, while simply denying care to whole categories of people makes that more difficult. No system will eliminate gaming totally, but the MLR does serve to realign incentive from limiting your exposure and denying care to providing something.
Jed:
You have reached the beginning of the discussion. Why do you think AIG’s CDOs they were down graded? Goldman’s . . . call on collateral. In 2007, CDO such as AltiusII, Broderick, IschusII, Sherwood, Cambor3 were all rated triple A as sought by Goldman Sachs (by 2009 these CDO were Ba to Caa in rating).
Within thesee CDO were subprime bonds which were tranched within the CDO. As shown in the Adirondack 2005-2 CDO, ~90% of the CDO was AAA bonds and the balance was vastly different. Yet this CDO was received the AAA rating as sought by Goldmans.
The call on collateral didn’t start in 2008 when AIG needed rescuing. It started in 2007 and Goldmans was making that call for collateral on AIG on the very same bonds still triple AAA rated in 2007. Goldmans knowingly had constructed the CDO with subprime bonds. knowingly had sought and received a Triple A rating for each, started the run on AIG knoing full well the content of those CDO, and for all intents and purposes knew the US gov and the Fed (under Hank) would step in to rescue AIG (susposition but still a reasonable premise). These people were not stupid and neither was there the transparency in CDO/CDS transactions to trace the path these CDO/Cds took (thanks to the Greenspan, Summers, Levitt, Gramm, Geithner, Rubin, etc.)
Sure Moodys had a hand in this by even rating them; but, the smoking guy still is in the hand of Goldmans. If Geithner and the FED had some balls they would start to rein in these loose cannon and force them to decide what they want to be . . . investment firm or a bank? If they want to be a bank, there is a different structure of regs for them to follow whioch will restrict there activities. Main Street is still financing these assholes and the dollars spent on them by doing such has surpassed TARP’s pay back.
Glass-Stegall had nothing to do with insurance companies changing from mutuals to stock. You’re way off base here. And it didn’t have to do with executive compensation. Also Bruce can you show me the numbers about 3% administrative costs associated with Medicare. According to the actuaries at Milliman the number is closer to 9-12%. Also maybe you should expand on the waivers being granted. It would appear that these waivers are undermining the whole minimum MLR theory.
You’re a thug, Webb. Pure and simple.
As I stated in my original comment,
“Webb’s contention that “With effective MLR regulation HCR works, without it it doesn’t” is an unproven claim. There have been a number of issues raised and challenged by members of Congress and the news media regarding the new healthcare law that go well beyond this one provision.”
“There is a good possibility that the new healthcare law will not survive further court challenges according to court and news media reports.”
The news or the weekend was that the new healthcare law may be challenged provision by provision. No one should be surprised as the Republicans and the Federal courts attack the new law, whether in whole or by provision.
Webb’s abuse behaviors as a blog moderator and general commenter violations of Dan’s comment policy are well known by many readers of his blog.
Webb’s personal attacks continue on unabated by Dan. It appears that Dan’s comment policy doesn’t apply to all AB participants. Nothing could be more clear as evidenced by Webb’s usual conduct, thread after thread.
And look to all the people jumping to your defense and scorching my intolerant ass.
Same crickets as last time. And the time before that. Go figure
Who is ‘Milliman’?
The only equivalent claims I have seen are from people claiming that the entire administrative overhead of the government including courts and Congress should be allocated equally in proportion to share of overall spending. Now if some one can show Congress or GSA or the Federal Courts actually spend as much time attending to a Medicare program that is by design mostly on auto-pilot WHILE explaining why similar costs shouldn’t count against operations of private insurers (who after consume significant resources from courts and insuance commissions) well fine. And maybe this study is differnet. But it will take a little more unpacking than just a number and a one word reference as against reporting signed off by three cabinet officers.
The collateral posting by AIG had to do with *AIG’s counterparty credit ratings*. The credit ratings of the underlying CDOs wouldn’t have mattered if AIG wasn’t downgraded and threatened with further downgrade. AIG was first downgraded when Spitzer forced out Hank Greenberg and started taking negative marks on its CDS portfolio in the second-half of 2007.
Oh Christ it was the study I remembered. AHIC, a health insurance industry group hired an actuarial consultant Milliman to produce a study saying the differential wasn’t THAT bad. First they argue that since Medicare doesn’t pay commissions and is non-profit that its relative costs should be bumped up from 3% to 5%. Second they argue that since Medicare lays roughly twice as much in care per senior and disabled qualified enrollee than privates do on a risk screened basis that the latter should get rewarded for denying care by adjusting Medicare equivalent costs up to 9%, and THEN allocate all government overhead in proportion to Medicare’s share of total spending while assigning regulatory costs for privates to zero.
Gosh who knew private consultants paid by industry might deliver results favorable to their clients? Must be the first time in history.
And the only waiver under consideration per HHS is for Maine and only in regards to the Individual Market (the Group Market not being eligible fo waivers). The bill recognizes that Health Care delivery to sparsely inhabited states with a lot of self-employed farmers, hunters, and individual service proprietors (Safeway and Home Depot generally not opening stores in rural hamlets) might impose strains on the individual market that might make even a 80% ratio uneconomical even with the best intention of insurers/providers. But the suggestion that Maine’s as yet unapproved claim for a waiver based on its individual circumstances means everyone will be able to drive their exEmption through and so prove MLR inffective is to date nonsense
Webb,
You’re a cursing blowhard intent on driving participants from Dan’s blog. You play the thug role on many threads. Nothing new there.
You whine about any differences of opinion. You’re a typical leftist who does everything possible to kill off other voices of participation on someone else’s blog. This has been your pattern of abusive behavior on Dan’s blog for years.
The level of participation at Angry Bear continues to collapse. It’s not hard to see why between your abusive, immature conduct and a vastly declining level of participants who have any primary interest in major economic issues. Few serious economic interest individuals are keying in on AB at this point. And when they do participate they see the little league chest-beating games you play, including your voice killing threats.
Based on emails from economists and others that I have been receiving, Angry Bear isn’t considered a top economic blog at this point for reasons that are obvious both in the main posts and comment threads.
Oh yeah cabinet officers are totally unbiased.