Wonder what was buried in the health care bill that no one responsible for it wanted you to see? Here it is. This little gem, the medical loss ratio, is intended to make health insurance companies obsolete. This is the provision that is intended to result in a single payor system. Here is how it works. Your insurance company must pay 80% of what it collects from you for medical care. Sounds like that’s to your advantage, no? Greedy insurance companies forced to relinquish some of their profits so you can get more health care, right? Government did this to protect you from your insurance company, right? Wrong. They did this so that all of the little insurance companies will go out of business right away and eventually all of the private insurance companies will, as well. The large insurance companies will be left to administer the national health plan in the same way that private insurance companies administer Medicare and Medicaid in a special brand of fascism.
Let’s say you have a high deductible plan. You have a $5,000 deductible and pay $250/month for premiums. You basically are paying for all of your health care out of your own pocket. You have chosen to pay for your care, rather than pay large premiums to an insurance company while maintaining a smaller deductible. So far so good. Enter the medical loss ratio. None of the money that you pay for healthcare yourself is taken into account for purposes of this calculation. Your insurance company would need to pay 80% of the $250 you send them every month on care for you in order to be in compliance with this new law. Guess what your insurance company will do? They will simply not offer this type of policy any more. No one will. Guess what you will have to do? You will have to buy a much more expensive policy (small deductible and giant premiums) or go uninsured totally. Initially, this is a pretty good deal for the insurance companies as they get to sell much more expensive policies and collect larger premiums.
The government will punish insurance companies that don’t comply by forcing rebate payments to patients such that these types of policies will no longer be offered and many of these companies will hang it up. That means there will be less competition in the health insurance marketplace. Guess what that means for the prices of the policies? As the prices go up, the demand for a national solution will skyrocket and presto! About 5 insurance companies (if you can still call them that) will administer “the plan” to the entire country. The country will be carved up into regions and each “company” will be awarded the spoils, colonies (former states)full of folks for whom it is illegal to not carry their “insurance” product.
Relieved of any competition, these “companies” will collect their premiums with the aid of Uncle Sam’s iron fist and be reluctant to pay for much if any care, as that is how profits are made in the “insurance” world. Insurance companies are kept in check from becoming too abusive on this account out of fear that the insureds will leave and go to a competitor. No more! Rationing will be the order of the day and there will be no where to turn.
Drug shortages will dwarf anything we saw this past year, as the “companies” will set prices below the profit margins to produce many drugs. Lines will form for basic and life-saving procedures, just as they have in Canada. People will have to pay completely out of pocket for their care if they want good care in reasonable time. A facility like ours that has transparent pricing will be life-saving for those looking for help. I doubt that our current facility will be large enough to accommodate all of the medical refugees.
“Medical loss ratio” will be known soon enough as a measure of mortality statistics in this country.
G. Keith Smith, M.D.
